FEMA Defends $4 Billion Claim With PG&E as Fire Victims Cry Foul

The Federal Emergency Management Agency on Monday defended its push to collect $3.9 billion in claims from PG&E Corp. for the relief it provided after the utility’s power lines sparked devastating wildfires.

Wildfire victims have been fighting the payments to FEMA in court, saying the agency would be taking money from a $13.5 billion pot that PG&E had agreed to set aside for them. The U.S. agency has an obligation to seek recovery for the costs of critical services, such as medical expenses and home repairs, that it provided in the aftermath of the 2015, 2017 and 2018 blazes, Bob Fenton, a regional administrator for FEMA, said in a call with reporters.

“We have no interest in reducing the funds PG&E owes to survivors,” Fenton said. “We are interested in holding PG&E responsible for the billions of dollars taxpayers provided to assist individuals and communities impacted by wildfires for which they accepted responsibility.”

The dispute has pit the victims of catastrophic wildfires against the very agencies that helped rescue them from the wreckage. The same survivors are also fighting California’s emergency services office, which has filed $2.4 billion worth of claims against PG&E. The clash casts a shadow on the $13.5 billion settlement PG&E reached with victims, which won court approval just last month and brought the company one step closer to emerging from the biggest utility bankruptcy in U.S. history.

Fenton warned that, if PG&E doesn’t pay up, FEMA would seek reimbursement from some victims who wind up with “a duplication of benefits” — in other words, those who accepted assistance from the federal agency and also get paid out a settlement by PG&E. He estimated that amount would total less than $200 million.

Fenton said Monday that FEMA was left out of the talks between between PG&E and attorneys representing wildfire victims that resulted in their $13.5 billion settlement — despite the fact that any payment to FEMA would come out of the same pot of money.

“It really quite frankly boggles my mind why the tort claims lawyers would want to relieve PG&E of its claims responsibility and make California and FEMA the enemy here,” he said. “Obviously, a taxpayer shouldn’t have to pay for a corporation’s wrongdoing.”

Victims’ attorneys have meanwhile argued in court filings that there is no legal basis for FEMA’s claims, citing a federal law that would only require PG&E to pay the agency if it intentionally started the fires. PG&E has sided with the victims’ lawyers, saying the federal agency has no “valid legal claim.”