PG&E wildfire settlement, tax deduction and Fire Victim Trust
- 85 people died. not independently verifiedThe company pleaded guilty to 84 counts of involuntary manslaughter.
After the 2018 Camp Fire, PG&E pleaded guilty to 84 counts of involuntary manslaughter, settled with the California regulator for about US$1.8 billion and funded a victims' trust about half in its own stock. California customers fund half of a state wildfire fund.
About half of the trust was PG&E stock. The trustee gave the lower value in an August 2021 interview.
Status As of October 2026: PG&E has pleaded guilty and settled; the Fire Victim Trust had paid 60% of approved claims in October 2023; no individual was prosecuted; the later payout rate and the tax effects of the trust's share sales are not verified.
- PG&E — Calculated a saving of about US$468 million from deducting its roughly US$1.8 billion regulatory settlement. KTVU
- PG&E — Rate base recorded at US$69 billion with a 10.28% allowed return in December 2025. Utility Dive
- Fire victims — Paid 60% of approved claims by October 2023; the trustee said victims would never be fully compensated. KQED
- Residents of Paradise and the surrounding area — The Camp Fire burned the town in November 2018; the death toll of 85 is unverified in the record.
- California electricity customers — Fund half of the AB 1054 wildfire fund (US$10.5 billion of US$21 billion) and half of the 2025 SB 254 addition.
What happened
The Camp Fire burned the town of Paradise in Butte County, California, in November 2018. Project records describe the cause as the failure of a hook on a PG&E transmission line close to 100 years old; replacement of the Caribou-Palermo line had been planned since 2013 and postponed. A death toll of 85 appears in the sources reviewed but was not verified against the cited sources.
In June 2020 PG&E pleaded guilty to 84 counts of involuntary manslaughter; its chief executive, Bill Johnson, entered a guilty plea on each count on the company's behalf. The maximum penalty was US$10,000 per count, and the penalty recorded was US$3,486,950 plus US$500,000. Butte County District Attorney Mike Ramsey said executives were not charged because, under California law, an executive is liable only if personally involved or personally aware; maintenance decisions had been taken in committees, which he said effectively removed individual responsibility. No individual was prosecuted.
A trust for fire victims was presented as a US$13.5 billion fund, about half of it PG&E stock. In an August 2021 interview its trustee, John Trotter, said the value was about US$10 billion and that victims would never be fully compensated. Management expenses were US$46.6 million in the first half of 2021, with about US$90 million a year projected, and more than US$93 million by October 2023. The trust paid 30% of approved claims at the start and 60% by October 2023.
On tax, a 2017 US law (Internal Revenue Code section 162(f)) bars deduction of payments to government unless the settlement identifies them as restitution, remediation or compliance. In January 2020 KTVU reported that PG&E described its roughly US$1.8 billion settlement with the California Public Utilities Commission for the 2017–2018 fires as technically not a penalty and calculated that deducting it would save about US$468 million. The same agreement committed PG&E not to pass the cost to customers.
California's wildfire fund under AB 1054 (2019) totalled US$21 billion, half funded by customers through a charge of US$2.50 a month for 15 years. A 2025 law, SB 254, added US$18 billion over 10 years, again half from customer bills. In December 2025 Utility Dive reported PG&E's rate base at US$69 billion with a 10.28% allowed return. PG&E's lines were also reported as the source of the 2021 Dixie fire.
- 2013Replacement of the Caribou-Palermo line planned; postponed
- 2018Camp Fire burns Paradise, Butte County (November)
- 2019AB 1054 creates the state wildfire fund (US$21 billion, half from customers)
- 2020Settlement with the California Public Utilities Commission (about US$1.8 billion) reported in January; PG&E pleads guilty to 84 counts of involuntary manslaughter in June
- 2021Fire Victim Trust trustee says value is about US$10 billion and victims will never be fully compensated (August); Dixie fire reported to start from PG&E lines
- 2023Trust has paid 60% of approved claims (October)
- 2025SB 254 adds US$18 billion to the wildfire fund, half from customers; Utility Dive reports a US$69 billion rate base (December)
What was said
“never”
Where accounts differ
Each party's account, side by side, with its source. The record does not settle these points; it shows them.
Described the roughly US$1.8 billion settlement as technically not a penalty and calculated a saving of about US$468 million from deducting it.
KTVUPayments to government are generally not deductible, but amounts identified in the settlement as restitution, remediation or compliance, and documented as spent, are.
The trust was presented as a US$13.5 billion fund, about half of it PG&E stock.
KQEDGave its value as about US$10 billion in August 2021 and said victims would never be fully compensated.
KQEDSaid the trust had paid only 60% of the approved claim and that the survivor worried about receiving the rest.
KRCRHow it looked
Shown
- The Fire Victim Trust was presented as a US$13.5 billion fund; about half was PG&E stock and the trustee put the value at about US$10 billion.As reported by KQED, August 2021 · KQED
- The roughly US$1.8 billion settlement with the California Public Utilities Commission was described by PG&E as technically not a penalty.PG&E, as reported by KTVU, January 2020 · KTVU
Recorded
- PG&E pleaded guilty in June 2020 to 84 counts of involuntary manslaughter (plus one fire count); penalty recorded as US$3,486,950 plus US$500,000, against a maximum of US$10,000 per count.
- In a 2005 review of 160 large settlements by four agencies, no agency negotiated the tax deduction; of 34 settlements with responding companies, companies deducted all or part of the payment in 20, more often when the payment was not labelled a penalty.
- PG&E calculated that deducting its roughly US$1.8 billion settlement with the California regulator would save about US$468 million.
- Trust management expenses: US$46.6 million in the first six months of 2021, with about US$90 million a year projected.
- Trust management expenses were more than US$93 million by October 2023; payout on approved claims was 60%.
- Payout on approved claims started at 30% (2021).
- Customers fund half of the AB 1054 wildfire fund (US$10.5 billion of US$21 billion) and half of the 2025 SB 254 addition (US$18 billion over 10 years).
Who gained
Reached nature or the ground
Gained elsewhere
Responses on record
- PG&E (2020-01): Described its roughly US$1.8 billion settlement with the California Public Utilities Commission as technically not a penalty and calculated that deducting it would save about US$468 million; the agreement also committed PG&E not to pass the cost to customers. · KTVU
- PG&E (2020-06): Pleaded guilty to 84 counts of involuntary manslaughter; its chief executive entered a guilty plea on each count on the company's behalf.
In court and with insurers
Lawsuits and rulings
- 2020-06Guilty plea$3986.95bn Penalty recorded as US$3,486,950 plus US$500,000Criminal case against PG&E over the Camp FireCalifornia criminal court, Butte County (prosecution by the district attorney) · Criminal · Butte County District Attorney → Pacific Gas and Electric Company (PG&E)
The company pleaded guilty to 84 counts of involuntary manslaughter and one fire count; its chief executive entered the plea on each count on the company's behalf. The district attorney said executives were not charged because committees had taken the maintenance decisions. No individual was prosecuted.
- 2020-01SettledUSD m 1.8bn About US$1.8 billionSettlement with the California Public Utilities Commission over the 2017–2018 firesCalifornia Public Utilities Commission · Regulatory · California Public Utilities Commission → Pacific Gas and Electric Company (PG&E)
PG&E described the settlement as technically not a penalty and calculated that deducting it from federal and state taxes would save about US$468 million. The agreement included a commitment not to pass the cost to customers. KTVU
- SettledUSD m 13.5bn Presented value of the trust; about half PG&E stock; trustee put the value at about US$10 billion in 2021PG&E bankruptcy and Fire Victim TrustUnited States bankruptcy court · Civil · Wildfire victims (via the Fire Victim Trust) → Pacific Gas and Electric Company (PG&E)
The trust was set up to pay fire victims. Its management expenses were US$46.6 million in the first half of 2021, and it had paid 60% of approved claims by October 2023. KQED
Insurers
What nature saw
Nature's report opens this page. Below: further outcomes measured on the ground.
What we don't know
Nature
- Not measured Harm to nature: The record holds no measurement of harm to nature.
Figures
- Insufficient Deaths: The company pleaded guilty to 84 counts of involuntary manslaughter.
Accounts
Record
- Insufficient Reported but not independently verified: the Fire Victim Trust was funded with US$5.4 billion in cash and US$4.54 billion in PG&E stock, its tax deduction was arranged to be used as the trust pays victims, and PG&E's 2023 annual report recorded a US$1.2 billion tax benefit from the trust's share sales. The relevant section of the annual report could not be read.
- Insufficient Reported but not independently verified: the payout rate rose to 66% in April 2024 and all 477 million trust shares were sold. The source page returned an access error.
- Insufficient Reported but not independently verified: a US$117 million settlement of the suit against PG&E directors and officers (29 September 2022); the source of the money was not verified.
- Insufficient The death toll of 85 is reported but not independently verified in the sources reviewed.
- Disputed the sources reviewed conflict on executive bonuses: one passage records a bankruptcy judge rejecting a later bonus plan, another lists the outcome of PG&E's bonus request as not found.
- Unclear Whether PG&E has used the tax deduction on the trust and settlement payments in practice could not be confirmed from the sources read.
Did the harm stop?
The record states that the 2021 Dixie fire was also reported to have started from PG&E lines. It does not describe any limit set before the Camp Fire.
Who paid?
According to the record: fire victims received 60% of approved claims by October 2023; customers fund half of the state wildfire fund (US$10.5 billion of US$21 billion under AB 1054; half of the US$18 billion added in 2025); about half of the victims' trust was paid in PG&E stock.
Sources
Government and regulators
- GAO-05-747 (15 September 2005)U.S. Government Accountability Office · 2005-09-15
Press and investigations
- PG&E could receive tax break for settling with wildfire victimsKTVU · 2020-01-10
- Fears over Fire Victim Trust fundsKRCR · 2023-10-24
- Utility Dive report on the California Public Utilities Commission, return on equity and wildfiresUtility Dive · 2025-12-18
Connected cases
- Alter do Chão and Dia do Fogo fire allegations Brazil · 2019–2024 Related matter
- Ikarian Reefer fire (Sierra Leone) Sierra Leone · 1985–1995 Related matter
- US tax deductibility of environmental settlements (IRC 162(f)) United States · 2017
- Pacific Gas and Electric (PG&E) (Company) — here: Utility; defendant in the criminal case; settled with the regulator; funded the Fire Victim Trust; there: Company that calculated a deduction on its CPUC settlement
- US Government Accountability Office (GAO) (Public authority) — here: Reviewer of tax treatment of settlements (2005); there: Auditor of the settlement sample (GAO-05-747)
- Asbestos 524(g) bankruptcy trusts and J&J talc two-step United States · 1988
- US Government Accountability Office (GAO) (Public authority) — here: Reviewer of tax treatment of settlements (2005); there: Source of the 2011 asbestos trust data
- Fieldwood bankruptcy and US offshore decommissioning United States · 2024
- US Government Accountability Office (GAO) (Public authority) — here: Reviewer of tax treatment of settlements (2005); there: Auditor; estimated liabilities
- Peabody, Patriot Coal and coal self-bonding United States · 2007–2020
- US Government Accountability Office (GAO) (Public authority) — here: Reviewer of tax treatment of settlements (2005); there: US government auditor that recommended ending self-bonding
- US Defense Department PFAS costs top USD 9.3 billion at 718 installations United States · 2022–2025
- US Government Accountability Office (GAO) (Public authority) — here: Reviewer of tax treatment of settlements (2005); there: Published the PFAS cost report