State blames PG&E for Butte Fire, seeks at least $90 million

Firefighters monitor flames while battling the Butte fire near San Andreas, California on September 12, 2015. According to state fire agency CAL FIRE, the fire has burned more than 65,000 acres and 86 homes. Firefighters monitor flames while battling the Butte fire near San Andreas, California on September 12, 2015. According to state fire agency CAL FIRE, the fire has burned more than 65,000 acres and 86 homes. Photo: JOSH EDELSON, Getty Images Photo: JOSH EDELSON, Getty Images Image 1 of / 62 Caption Close State blames PG&E for Butte Fire, seeks at least $90 million 1 / 62 Back to Gallery

California officials demanded more than $90 million from Pacific Gas and Electric Co. on Thursday after concluding that the company’s power lines caused a catastrophic fire in the Gold Country last year that killed two people and destroyed more than 900 structures.

The state is seeking to recover firefighting costs for the Butte Fire, which was traced to a pine tree that hit a PG&E power line on Sept. 9 in Amador County. An investigation by the Department of Forestry and Fire Protection found that PG&E and its tree-trimming contractors failed to maintain the tree.

If the amount sought is paid, it would be the largest award for wildfire damage against the utility on record.

“Under California law, utility companies are required to provide clearance between trees and their power lines,” said Daniel Berlant, a spokesman for the forestry agency also known as Cal Fire, which plans to send a demand letter to PG&E. “We do believe this tree should have been removed or maintained and so, as a result of that negligence, we are working to recover our costs to fight this fire.”

The blaze, the seventh-most destructive in California history, burned 70,868 acres in Amador and Calaveras counties, destroying or damaging 965 structures before it was contained three weeks later.

The Cal Fire report said PG&E contractors had removed two pine trees before the fire, exposing a gray pine in the same stand to sunlight. It apparently grew into the wire and sparked the fire.

County’s reaction

The state report prompted a strong reaction from Calaveras County officials, who said they would separately seek “hundreds of millions” of dollars from the utility. Total fire damage in the county was estimated at more than a $1 billion.

“We are shocked and dismayed by the extent of PG&E’s negligence and will actively seek justice for Calaveras County and its citizens,” said Supervisor Cliff Edson, the chairman of the board. “We will work tirelessly to secure rightful compensation for the county and our residents who are still grieving from the loss of loved ones, their livelihoods, homes, belongings and mementos.”

PG&E has said it spends $260 million a year to manage 50 million trees along its 134,000 miles of power lines.

The company said Thursday that it is “committed to doing the right thing for our customers,” but didn’t agree that the evidence proved negligence.

“Based on our preliminary review, we accept the report’s finding that a tree made contact with a power line,” the company said, “but we do not believe it is clear what caused the tree to fail or that vegetation management practices fell short.”

The fire broke out near Butte Mountain Road, just east of the town of Jackson. Nearly 5,000 firefighters responded to the blaze, using 18 helicopters, eight air tankers and 115 bulldozers, according to Cal Fire. About 550 homes were destroyed.

The state investigation report released Thursday said PG&E and its two contractors removed two pines in January 2015 that were near the one that contacted the power line, which “ultimately led to the failure.” Berlant said the remaining pine did not fall, but grew out of control, which the utility should have anticipated.

The tree erupted in flame after it touched the power conductor, causing embers to fall into dry, leafy fuels on the ground and touch off the conflagration, according to the investigation.

The tree-trimming contractors, ACRT Inc. of Akron, Ohio, and Trees Inc. of Houston, could not be reached for comment Thursday.

Both people who died in the fire lived in Mountain Ranch in Calaveras County. Mark McCloud, 67, and Owen Goldsmith, 82, a music teacher and composer, were killed after they stayed in their homes despite orders to evacuate.

PG&E already faces lawsuits filed by people who lost loved ones or property. In all, 500 families — including relatives of McCloud and Goldsmith — are seeking damages from the utility in Sacramento County Superior Court. Attorneys for the families said Cal Fire’s findings confirmed what they knew from their own investigations.

‘Devastating’

“This fire was absolutely devastating,” said John Fiske, whose firm is representing 20 people. “Some of them ended up becoming homeless because of this. Some of these homes were in families for generations.”

An attorney for Goldsmith’s two daughters, Mike Danko, said many homeowners in the area did not want to leave, despite warnings from officials to evacuate.

“When the fire came, he said, ‘Look, I’m 81 and I’m staying in this spot and I’m going to fight the fire,’” Danko said of Goldsmith. “And that’s what he did, and the fire won.”

Many residents relocated in the wake of the destruction, but those who returned were greeted by an unfamiliar landscape, Danko said. What was once a forested area had become a “war zone” filled with allergy-inducing dust, smoke and soot, he said, “and for those who want to sell what they have left, they can’t. The property isn’t worth anything.”

“Everything is gone,” said Stephanie Mathes, one of Goldsmith’s daughters. PG&E seems “to be a bit reckless in some of their processes, and people suffer.”

Attorneys for the plaintiffs said insurance companies pegged total insured loss from the fire at about $500 million.

Power lines have previously sparked a number of big California wildfires. In 2012, PG&E and two of its contractors agreed to pay $29.5 million to settle two federal lawsuits after the company's power lines sparked two wildfires in 2004 in national forests in California. The fires torched more than 4,000 acres in Trinity and El Dorado counties.

Peter Fimrite and Kimberly Veklerov are San Francisco Chronicle staff writers. Email: pfimrite@sfchronicle.com, kveklerov@sfchronicle.com Twitter: @pfimrite, @kveklerov