Photos of damage caused by the McBride Fire in 2022 included in a lawsuit filed against PNM and its vegetation management contractor. Some lawmakers say they are considering bills that could reduce liability for utilities accused of wildfires, saying such lawsuits could ultimately hurt ratepayers. (Photo from lawsuit documents)
A lawsuit against a New Mexico power company on behalf of hundreds of victims from a fire two years ago in Ruidoso is on its way to trial, and some state lawmakers are calling for a law preventing utilities — and their customers — from being on the hook for wildfires in increasingly fire-prone forests.
The McBride Fire in Ruidoso began in April 2022, destroying hundreds of structures and killing an elderly couple. It burned a few miles east of the South Fork Fire, another deadly fire that began in June this year and destroyed hundreds of homes.
Shortly after the fire, lawyers began suing PNM and its contractor, Trees, Inc., ultimately representing hundreds of plaintiffs. The lawsuit alleges that the McBride Fire’s cause was a pine tree that blew over onto a power line maintained by the utility. They say PNM and its contractor were negligent in allowing the tree to be tall enough and close enough to the power line to cause a fire on a windy day.
PNM denied any wrongdoing in a statement to Source New Mexico : “Public reports have noted a tree spanning approximately 50 feet tall that was outside of our right-of-way had contacted a powerline due to unanticipated wind gusts of over 90 miles per hour,” said spokesperson Eric Chavez. “PNM proactively employs vegetation management and wildfire mitigation practices that comply with applicable authorities.”
As part of its response to the lawsuit, PNM says it took adequate steps to prevent its property from starting a wildfire. It released a 91-page wildfire management plan that listed the Ruidoso region as one of the state’s 13 Hazardous Fire Areas, which the utility identified as high-risk and so targets for increased inspection, maintenance and other fire prevention efforts.
The utility’s tree management contractor has admitted in court filings that a “reportedly tall and healthy pine tree” outside of PNM’s right-of-way was blown over by high winds, “which resulted in a fire.” But they also deny any wrongdoing.
Jacob Payne, a New Mexico-based attorney for law firm Singleton Schreiber, held a town hall Wednesday evening for clients the firm is representing in the lawsuit. He said the lawsuit is scheduled for trial in February, and all indications are that the lawsuit won’t settle in the meantime.
The case is now in the middle of depositions and discovery. The lawsuit alleges that PNM and its contractors negligently allowed a “hazardously large” tree, especially given the ongoing drought, “historical propensity” for wildfires starting from vegetation falling into utility lines and the “extraordinarily high level” of fire danger in Ruidoso in April 2022.
“This is a very complex and multifaceted case,” Payne said in the virtual town hall to about 10 clients who attended. “We have numerous experts, from metallurgists who talk about the composition of the cables and what temperature the metal melts, to weather experts who will talk about the weather on the day in question, to vegetation management experts who will come in and say what utility companies should be doing.”
Clients seeking damages from PNM and its contractor include residents, AirBnB owners, the village of Ruidoso, insurance companies and others. Several law firms began advertising for clients soon after the fires were out, including Singleton Schreiber and Watts Guerra. Those law firms are also representing people harmed by the Hermits Peak-Calf Canyon Fire, the result of botched federal prescribed burns in northern New Mexico.
If the lawsuit goes to trial, a small number of “bellwether” clients will be heard in court first, Payne said. Those clients were chosen at random to provide a baseline. Any decisions by a jury for or against PNM will be considered afterward in mediation for everyone else, Payne said.
‘Electric costs are going to be so high we can’t afford it’
Payne’s client meeting occurred the same week that state lawmakers met near the South Fork Fire burn scar to discuss ongoing challenges from wildfire recovery and the potential downstream effects of future fires in New Mexico.
Sen. Pat Woods (R-Broadview) didn’t mention the McBride Fire by name, but he did say the state should find a way to limit liability for electric providers from wildfire lawsuits.
“We have to figure out a way to mitigate their liability, or the electric costs are going to be so high we can’t afford it,” he said. “Anytime an electric utility is sued, that is passed right in to the ratepayer and electricity cost goes up.”
Woods, in an interview after with Source NM, said he was not referring to the McBride Fire case in his comments, saying he wasn’t familiar with the ins and outs of the lawsuit. But he did say he intended to draft legislation for the upcoming legislative session that seeks to limit liability for utilities, including electrical co-ops, so long as they are shown to be maintaining clear rights-of-way and taking good-faith precautions to prevent wildfires.
Asked whether ratepayers would end up footing the bill of any judgment from the McBride Fire, Chavez, the PNM spokesperson, said the utility is “always concerned about impacts to our customers from extreme weather and natural disasters.”
“We appreciate the thoughtful discussion from our elected officials who want to mitigate impacts to New Mexicans. We welcome an opportunity to collaborate on this effort,” he said in a statement to Source NM .
At the LFC meeting, Rep. Joe Sanchez (D-Alcalde) asked whether the state could impose a cap on liability specifically for rural electrical co-ops. A lawsuit against the Jemez Mountains Electric Cooperative, where Sanchez used to work, ultimately had to pay $25 million for its role in the Las Conchas Fire in 2011, he said.
“Any lawsuit would put the co-ops in bankruptcy, and all that’s going to do is drive up costs for poor people in our rural areas,” he said.
Sanchez said the amount of risk co-ops face from wildfire lawsuits limits the amount of insurance they can get. After the Las Conchas Fire, the co-op can only get $2 million to $3 million in coverage, he said.
Payne, the lawyer suing PNM, said it was hard to evaluate the lawmakers’ proposals before they’ve been drafted or debated at the Legislature. But he said, generally, that large, private utilities should have to pay for the harm they cause.
“For-profit companies should be the ones that, when they harm people, fix that harm, and the victim should be made whole,” he said. “And so when you cap or limit what a for-profit company does, or shift that burden to consumers, as opposed to the shareholders who are part of that company, that’s a problem.”
Asked whether electrical co-ops should be shielded from wildfire liability, he declined to comment, apart from saying that co-ops are owned by and accountable to the communities they serve.
“There’s a difference there,” he said.
Sanchez said he wants to work on possible legislation in consultation with the state Office of the Superintendent of Insurance. A statewide task force is in the works to handle wildfire insurance-related issues, lawmakers said. He did not respond to a request for further comment Friday.
As long as utilities follow the rules, like keeping their electrical lines clear of trees, Woods said, they should not be held responsible for weather events.
“If they are following those rules, they should have some kind of protection against a line going down, if it’s actually a God-caused deal,” he said at the LFC meeting.
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