Utility Wildfire Liability Bill Rises from the Ash

New life was breathed into legislation to reduce utilities’ wildfire liability Aug. 28 that seemingly had been left in the char last week.

SB 901 was declared all but dead and subsequent scheduled legislative conference committee hearings on the measure were cancelled. Then, the bill was overhauled behind closed doors.

Few committee members or stakeholders appeared to have seen the new language in the multi-page bill until just before the Tuesday evening hearing where it was approved on a 7-1 vote.

Assemblymember Brian Dahle (R-Redding) complained about the stark contrast between weeks of bipartisan effort to craft a viable measure and then being confronted last minute with a heavily-amended SB 901.

Now, SB 901 faces floor votes on Aug. 31 with no changes allowed, only up or down votes.

The controversial measure by Sen. Bill Dodd (D-Napa), which earlier had attempted to change the strict liability rules for utility equipment-sparked fires, now allows retroactive rate recovery for last year’s wildfires and excludes utility shareholder liability. Pacific Gas & Electric stands to be a big beneficiary after Cal-Fire charged that its power lines started many of the fires that scorched the Wine Country last fall, though the most destructive blaze, the Tubbs Fire, is still being investigated.

Under language in the previous legislation, the measure would have gone into effect at the beginning of this year. But that start date was removed mid-week.

Several lawmakers objected, largely because state reports on the cause of California’s largest fires last year have not been completed.

“We don’t know the extent of fault for 2017 fires, nor the total cost of payouts,” warned Assemblymember Eloise Gomez Reyes (D-San Bernardino).

“We will not engage in a bailout for mismanagement,” she insisted.

Sen. Hannah Beth Jackson (D-Santa Barbara) objected on grounds of needing “to send a signal to the market that we are going to hold companies accountable, while recognizing the need for electricity.”

Some lawmakers also protested putting ratepayers on the hook for utility liability. “Investors need to have skin in the game,” said Dahle.

Shareholders “should bear the brunt of costs” when the utility is liable for wildfires, added Assemblymember Chad Mayes (R-Rancho Mirage).

Some Democrats strongly concurred as did employee union representatives and large and small consumer advocates.

Assemblymember Jim Wood (D-Santa Rosa) not only called for incorporating shareholder liability into the bill, but also called SB 901’s funding for fire prevention, including dead tree removal and vegetation management, insufficient.

Dahle agreed, calling on fellow lawmakers “to put our money where our mouth is on forest management.”

Wood proposed a bill to provide $300 million for fire prevention, a figure based on the Legislative Analyst’s Office recommendation last April. But, it went nowhere.

Instead, SB 901 would provide only $200 million for fire reduction measures annually through fiscal year 2023-24.

The bill, which cannot be amended on either the Senate or Assembly floors, also calls for: Allowing utilities to finance, subject to CPUC approval, uninsured wildfire liabilities by issuing bonds and then paying them off with money collected from ratepayers; New requirements for both private and public utilities’ fire prevention plans; Adding provisions to the California Public Utilities Commission’s reasonableness review process to include factoring in the nature and severity of the conduct of investor-owned utilities, past and present, as well as the role of extreme weather; Streamlining landscape and forestry management; Extending some existing biomass contracts and revising emissions reporting requirements; and Requiring state conservation easements to include conditions for wildfire fuel reduction. Southern California Edison gave the latest iteration of SB 901 mixed reviews. In spite of “some constructive elements, further work is required to adequately reform policies on how the state addresses wildfire prevention, response and liability that are essential to protecting Californians in the future," said Pedro Pizarro, Edison International president. — Elizabeth McCarthy

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Utility Wildfire Liability Bill Rises from the Ash

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