Brown backs liability changes for California utilities
By JONATHAN J. COOPER
Jul. 25, 2018
SACRAMENTO, Calif. (AP) — California Gov. Jerry Brown on Tuesday backed softening the standard that makes electric utilities financially liable when their equipment causes wildfires as the state faces more severe blazes in the midst of climate change.
Brown sent lawmakers draft legislation that would allow judges to decide how much utilities should pay, backing away from a legal standard that generally holds them entirely liable for the costs of wildfires triggered by their power lines, transformers or other infrastructure.
It would apply to fires sparked after Jan. 1, 2018. Pacific Gas & Electric Co. executives have said they expect to pay more than $2.5 billion after the company's equipment was blamed for starting several of the 2017 wildfires that killed dozens of people in Northern California's wine country and triggered billions of dollars in insurance claims.
Investigators have not released their findings for a fire that destroyed several neighborhoods in Santa Rosa.
"If we do not take action today to prepare for and anticipate the extreme weather events of tomorrow, we will all pay dearly for it," Brown wrote in a letter to lawmakers.
California's legal standard is among the strictest in the nation for assigning costs to utilities. The companies are on the hook to pay for wildfire response and recovery if their equipment started a fire, even if they aren't found negligent.
Brown's proposal would instead allow judges to make a liability decision weighing factors including the utility's "proportionate fault" and whether the company complied with safety regulations.
Brown sent his proposal to lawmakers a day before a legislative conference committee holds its first meeting to discuss wildfire prevention and liability issues.
Utilities say they're facing unprecedented costs as California confronts a longer, more severe fire season due in part to drought and climate change.
PG&E spokeswoman Lynsey Paulo said the company is reviewing the governor's proposal.
"We believe comprehensive public policy reforms are urgently needed to address the challenges brought about by more frequent and more intense wildfires," she said in a statement.
Critics, including insurers and local governments, say changing the liability mechanism would raise insurance premiums and remove incentives for utilities to do everything they can to prevent fires.
A coalition of insurers called Brown's proposal a bailout for utilities.
"Protecting utilities' shareholders over fire survivors leaves the very individuals and communities whose lives were upended on the hook to the benefit of huge utility companies," the coalition said in a statement.
In addition to the wildfire changes, Brown's proposal would increase the maximum fine utilities can face if they do violate state law or rules from $50,000 to $100,000 per offense. It would also require utilities to development more robust wildfire plans and better state oversight of those plans.
It also would require equipment inspections, maintenance and temporary power shut-offs during extreme weather.