AP NEWS

California commission urges change in fire liability law

June 7, 2019

SACRAMENTO, Calif. (AP) — A California commission tasked with studying wildfire costs stressed Friday that lawmakers should rethink the legal standard that holds electric utilities financially responsible for blazes caused by their equipment even if they didn’t do anything wrong.

But legislative leaders continued to cast doubt on any proposal that could be seen as a bailout for Pacific Gas & Electric Corp., which filed for bankruptcy earlier this year as it faces billions of dollars in claims from victims. State investigators recently determined PG&E equipment sparked the blaze last year that nearly destroyed a Northern California town.

“It’s a vote that, politically, I’m sure a lot of our members sort of feel squeamish about,” said Assembly Speaker Anthony Rendon, a Democrat from Lakewood.

He said while some utilities, like San Diego Gas & Electric, have operated responsibly around wildfires, PG&E has not. The utility is under court oversight after a criminal conviction for a 2010 gas pipeline explosion that killed eight people. It has been blamed for some of the state’s deadliest and more destructive wildfires in recent years.

“To change the liability for the entire industry, which includes PG&E, which has done everything wrong over the past decade, is something that our members, for good reason, don’t feel good about,” Rendon said.

Members of the California Commission on Catastrophic Wildfire and Recovery argued, however, that the current system will cause more utilities to file for bankruptcy.

“Utility bankruptcies will revictimize people who have already suffered enormous loss,” said Dave Jones, a member of the commission and the former state insurance commissioner.

Lawmakers created the commission last year on the heels of a destructive 2017 wildfire season, tasking it with evaluating how the state can prevent wildfires and spread the costs of damage when they do happen.

Its members discussed their final report on Friday, which included other recommendations for lawmakers, such as changing insurance policies to encourage homeowners to better protect their property and creating a state board to oversee prevention efforts across the vast state.

The report also called for creating a fund that would compensate the victims of catastrophic wildfires, an idea the Legislature is already considering.

Still, some members said their proposals likely won’t go far in the state Capitol. Gov. Gavin Newsom, Rendon and Senate President Pro Tempore Toni Atkins quickly said they wouldn’t tackle the liability issue as soon as the group published a draft of its recommendations last month.

“These recommendations are going across the street into the blender,” said Pedro Nava, a commission member.

The bond rating agency Moody’s said earlier this week that creating a catastrophic wildfire fund would be a positive step for investors but was similarly skeptical about the prospects of changing how companies are held liable.

San Diego Gas & Electric and Southern California Edison had their bond ratings downgraded earlier this year amid wildfire threats. They have urged lawmakers to take action to give confidence to investors.

Newsom has said he wants lawmakers to act on proposals to shore up the state’s electric utilities before the Legislature adjourns for its summer recess July 12.

But he seemed to back off a hard deadline earlier this week.

“If it’s not July 12, it’s not July 12, but we have to do something quickly,” he told reporters.

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