California Governor Floats Plan to Reduce Utilities’ Wildfire Liability

By: - July 25, 2018 12:00 am

Fire crews battle an October wildfire in Santa Rosa, California. Pacific Gas & Electric has been sued some hundred times by victims of the wildfires that coursed through wine country last fall. Marcio Jose Sanchez/The Associated Press

California Gov. Jerry Brown, a Democrat, has proposed reducing utility companies’ legal responsibility for wildfire damage after their equipment sparks a fire.

The change likely would transfer some of the costs to homeowners and their insurance companies.

Investor-owned utilities have argued that current liability laws are unfair, because companies are held responsible for damages any time their equipment ignites a fire — even if the equipment was maintained properly — but they can’t pass on the costs to consumers automatically.

Pacific Gas & Electric and other investor-owned utilities have been lobbying California lawmakers for a change to liability laws in the wake of devastating wildfires last year that could leave them on the hook for billions of dollars in damages.

Brown sent his proposal to the co-chairs of a Senate and Assembly conference committee on wildfire preparedness and response. The panel was set to meet for the first time Wednesday.

The proposal shows that he’s sympathetic to utilities’ contention that climate change has made the current legal regime unworkable by dramatically increasing the potential costs of a wildfire.

“Now more than ever, Californians depend on reliable electrical power to heat and cool homes, run hospitals and fire stations and so much more,” Brown wrote to legislators. “Yet, the increasingly destructive and costly wildfires and natural disasters have the potential to undermine the system, leaving our energy sector in a state of weakness at a time when it should be making even greater investments in safety.”

Related: Brown’s proposed legislation (PDF)

Brown’s proposed legislation would change liability laws to require courts to consider whether utilities complied with safety regulations, as well as other factors, when holding them liable for damages. The proposal also would increase penalties for utilities that don’t follow safety rules and require them to adopt stronger wildfire prevention strategies, such as shutting off power at times of extreme weather.

In his letter, Brown said that the proposal wouldn’t change liability rules for the 2017 wildfires, but apply only to future fires.

In June, a state report determined that a dozen wildfires that burned in Northern California last year were caused by electric power lines and other utility equipment. Several of the fires investigated were among the most destructive in state history.

PG&E said it would review the governor’s plan and the conference committee’s work.

“As we have stated previously, we believe comprehensive public policy reforms are urgently needed to address the challenges brought about by more frequent and more intense wildfires,” the company said in a statement.

Critics blasted the proposal. Patrick McCallum, co-chairman of the coalition Up from the Ashes, which advocates for wildfire victims and the attorneys who represent them, called it a “non-starter.”

“It sacrifices the rights of property owners to protect the utilities from any responsibility for future damages they may cause, and removes any real incentives for them to take safety and fire prevention seriously,” McCallum said.

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Sophie Quinton

Sophie Quinton writes about fiscal and economic policy for Stateline. Previously, she wrote for National Journal.