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California’s Wildfire Fix is No Fix?

Posted By Administration, Tuesday, June 11, 2019

Right after he took office, California Governor Gavin Newsom appointed a commission to study wildfire and to make recommendations on how to prevent them in the future. They held four hearings and took a lot of input from around the state.

Though the final product is due July 1st, the commissioners have given the governor a preliminary report. The main suggestion from the commission is to change the laws that make energy companies like PG&E responsible for all fires caused by their equipment.

It’s called inverse condemnation. To put it succinctly, the law says even though the energy company did everything possible, did everything right, and its equipment causes a fire through an act of god, the company is responsible for all losses.

Commission chairman Michael Kuhn said, “We are in a crisis. The current liability and governing system doesn’t equitably distribute costs.”

His — and the commission’s — recommendation going to go anywhere. The governor and leaders in California’s Legislature already have their mind made up on how to help utilities like PG&E deal with the problem. Doing away with inverse condemnation is not one of those ideas. They’ll leave that issue for other legislatures to solve.

A bridge fund will be established that power companies can use to offset the costs. The fund will be financed by utility customers and can only be accessed in those cases where the utility acted responsibly and fire happened anyway.

Commission member Michael Wara — an energy and climate expert from the Stanford Woods Institute for the Environment — doesn’t like the idea of the bridge fund. He said it “doesn’t address the underlying question around the solvency of utilities.”

Also serving on the commission is former California Insurance Commissioner Dave Jones, Carla Peterman, a former commissioner on the California Public Utilities Commission and former Assemblyman Pedro Nava.

Source links: Insurance Business America, Utility Dive

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