With few signs that the wildfires raging across Northern California will slow any time soon, state Sen. Jerry Hill, D-San Mateo, is hoping legislation he has proposed will prevent the costs of the damage they will cause from passing onto ratepayers.
Aimed at affirming the California Public Utilities Commission’s authority to weigh whether a utility acted reasonably before allowing it to cover its costs by raising rates, Hill’s Senate Bill 819 seeks to incentivize utilities to act responsibly and protect ratepayers from bearing the cost when they are negligent.
It also takes aim at Pacific Gas and Electric, which Hill said has been working with state legislators since January to shape proposed legislation that could change the set of regulations it faces and carve a path for the utility to pass its costs onto ratepayers.
As the state Legislature reconvenes in Sacramento from a summer recess this week, Hill is aware legislators will be focused on those bills that seek to address the role utilities will play in assuming responsibility for the destruction left in the wake of these fires. Those bills include his — which Hill is hoping will ensure the commission can continue to require utilities to provide reasonable service at rates it deems to be reasonable as dictated by the California Constitution — and three other bills he feels would let Pacific Gas & Electric off the hook for the damages it faces from the devastating wildfires that ravaged Northern California in recent years.
“I believe that the system works today and works quite successfully for everyone,” he said.
It’s not the first time Hill has taken on PG&E in a quest to hold the utility accountable. As the eighth anniversary of a 2010 gas pipeline tragedy that killed eight people in San Bruno draws nearer, Hill said he’s reminded of the beginning of his crusade, which started with news of the Sept. 9, 2010, explosion of a PG&E natural gas pipeline he initially thought was an accident.
After a month or two of investigations, Hill said it became clear the incident was not an accident, and was caused by the utility’s negligent actions, which included diverting funds from safety measures and directing them instead toward line items like executive compensation. Framed on Hill’s desk in Sacramento are the names of the eight who lost their lives that day.
“That’s the reminder that if they go unchecked, unmonitored and unregulated, it’ll happen again most assuredly,” he said.
Though Hill does not believe it should have taken the loss of eight lives to incite the utility to turn things around, he credited PG&E for responding to pressure from legislators and the commission and doing the right thing in creating a state-of-the-art gas system after the San Bruno explosion.
Electrical safety
Acknowledging the utility made strides on its gas program, Hill argues it failed to apply the same lessons to its delivery of electricity, noting dozens were killed in the North Bay fires last year and that of the 16 fires that have been investigated by Cal Fire, 11 involved PG&E equipment and may have been caused by the utility’s negligence.
Hill said the utility’s practices with regard to reclosers — devices that can recharge a wire with a fault in it to see if it can send power through and help avoid, in some cases, a power outage — have not demonstrated it has learned its lesson with regard to its electric utility. Because power sent to a downed wire during dry and hot conditions may start a fire, the utility could reduce the risk of fire by shutting off reclosers in wildfire conditions.
Though PG&E shut off only 38 reclosers during the October fires, Hill said the company improved its practices during December fires by shutting off some 4,000 devices, one step in several the utility is now taking that Hill said have come too late.
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“They will pay a price for that and they should,” he said.
Comprehensive reform
PG&E spokeswoman Lynsey Paulo said the utility is focused on working toward comprehensive reforms that can support victims who are piecing their lives together, ratepayers and continued investment in wildfire prevention, infrastructure and clean energy. Though Paulo said the company has not taken a position on Hill’s bill, she noted some of the state’s existing liability laws leave customers, communities and energy companies facing uninsurable risks even when they’ve followed compliance laws and threaten critical future investments in a safer and cleaner energy infrastructure.
Among the existing laws Paulo pegged as in need of reform is the application of inverse condemnation liability to events caused by a privately-owned utility’s equipment, which finds a utility may be liable for property damages and related costs associated with an event like a wildfire if its equipment is found to have been a substantial cause of the fire’s damage, even if the utility followed established inspection and safety rules.
The utility has maintained that allowing unlimited liability under inverse condemnation undermines the financial health of the state’s utilities, which negatively affects customers and the state as a whole, according to a Jan. 3 press release issued after Hill’s bill was introduced.
“Climate change is really leaving California increasingly vulnerable to wildfire,” she said. “Yesterday’s laws are not going to protect California from tomorrow’s devastating fires.”
Other considerations
Hill also takes issue with use of the inverse condemnation doctrine, alleging it assumes utilities can recover costs through the rates they set, based on the idea that the utility’s assets are public goods and should be spread among ratepayers, who are receiving their benefits. He agreed the benefits ratepayers derive from a utility’s assets should be considered, and is suggesting through his bill the Public Utilities Commission be given broader authority to assign a portion of a wildfire’s responsibility to a utility as it sees fit instead of having to weigh whether it is 100 percent responsible for a given set of damages.
Acknowledging the poles supporting PG&E’s power lines are shared by other utilities, such as telecommunications providers, Hill said the approach could allow the commission to include those factors in its decision-making process and assign a percentage of the responsibility to the utilities whose assets may have been involved. He said insurance companies and major utility users such as manufacturers have also spoken out against legislation that allows utilities to pass costs to ratepayers given the burdens they will have to assume if they remain in place.
Hill noted legislators have several factors to weigh — including PG&E’s profits, ability to pay for losses and the standard they want to set in the face of future disasters — in their final weeks in Sacramento before the legislative session ends. Having studied different ways to regulate utilities for the better part of eight years, Hill is hoping his fellow legislators consider the reality of what’s next if they go unchecked.
“I’m hoping that … the facts will speak to them as they have to me,” he said.
I think attention must be paid to the bipartisan bill for the removal of dangerous foliage that was vetoed by gov Brown. This bill directly addressed this problem. Where is the outrage for this???
I understood the effort to go after PG&E after the gas line explosion. However, this effort seems to be more of a PR stunt. Besides Mother Nature many could do more to prevent the damaging spread of these fires. PG&E power lines are not even involved for many of the fires yet they are the focus while very little is being done to prevent the damaging spread of fires. It is obvious the State and County governments need to pay much more attention to providing much bigger fire zones around communities and general fire breaks must be increased significantly. Even here on the Peninsula there are enormous fire risks and not enough is being done to lower those risks. In the past CalFire had the resources to clear fire breaks in the canyon areas (the canyon below Naughton in Belmont for example) but they lost those resources and now the underbrush just builds up. One day we will have a huge fire and there will nobody to blame except ourselves.
On behalf of a loved one who died in the October wildfires, I find it sad whenever someone tries to diminish efforts to curb PG&E’s lethal greed as a “PR stunt.” And, as it pertains to those October fires, your assertion that “PG&E power lines are not even involved for many of the fires” is flat-out wrong. Over 2/3rds of the reports for those fires not onlY identify PG&E equipment as the origin, they identify negligence in the form of failure to maintain equipment and/or vegetation in the area, as well questionable activation of a recloser on a downed line which ignited a fire. Over 2/3rds of the reports...in which findings have been forwarded to prosecutors for potential criminal charges.
This isn’t a one-off event. It isn’t just this and San Bruno. The history of PG&E literally includes HUNDREDS of examples where tragedy came as a result of their failure to properly maintain and operate their equipment. They have routinely, systematically favored stock price and executive bonuses over public safety. It would take a multi-part report to examine even a fraction of them. Mother Nature may be supplying more fuel, but it was PG&E playing with matches.
Nobody blames the gasoline for an arson.
That the state has been unforgivably slow in confronting the issue of fire safety, and developing a multi-tiered approach to mitigate the danger is undeniable. However, no aspect is receiving a full-court press this session, no aspect has millions of dollars in lobbying, as the effort to shield utilities from their negligence. They are couched in arguments using ill-defined terms like “reasonableness” and “substantial compliance.” If you want to see who is engaged in PR stunts, check out PG&E hiring Darius Anderson and Ace Smith. Check out the 7-figure donation they made to the firefighters association this year, and the millions spent in lobbying. The dead can’t afford that kind of money. And I believe when someone is working to keep those deaths from being relegated to a forgotten preamble to countless future deaths that will happen if PG&E is unshackled from liability, that is a lot more than a PR stunt. And it deserves our thanks.
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(3) comments
I think attention must be paid to the bipartisan bill for the removal of dangerous foliage that was vetoed by gov Brown. This bill directly addressed this problem. Where is the outrage for this???
I understood the effort to go after PG&E after the gas line explosion. However, this effort seems to be more of a PR stunt. Besides Mother Nature many could do more to prevent the damaging spread of these fires. PG&E power lines are not even involved for many of the fires yet they are the focus while very little is being done to prevent the damaging spread of fires. It is obvious the State and County governments need to pay much more attention to providing much bigger fire zones around communities and general fire breaks must be increased significantly. Even here on the Peninsula there are enormous fire risks and not enough is being done to lower those risks. In the past CalFire had the resources to clear fire breaks in the canyon areas (the canyon below Naughton in Belmont for example) but they lost those resources and now the underbrush just builds up. One day we will have a huge fire and there will nobody to blame except ourselves.
On behalf of a loved one who died in the October wildfires, I find it sad whenever someone tries to diminish efforts to curb PG&E’s lethal greed as a “PR stunt.” And, as it pertains to those October fires, your assertion that “PG&E power lines are not even involved for many of the fires” is flat-out wrong. Over 2/3rds of the reports for those fires not onlY identify PG&E equipment as the origin, they identify negligence in the form of failure to maintain equipment and/or vegetation in the area, as well questionable activation of a recloser on a downed line which ignited a fire. Over 2/3rds of the reports...in which findings have been forwarded to prosecutors for potential criminal charges.
This isn’t a one-off event. It isn’t just this and San Bruno. The history of PG&E literally includes HUNDREDS of examples where tragedy came as a result of their failure to properly maintain and operate their equipment. They have routinely, systematically favored stock price and executive bonuses over public safety. It would take a multi-part report to examine even a fraction of them. Mother Nature may be supplying more fuel, but it was PG&E playing with matches.
Nobody blames the gasoline for an arson.
That the state has been unforgivably slow in confronting the issue of fire safety, and developing a multi-tiered approach to mitigate the danger is undeniable. However, no aspect is receiving a full-court press this session, no aspect has millions of dollars in lobbying, as the effort to shield utilities from their negligence. They are couched in arguments using ill-defined terms like “reasonableness” and “substantial compliance.” If you want to see who is engaged in PR stunts, check out PG&E hiring Darius Anderson and Ace Smith. Check out the 7-figure donation they made to the firefighters association this year, and the millions spent in lobbying. The dead can’t afford that kind of money. And I believe when someone is working to keep those deaths from being relegated to a forgotten preamble to countless future deaths that will happen if PG&E is unshackled from liability, that is a lot more than a PR stunt. And it deserves our thanks.
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