California lawmakers move to implement Newsom’s utility wildfire plan

Three Assembly members have introduced legislative language that would enact Gov. Gavin Newsom’s plan to address the wildfire crisis enveloping California’s electric utilities, setting off a political scramble to act quickly on one of the state’s most urgent and complicated problems.

The proposal includes creating a special fund that would temporarily shield the utilities from fire liabilities that electricity providers are exposed to — a worsening problem that already drove Pacific Gas and Electric Co. into bankruptcy protection. PG&E would face a series of restrictions designed to encourage its speedy exit from bankruptcy in a way that does not overburden customers.

Lawmakers need to muster a two-thirds majority to pass the bill. And they are under pressure to move fast, because Southern California’s major investor-owned electric utilities face the threat of credit-rating downgrades if Sacramento does not move to ease their wildfire burdens by July 12 — just two weeks away.

While many lawmakers and their aides were working through the complexities of the new legislative language on Friday, signs of discontent among some key stakeholders have already emerged. Nine lawmakers from both political parties signed a statement faulting the proposal for neglecting to invest enough in wildfire prevention and preparedness, and an important consumer group criticized one of the bill’s major provisions.

The legislation appears to parallel the outline Newsom announced last week. It would create a fund for utilities, overseen by an administrator who would report to a new California Catastrophe Council consisting of several state government officials, including the governor or someone he designates.

Utilities would have to receive annual safety certifications in order to access the new financial resources.

Newsom envisions the fund working either as a line of credit or more like an insurance fund to which the electric companies would contribute billions of dollars. PG&E would not be eligible for any of the funding unless it exits bankruptcy protection and resolves its 2017 and 2018 wildfire claims without raising rates by June 30, 2020.

PG&E is reviewing the proposed legislation, company spokesman James Noonan said in an email, adding that the utility is committed to “fairly and expeditiously” resolving claims stemming from fires. He also cited PG&E’s work to reduce fire risk and keep rates “as low as possible.”

The bill would also establish a wildfire safety division within the California Public Utilities Commission, which regulates PG&E and the other investor-owned utilities.

Lawmakers are technically retooling an earlier piece of legislation, AB1054, because the deadline to introduce new bills has already passed. The bill is backed by Assemblyman Chris Holden, D-Pasadena; Assemblywoman Autumn Burke, D-Marina Del Rey (Los Angeles County), and Assemblyman Chad Mayes, R-Yucca Valley (San Bernardino County). Holden is chairman of his chamber’s utilities and energy committee.

State Sen. Bill Dodd, who carried major wildfire legislation last year, said he is broadly comfortable with the bill.

“The mechanics of this I support,” said Dodd, D-Napa. “There may be some specifics in it that we’re going to want to change, but I have not identified any at this time.”

But nine lawmakers — seven Democrats and two Republicans — released a statement saying that the proposal falls short on making crucial investments to prevent and prepare for wildfires. Supporters of the statement include Assemblyman Jim Wood, D-Santa Rosa, whose district was at the center of the October 2017 wildfires, and Assemblyman James Gallagher, R-Yuba City, who represents the fire-ravaged town of Paradise.

“This plan only focuses on the utility side of the equation, and that’s very important,” Wood said in his own statement. “We need to protect ratepayers, make sure victims of the 2017-18 fires are compensated and stabilize the utility market, but we cannot ignore the other side of the equation and that’s prevention and preparedness, which is not addressed.”

28The Utility Reform Network consumer group said is reviewing the legislative language. But Mark Toney, the group’s executive director, voiced discomfort with a provision that would assume a utility’s conduct is reasonable if it has a valid safety certification — unless someone in the regulatory proceeding for the utility to recover fire-related costs could prove otherwise.

“The people of California want PG&E and other utilities held responsible for the damage they cause, and want a stop to utility-caused wildfires,” Toney said in a statement. “Eliminating the requirement for utilities to prove they have complied with the highest standards for safety sends the wrong message to both the companies and the public.”

The reworked bill will first be considered in the state Senate, where a hearing could happen next week.

Separately, Newsom is proposing to create a new advisory board to help set standards that electric companies must follow to prevent wildfires. But the board could operate partially in secret.

The Wildfire Safety Advisory Board would make recommendations to officials at the state Public Utilities Commission. But their communications could be withheld from the public.

It would have to hold meetings in public but would not have to follow other provisions of the state’s open meetings law.

Newsom says the proposal is a work in progress and things could change. The bill still needs approval from the Legislature.

Jamie Court, president of the advocacy group Consumer Watchdog, says open meeting laws should apply to any deliberations about the public’s safety from fires started by utilities.