Electric utilities would pay into fire fund
GOP state lawmaker says plan will reduce the hit on ratepayers from future blazes.
SACRAMENTO — With negotiations intensifying over how California’s electric utilities should help pay to fight wildfires, a prominent Republican lawmaker says the companies should contribute to a new multibilliondollar fund that would help mitigate those expenses.
The proposal by Assemblyman Chad Mayes (RYucca Valley) would create the California Wildfire Insurance Fund, a pool of money collected from utility companies that could be used to cover some of the “extraordinary costs arising from wildfires,” according to the draft legislation.
The plan would help utilities that act prudently, while reducing the financial hit from future fires on utility ratepayers, Mayes said.
“This fund ensures victims of wildfires can quickly rebuild their lives, and utility investors have to help pay for that,” he said.
The proposal would create a state-governed entity to oversee the money contributed by investor-owned and municipal utilities. Exact contribution amounts are not outlined in the draft legislation and will be the subject of negotiations before the Legislature adjourns for the year at the end of August.
The wildfire insurance authority would be governed by a nine-member board, with most of the directors chosen by the governor and some by legislative leaders.
The goal of the plan is to create something akin to an additional layer of insurance coverage for the utilities, given that utility company officials have found it difficult to
increase coverage through traditional means. Mayes said his bill would require investor-owned utilities — including Southern California Edison, Pacific Gas & Electric Co. and San Diego Gas & Electric Co. — to use money from shareholders to help fill the wildfire fund’s coffers.
“It cannot all fall on the backs of ratepayers,” Mayes said. “This is an important piece of a comprehensive plan to ensure California’s energy utilities are financially stable.”
The proposal is being circulated among stakeholders involved in negotiations over a comprehensive wildfire liability plan, one of the most contentious issues left for legislators to resolve this month. Gov. Jerry Brown has proposed loosening the process by which utility companies are held liable for wildfire costs when their equipment contributes to sparking a blaze. Utility companies also support that proposal, along with potential regulatory changes that would incentivize wildfire mitigation efforts.
On Tuesday, a special legislative committee hearing turned from the ongoing discussion of liability issues to focus on vegetation management and the options for thinning overgrown forests. State officials said there is some $320 million budgeted for fire prevention, but Ken Pimlott, director of the California Department of Forestry and Fire Protection, told legislators that the agency is still a long way from being able to do more than broad inspections of fire zones and conduct a limited number of controlled “prescribed” fires.
Several lawmakers lamented local or regional environmental procedures that limit the controlled fires out of concerns for air quality, which they contend pale in comparison to the effects of fires such as those that have burned more than 750,000 acres this year.
“If we reduce the fuel, period, the fires aren’t as intense,” Assembly Republican Leader Brian Dahle of Bieber said.
Lawmakers, timber and environmental groups also debated the use of biomass plants, which burn wood and other products to create energy. Representatives of the Sierra Club told the committee that biomass produces an unacceptable amount of air pollution, while others said there are too few workable solutions to help mitigate the state’s increased fire danger.
The Legislature is expected to craft a package of wildfire-related laws before adjourning Aug. 31. The discussions have focused on systemic challenges as California’s climate grows warmer and drier and its residents move farther into rural and wildland areas.