Legislature abandons revamp of fire liability

Calling it ‘distraction,’ state lawmakers give up on effort to set new standards for electric companies.

SACRAMENTO — California lawmakers have scuttled their effort to craft a new liability standard for electric utility companies in the aftermath of a wildfire, a leader of the negotiations said on Saturday.

“It clearly became a distraction,” said state Sen. Bill Dodd (D-Napa), the cochairman of a joint legislative conference committee that was convened earlier this summer to address wildfire prevention and liability issues.

California’s large investor-owned utilities contend that the existing liability rules are too onerous and costly.

Under what’s known as “inverse condemnation,” a utility company can be held liable for costs related to a wildfire involving its equipment, even when the company followed all existing safety regulations.

The topic was one of several key issues addressed by the committee, but was widely seen as the centerpiece of the negotiations.

Pacific Gas & Electric Co., whose equipment has been blamed for starting several of the deadly blazes in Northern California last year, has warned it faces bankruptcy in the face of what could be $2.5 billion or more in damage awards.

But a number of stakeholder groups said they were strongly opposed to modifying the liability rules.

Local governments and consumer groups in particular insisted that the existing rules ensure residents will be quickly compensated for their losses.

They warned that a loose, more subjective standard would result in lengthy lawsuits with utility companies.

“It just felt like the ultimate bailout of the utilities,” Dodd said.

The decision to remove the hot-button topic from negotiations is a setback for Gov. Jerry Brown, one of the staunchest supporters of changing the liability rules.

Last month, Brown offered a draft proposal that would have given judges new discretion in assessing lia-

bility.

The governor’s office declined to comment Saturday.

Under Brown’s plan, courts would have had to “balance the public benefit” of the utility company’s services to consumers with the “harm caused to private property.”

And although the proposal would have increased fines and barred electric utilities from passing the costs to their customers, it would also have given relief to any company that complied with safety regulations.

Dodd, who represents some of the Napa County communities hardest hit by wildfires in 2017, said the liability issue seemed illsuited to a compromise this summer, given that this year’s deadliest fires all appear to have origins unrelated to utility equipment.

“I’ve had some of the conference committee members say, ‘Why are we talking about anything else other than reducing the [flammable] fuels in our state?’ ” Dodd said.

He said other parts of the governor’s proposal, including new regulations that focus on vegetation management around power lines, will remain in play as lawmakers rush to craft a plan before the Legislature adjourns for the year on Aug. 31.