Los Angeles Times

State bill targets utility blackouts

Under proposal, firms could be required to refund customers for losses tied to outages.

- By Taryn Luna

Proposal would force power companies to reimburse customers for financial losses tied to outages.

SACRAMENTO — California utilities could be banned from charging for electricit­y during power shut-offs and required to reimburse their customers for spoiled food or other financial losses under legislatio­n that cleared the state Senate on Monday.

Senate Bill 378, opposed by Pacific Gas & Electric and the state’s two other largest utilities, is a response to the power shut-offs that left millions in the dark last year, a tool the companies began using to reduce the risk of equipment starting wildfires. Supporters say the bill seeks to balance the need to prevent blazes that have killed scores of California­ns with the unintended consequenc­es of outages for residents and businesses.

“I’m not objecting to using surgical, well-planned blackouts to prevent wildfires,” said state Sen. Scott Wiener (D-San Francisco), who introduced the bill. “Right now the fundamenta­l problem is that utilities have no incentive or obligation to take into account the harm to people that is caused by these blackouts.”

Widespread outages in October raised concern throughout the state for elderly and medically fragile customers. In Northern California, Gov. Gavin Newsom and other state officials criticized Pacific Gas & Electric for applying the blackouts too broadly.

Businesses complained about being forced to close and losing revenue. Local government­s struggled to keep traffic lights running, respond to 911 calls and maintain regular functions.

Wiener said he hopes his legislatio­n will force utilities to consider the financial cost to their customers and to only use blackouts as a measure of last resort as originally intended. He described the existing framework of state laws and regulation­s as the “Wild, Wild West,” which allows utilities to shut off power to avoid billions in potential wildfire liabilitie­s without weighing the public safety risks.

But critics contend that the bill could swing the pendulum too far in the other direction, resulting in fewer intentiona­l blackouts and more wildfires.

“My concern is that we’re trying to save lives and these penalties may possibly lead companies to hesitate, to blink, when it come to the lives of individual­s,” said state Sen. Susan Rubio (DBaldwin Park), who voted for the bill but expressed reservatio­ns about its potential effects.

Under the proposal, state regulators would be required by June 1, 2021, to establish a mechanism for customers, local government­s and others to seek reimbursem­ent from utilities for losses from power outages and craft rules to determine if the utilities can increase rates to offset those payments. The bill would ban utilities from billing customers for electricit­y if they are out of power.

SB 378 also opens utilities up to civil liability if the California Public Utilities Commission determines the company failed to reasonably and prudently implement the outage. Wiener’s proposal allows for civil penalties of at least $250,000 for every 50,000 customers affected, which could be multiplied by each hour that an outage takes place.

The California Chamber of Commerce argues that the bill penalizes use of a safety measure already approved by the state. The Legislatur­e originally supported shut-offs as a method of last resort to save lives, and voted in 2018 to require the state’s three investor-owned utilities to annually submit outage protocols to the state.

“While we recognize that [outages] cause significan­t financial impacts to all involved and that conversati­ons around proper balance must continue, penalizing the use of [outages] is contrary to the state’s desire to prevent the catastroph­ic harm from wildfire-related events,” the chamber wrote in a letter to state legislator­s.

SB 378, opposed by PG&E, Southern California Edison and San Diego Gas & Electric, now moves to the Assembly as state regulators work simultaneo­usly to develop new rules around shut-offs in response to the outages last year. The PUC is expected to release guidelines in May regarding identifica­tion and communicat­ion with at-risk communitie­s before an outage.

 ?? Genaro Molina Los Angeles Times ?? POWER shut-offs left millions in the dark last year. Backers of SB 378 say it seeks to balance the need to prevent fires with the unintended consequenc­es of outages.
Genaro Molina Los Angeles Times POWER shut-offs left millions in the dark last year. Backers of SB 378 say it seeks to balance the need to prevent fires with the unintended consequenc­es of outages.

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