State needs to change liability laws
California is facing a challenging future, and anyone following the news of our state’s wildfires will understand why.
In the past 10 months, California has seen six of the 20 most destructive wildfires in its history. Two of these fires, including the largest in state history, are still burning. The devastating effects of climate change are unfolding here and now, yet the threat is only projected to get worse. The American Meteorological Society anticipates that wildfire risk in California will increase sixfold in the coming decades.
This problem is bigger than any one industry, and we must work together to solve it. At the same time, we must recognize that yesterday’s laws will not protect us from tomorrow’s devastating wildfires.
Our leaders in Sacramento have been tasked with developing comprehensive solutions that will help protect all Californians in the years to come.
PG&E is participating in these discussions, and our position is simple: We support reform that will protect wildfire victims, our customers and California’s clean energy future, while also holding utilities accountable if they fail to meet the state’s high standards.
We believe that any solution will be incomplete without accounting for the victims of the 2017 wildfires. To that end, PG&E supports AB33, which will compensate victims, reduce customer bill impacts and ensure utility accountability.
This bill will allow PG&E to use state-authorized low-cost bonds to raise the funds to pay the costs of the Wine Country fires, reducing customer costs by nearly a third when compared with traditional utility financing methods, while allowing for prompt resolution of damage claims. To be clear, this bill is not a free pass for utilities. It provides for the California Public Utilities Commission to review all costs. In the event they are not deemed reasonable, costs will not be borne by customers.
While the Legislature must address the victims of the 2017 wildfires, recent events demonstrate that the question of how liability is assessed for future wildfires must also be a part of the conversation.
Under today’s policies, utilities can be held strictly liable for damages caused by their equipment, even when they have followed established safety and compliance rules. The state’s application of this policy presumes that these costs will be passed on to all customers.
The proposed reforms would not offer a free pass for wrongdoing. If a utility is found negligent, then victims could still seek compensation, just as they can today.
We believe reforming these outdated laws represents a vital step toward the state’s goal of delivering 50 percent of our energy from renewable resources by 2030. California’s investor-owned utilities, including PG&E, are the single biggest partner the state has in meeting these clean energy goals. PG&E has spent nearly $19 billion in renewable energy procurement and generation from 2003 to 2017. Looking ahead, PG&E forecasts spending an additional $28 billion through 2030 toward procurement of renewable energy. This amounts to a total clean energy investment by PG&E of $47 billion. Maintaining these commitments and delivering on the clean energy California deserves depends on financially stable utilities to support these long-term investments.
Our climate has changed, yet California’s liability laws haven’t kept pace. Without a solution, these outdated laws threaten to jeopardize our state’s clean energy progress and leave us vulnerable to the future effects of climate change.
As the Legislature continues its work, we ask that the solutions to these climate-driven disasters not come at the expense of the state’s clean energy future.