New state wildfire plan has a catch — and it’s a big one
Gavin Newsom’s new $21.5 billion California wildfire fund is being seen as a big victory for the governor. With good reason. The legislation offers a reasonable approach to solving the complex liability problem of who should pay when utilities cause destructive infernos.
But there’s a catch. And it’s a big one.
The success of the bill hinges on forcing PG&E to start putting safety before profits. The governor and the Legislature believe that incentives in the bill, AB 1054, combined with the appointment of a new California Public Utilities Commission president, Marybel Batjer, provide the tools to compel the utility to change its ways.
Good luck with that. When it comes to safety, PG&E has an abysmal track record. Consider:
• For a 14-year period, PG&E dumped more than 350 gallons of chromium-tainted wastewater into unlined ponds around Hinkley. The ensuing contamination resulted in a class-action lawsuit by dozens of people with a range of illnesses. PG&E wound up agreeing in 1996 to a $333 million settlement.
• In the wake of the 2010 San Bruno gas pipeline explosion, investigators discovered the utility had diverted ratepayer funds intended for gas pipeline maintenance to executive bonuses and shareholder dividends. The San Bruno tragedy killed eight people and destroyed a neighborhood. For that negligence, PG&E was convicted in federal court of six felony charges.
• PG&E knew for seven years prior to the deadly Camp Fire that the nearly 100-yearold transmission tower that caused the blaze needed to be replaced. But the utility did not fix the problem.
This level of ineptitude explains why we have repeatedly called on the governor and the Legislature to replace or break up the utility. Instead, they are counting on the new legislation and the new president of the PUC to put a halt to the utility’s costly calamities.
In order to tap into the wildfire liability fund, the utilities would be required to spend $3 billion on safety measures to reduce the threat of wildfires. They would also be required to comply with an annual safety certification process.
Here’s where it gets sticky. Batjer, the new PUC president, has a track record of revamping state operations — she was most recently brought in to fix the state’s woeful Department of Motor Vehicles — but has zero experience on utility industry issues. Californians shouldn’t forget that even Michael Florio, who brought a strong reputation as a consumer advocate when he was picked to become a PUC commissioner, was quickly swallowed up by the agency. It wasn’t long after his appointment that he joked with a PG&E executive in an email that he “had become an apologist for PG&E.”
Batjer will work with the newly created California Wildfire Safety Advisory Board, which is charged with reviewing and approving a utility’s annual safety plan. In the event of a wildfire, the utility would have to prove that it complied with the safety plan in order to receive any of the $10.5 billion contribution from ratepayers into the wildfire fund. The governor will appoint five members of the seven-person board. The other two will be picked by the Assembly speaker and Senate Committee on Rules.
It’s absolutely essential that the board have both the expertise and the willingness to hold utilities’ feet to the fire when both crafting and enforcing the safety plans. The alternative is continued failure on a massive scale at the expense of California ratepayers.