As fires ravaged California, utilities lobbied lawmakers for liability protection
As California’s deadliest wildfire was consuming the town of Paradise in November, some of the state’s top power-company officials and a dozen legislators were at an annual retreat at the Fairmont Kea Lani resort on Maui. In the course of four days, they discussed wildfires – and how much responsibility the utilities deserve for the devastation, if any.
It is an issue of increasing urgency as more fires are traced to equipment owned by California’s investor-owned utilities. The largest, Pacific Gas and Electric, could ultimately have to pay homeowners and others an estimated $30 billion for causing fires over the last two years. The most devastating of those, the Camp Fire, destroyed thousands of homes in Paradise and killed at least 86 people.
Realizing that their potential fire liability is large enough to bankrupt them, the utility companies are spending tens of millions of dollars on lobbying and campaign contributions. Their goal: a California law that would allow them to pass on the cost of wildfires to their customers in the form of higher electricity rates. After an earlier lobbying push, legislators have already voted to protect the companies from having to bear the cost of 2017 fires, and utilities are seeking the same for 2018.
The utility companies acknowledge that they may bear some responsibility but say not all of it, because climate change and development in remote areas have made wildfires more destructive. In addition, they argue that electricity rates would go up regardless of whether the state protected them because investors and banks could grow wary of lending to California’s energy sector.
But public interest groups say the utilities are effectively seeking a bailout for mistakes made by well-compensated executives. The utilities have been frequently criticized, for example, for not trimming trees along power lines. Some policy experts and lawmakers say it might be better to break up PG&E, replace its board and management or convert it into a publicly owned utility.
A utility pole smolders the day after the Paradise, Calif., blaze. Pacific Gas and Electric and other utilities want legislators to let them pass on the cost of damages to homeowners.