PG&E effort to ease wildfire liability dies

A Pg&e-backed legislative effort to ease the utility’s financial liability for wildfires such as the ones that scorched the North Bay Wine Country and other regions last October has died for this year, state officials said Monday.

The proposal would have dramatically reshaped California legal and regulatory frameworks set up to determine whether utilities and their shareholders – or the companies’ rate-paying customers – ultimately pay for costs associated with wildfires sparked by the utilities’ infrastructure. The policies, known as inverse condemnation, hold utilities strictly liable if their equipment was a factor in starting a wildfire, even if the utility properly conducted maintenance and facilities upgrades.

A state legislative panel headed by state Sen. Bill Dodd has been meeting to ponder various proposals, including measures to ease wildfire-related liabilities. Dodd is a Democrat whose legislative district includes parts of Contra Costa, Napa, Sonoma, Solano, Yolo and Sacramento counties.

“The provisions related to inverse condemnation are not going forward,” Paul Payne, a spokesman for Sen. Dodd, said Monday. “That part of it is now dead.”

Some parts of the conference committee legislation, such as preventive measures related to wildfires, might be more likely to proceed.

“There are other provisions that could move forward that are less controversial than inverse condemnation,” Payne said.

However, some measures, including one that would enable PG&E to seek state-secured bonds – essentially a type of mega credit card – to finance, up front, billions of dollars in costs for the infernos so fire victims could be paid rapidly. The amount financed through the securitization scheme could be paid back by PG&E at a relatively low interest expense, the legislation indicated.

This proposal, embodied within AB 33, which was crafted by Assemblyman Bill Quirk, a Democrat whose district includes parts of Alameda County, could potentially mean that PG&E customers are on the hook to repay the secured bonds. PG&E employs Quirk’s son.