We shouldn’t pay for PG&E’s mistakes
It’s hard to believe that California legislators may let Pacific Gas and Electric Co. escape responsibility for the wildfires its equipment caused last year and stick consumers with the bill.
It reminds me of the day back in November 2002 when our home in Burlingame was one of 627,000 in the Bay Area that lost power during the first major storm of the season, and I read in the paper — by candlelight — that state regulators had voted to make Californians pay $6 billion to bail out the state’s largest utilities because of the poor decisions they made during the state’s energy crisis.
After Burlingame residents filed more than 250 complaint letters with the California Public Utilities Commission, PG&E upgraded our city’s power lines and ended recurring power failures, some of which used to last for days. Then, after a PG&E gas line exploded in San Bruno in 2010, killing eight people, we learned that PG&E’s halfcentury-old underground lines on the Peninsula hadn’t been maintained. State regulators approved a rate increase for two years to fix them. Ultimately, the utility was fined $1.6 billion and convicted of six felony counts for the San Bruno tragedy.
At least three proposals now being considered by state legislators would change the law to allow PG&E to shift responsibility for wildfire costs to victims and their insurers, ratepayers or the state. The utility’s insurance coverage falls short of covering the cost. But PG&E’s escape plan is complicated by being found at fault for 16 of 2017 Wine Country wildfires, perhaps criminally in 11. Making giant payouts to company executives and maintaining an army of lobbyists and lawyers also do not support the company’s cries of financial distress.
PG&E spent $4 million to lobby officials and influence campaigns last year, and it was the top spender on lobbying in the state last quarter, when it spent $1.7 million on lobbying, primarily on wildfire issues. Its PR campaigns blame climate change, not its own practices, for the challenges it faces.
There is precedent for holding utilities responsible for faulty equipment and poor maintenance. Last year, state regulators refused a request by San Diego Gas & Electric Co. to recover $379 million in fire costs from ratepayers. Investigators from the California Department of Forestry and Fire Protection said the fires were caused in part by problems with power lines and other SDG&E equipment.
Under the constitutional protection of “inverse condemnation,” a utility must compensate property owners for damages caused by its equipment, whether or not the company behaved negligently. To the delight of utilities, Gov. Jerry Brown unveiled a proposal in late July that would ease utilities’ burden of strict liability and change the criteria for courts when considering inverse condemnation in civil suits.
In contrast, Senate Bill 819 by state Sen. Jerry Hill does not alter the existing protections to property owners under inverse condemnation or change the standards California regulators use in determining whether utilities acted unreasonably or imprudently in cases involving damages caused by electrical or gas companies. SB819 ensures that ratepayers do not shoulder the costs of utility negligence, and it provides incentives for utilities to act responsibly.
Approving SB819 is a much better idea than changing state law to reduce utilities’ liability responsibility for poor maintenance and safety practices. If PG&E and others don’t have to pay for the consequences of their actions, they will have no incentive to change their bad habits. We’ll just keep paying the bill.