The bailout that wouldn’t die
Fire seasons and legislative sessions come and go, but the PG&E bailout is forever. That’s the apparent upshot of California lawmakers’ latest proposal to rescue Pacific Gas and Electric Co. from the consequences of wildfires started by its power lines.
On Friday, a week after a special legislative committee abandoned plans to relieve PG&E and other utilities of liability for future disasters, it unveiled the outlines of a proposal that could help the company force its customers to pay off billions of dollars in potential damages resulting from last year’s catastrophic Wine Country wildfires.
The details remained vague with only a week left before the end of the session, but the legislative framework threatened to hand PG&E a blank check to charge ratepayers for fire damages before investigators finish assessing the extent of the company’s responsibility. The committee proposes to allow PG&E and other utilities to issue bonds to cover wildfire liabilities that would be paid off through charges added to their customers’ bills. The utility expects to face billions of dollars in damages as a result of the October fires, 16 of which have been linked to its equipment and 11 of which have been referred for criminal investigation, with conclusions about the deadliest fire yet to be announced.
PG&E, its employees and sympathetic politicians have argued that with climate change making fires more destructive, the utility faces a return to bankruptcy without a government lifeline, a cause the company pushed relentlessly in expensive lobbying and advertising campaigns. The trouble is that if utility executives and shareholders face scant consequences even in cases where the utility broke state law, there will be less incentive for it to act more responsibly to head off future fires.
State Sen. Bill Dodd, D-Napa, a co-chairman of the committee, said the legislation would “protect utility ratepayers from bearing undue costs.” A representative of manufacturers and other major ratepayers argued more persuasively that the plan “looks like a bailout, smells like a bailout and certainly feels like a bailout.”
To their credit, legislators have dropped an even more dubious plan to dramatically narrow utilities’ liability for future fires and other disasters, at least for the time being. And they are proposing a series of more reasonable and necessary measures to limit the ravages of wildfires as part of an omnibus bill, including funding and regulatory changes to strengthen cooperation among firefighting forces and clear more combustible brush and trees.
In the aftermath of last year’s unprecedented destruction and with another frightening fire season under way, the Legislature should focus on prevention and preparedness measures that make Californians safer. Softening the consequences of causing fires, particularly in cases where wrongdoing played a role, will have precisely the opposite effect.