Leaders leave PG&E on hook for fire liability

California’s top political leaders on Wednesday signaled how they want the state to address its utilities’ growing wildfire problems this year, opting not to endorse the most controversial potential legal change after the release of a long-awaited draft report on the issue.

An early version of recommendations from a special government-created wildfire commission criticizes the state legal doctrine that holds utilities responsible for wildfires

even if they were not negligent. The doctrine “imperils the viability” of utilities and should be changed, the draft report said, but Gov. Gavin Newsom and the leaders of both state legislative chambers showed little appetite for tackling that kind of reform in the near future.

Wildfire commission members are trying to help prevent a repeat of the recent perils faced by Pacific Gas and Electric Co., which was found responsible this month for the 2018 Camp Fire, the deadliest and most destructive wildfire in state history. PG&E is currently in bankruptcy protection in large part because of that disaster.

The draft report must still be discussed and voted on by the commission next Friday before recommendations are formally sent to the governor and the Legislature. But Newsom, state Senate President pro tem Toni Atkins and Assembly Speaker Anthony Rendon are already staking out their positions.

Instead of seeking a controversial fight to loosen the state’s strict liability doctrine, Newsom, Atkins and Rendon said in a joint statement that they would support giving utilities more regulatory certainty over how they can pass wildfire costs along to their customers.

The leaders said they will also support giving utilities access to bridge financing, which they could use to pay out wildfire-related claims until regulators decide what costs can be passed on to customer rates.

Newsom, Atkins and Rendon said they are “committed to continuing the exploration of the impact of strict liability on the costs to ratepayers, on wildfire victims and on the solvency of our utilities.”

“If the trend of massive, catastrophic wildfires persists, we may need to pursue additional changes,” their statement said.

Any potential changes to the strict liability doctrine, known as inverse condemnation, would almost certainly provoke strong opposition from consumer advocates, wildfire victims’ attorneys and others. PG&E has unsuccessfully sought changes to the doctrine before.

Patrick McCallum, a lobbyist who leads a wildfire victims’ advocacy group called Up From the Ashes, said he’s “particularly pleased” that Newsom and legislative leaders chose to not press for reversal of the strict liability doctrine. That could have impacted future victims’ ability to receive compensation, he said.

“All of us, 20,000 families and businesses, are emotionally and financially impacted by the losses that we have to face,” he said. “This is a relief that we can move forward and focus on safety.”

McCallum and his wife lost their home, and nearly their lives, when the Tubbs Fire ravaged Santa Rosa in 2017. He said the remaining recommendations lawmakers plan to pursue would help prevent devastating fires in the future and ensure PG&E is stable enough to compensate victims and improve safety.

PG&E responded to the report in a statement Wednesday evening that didn’t directly address the announcement from state leaders or the specifics of the commission’s draft recommendations. The company was still reviewing the report, spokesman James Noonan said in an email.

“As the state continues to work toward a policy solution, we want our customers and the public to know we are committed to resolving wildfire victims’ claims fairly and expeditiously, continuing to deliver safe and reliable energy to our customers, and supporting the state’s bold clean energy goals,” Noonan said in the email.

Among the commission’s recommendations to reduce wildfire risk:

Require any municipality that approves new development to be able to provide firefighting services within a certain time limit.

Provide major funding for wildfire mitigation, which could include small grants for homeowners to make changes so structures are less susceptible to fire embers.

Make property maintenance laws more consistent. That could include minimum standards for fire risk, and possible penalties for noncompliance.

Formally known as the Commission on Catastrophic Wildfire Cost and Recovery, the group behind the report was formed because of a 2018 law, SB901, that passed in response to the deadly fires that burned through Wine Country the previous October.

State Sen. Bill Dodd, DNapa, who authored the law, called the assessment from Newsom, Atkins and Rendon not to push for inverse condemnation reform this year “fair.” He cited the potential for a fiercely fought court battle.

“That could be something for later on down the road,” Dodd said. “I don’t see that as a viable strategy for this summer, for the next fire season.”

The Assembly Utilities and Energy Committee has scheduled a hearing on June 5 to discuss the wildfire commission’s report, according to Assemblyman Chris Holden, D-Pasadena, who chairs the committee.

Wildfire commission members built on some proposals outlined in April by a Newsomappointed “strike force” on wildfires and climate change. After that report, the Senate formed its own special committee, which will also have a hearing about the new recommendations, said Dodd, who chairs the new group.

Newsom has challenged lawmakers to “get something big done” by July.