Bill would curb power companies from passing disaster costs on to customers
Several state lawmakers introduced legislation Wednesday to ensure California’s big utilities can’t saddle customers with higher rates if the utility has been negligent in connection with disasters such as wildfires.
The lawmakers are alarmed by proposals from PG&E and other power companies to pass through to customers costs linked to the Wine Country infernos and other disastrous blazes.
Investigators have yet to determine what caused the North Bay fires. But lawmakers want to ensure that the electric utilities serving California can’t recover costs from any practices found negligent by raising customer rates.
“The practice is an outrage and it’s time to stop allowing utilities to push the burden of their negligence onto the backs of customers,” said state Sen. Jerry Hill, a longtime PG&E critic, in a prepared statement.
San Francisco-based PG&E said Wednesday that it faces the forbidding prospect of being obliged to pay for the property damage and attorneys fees connected with the North Bay fires if it is determined that the utility’s equipment played a substantial role in the fires — even if PG&E properly followed rules for equipment maintenance.
PG&E said reforms are needed in that method, known as inverse condemnation, and its application to utilities.
The bill introduced Wednesday, SB 819, was authored by Hill, state Senators Ben Allen, Bill Dodd, Mike McGuire and Scott Wiener, and Assembly members Marc Levine and Jim Wood.
“Victims of devastating fires and other tragedies, and ratepayers in general, should not be forced to pay for the mistakes made by utilities,” Sen. Hill said.
But PG&E believes inverse condemnation imperils the financial health of the state’s big power companies.
“Allowing essentially unlimited liability undermines the financial health of the state’s utilities, discourages investment in California and has the potential to materially impact the ability of utilities to access the capital markets to fund utility operations,” PG&E said.