Lawmakers punt on plan to have utility ratepayers foot part of wildfires debts

SACRAMENTO - Stymied by controversy over a plan to make utility ratepayers responsible for some of the costs of wildfires, a special legislative committee Monday night punted the high-stakes issue to a proposed five-member commission that'll have nearly a year to come up with solutions.

The commission's structure and goals were detailed in a 72-page proposed wildfire response bill posted Monday night on the website of the 10-member bipartisan conference committee on wildfire prevention as it began deliberations in a nearly empty Capitol building.

Throughout the day Monday, lobbyists and other stakeholders in the contentious issue speculated on the fate of the proposed bill that initially included a plan to allow PG&E and other utilities to sell state-authorized bonds to cover a portion of the damages from last year's devastating wildfires, with ratepayers responsible for paying the bond debt through their utility bills.

A PG&E spokeswoman said Wednesday that the cost to the average residential customer would be about $5 a year for every $1 billion in financing over the life of the bonds.

PG&E has said it expects to pay $2.5 billion in damages and possibly much more. Total damage estimates could hit $10 billion.

Patrick McCallum, a Sacramento lobbyist who lost his Fountaingrove home to the October firestorm, has led a coalition of displaced residents and trial attorneys called Up from the Ashes.

Assembly Democrats were wary of enacting any measure that smacked of a bailout for PG&E, including the bonding proposal, McCallum said.

“We're still treating it as a work in progress,” committee co-chair Assemblyman Chris Holden, D-Pasadena, said, leading off the hearing on the revised bill, which few people had seen prior to the hearing.

The proposed bill, which was due for release by Tuesday, must be passed by both the Assembly and Senate by Friday, the end of the legislative session.

The bonding process, called securitization, was included in a nine-point outline released by the committee Friday, setting off intense negotiations between lawmakers and lobbyists over the weekend and into Monday, when the inclusion of damages from the 2017 wildfires surfaced as part of the proposed legislation.

There appeared to be no reference to that condition in the measure released Monday night.

Assigning liability for the damages caused by power company equipment was the thorniest issue from the start of the committee's deliberations, and members had said from the start last month that the bill would not apply retroactively to the monstrous wildfires of 2017.

At the conference committee's hearing Friday, members of the public pressed for protection of ratepayers and assurance PG&E remains solvent.

Under the bonding process initially proposed, the California Public Utilities Commission and a group of financial experts would collaborate in determining how much PG&E could pay without risking bankruptcy and what percentage of the costs could be attributed to the utility's negligence versus other factors, such as climate change.

Instead, the proposed commission, appointed by the governor and top lawmakers, will hold at least four public hearings throughout the state and come up with options that would “socialize the costs associated with catastrophic wildfires in an equitable manner by next July,” according to the bill.

“It's a compromise. I think it's fine,” McCallum said.

More than 100 people attended the committee's late-night meeting.

“These are stakeholders,” one observer said, noting representatives from power companies, the insurance industry and local government in the audience.

You can reach Staff Writer Guy Kovner at 707-521-5457 or On Twitter @guykovner.

Editor's note: A previous version of this story contained incorrect information about the cost to PG&E ratepayers of a legislative proposal to allow the utility to sell state-authorized bonds to pay for wildfire damages. A PG&E spokeswoman said the cost to the average residential customer would be about $5 a year for every $1 billion in financing over the life of the bonds.

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