State lawmakers tackle question of who pays for wildfires
Ten months after wildfires ravaged the North Bay, a high-stakes political tug of war is under way in Sacramento, where the governor, state lawmakers, utilities, local government officials and fire survivors are battling over who pays for at least $10 billion in damages.
As Santa Rosa and other fire-stricken communities struggle to rebuild, PG&E is lobbying hard for a limit to the financial liability of California electric utilities in the destructive wildfires expected to come as climate change exposes the state to a combustible “new normal.”
A 10-member bipartisan conference committee — including Sen. Bill Dodd of Napa and Assemblyman Jim Wood of Santa Rosa, both Democrats — was formed earlier this month to deal with a host of issues related to fire preparedness and response, many of them commonsense, such as forest management practices and emergency response systems.
But the conflict is coming from a PG&E-backed proposal to revise an obscure legal doctrine, called inverse condemnation, that requires utilities to pay for wildfire damage to private property even when they are not deemed negligent.
Geisha Williams, the utility giant’s CEO and president, has called it “simply bad public policy” and her company has spent $2.2 million on lobbying lawmakers in general during the 2017-18 legislative session.
While the Legislature is on recess, the conference committee will hold its first in a series of public hearings Wednesday at the Capitol, and PG&E will have an apparent ally in the lead-off witness.
Michael Wara, a lawyer and Stanford University scholar focused on climate and energy policy, is the lone witness on the subject of “Wildfire, Utilities and Climate Change.”
Wara did not respond to a request for comment Friday, but he was quoted in June as saying utilities have a good case for policy change. “The current legal regime, I believe, is unsustainable,” he said in Stateline, an initiative of The Pew Charitable Trusts.
Under inverse condemnation, PG&E could be at risk of bankruptcy from the next destructive wildfire.
“That’s a huge risk for their investors,” he said. “That’s like a coin toss with your money.”
Wara is a senior research fellow at the Steyer-Taylor Center for Energy Policy and Finance at Stanford.
Brad Sherwood, whose Larkfield home was destroyed by the Tubbs fire — one of the nearly 5,300 homes lost in Sonoma County — is adamantly opposed to a policy change, even if it is not retroactive, as state officials have promised.
“Now is not the time to let the utilities off the hook,” said Sherwood, who works as a spokesman for the Sonoma County Water Agency. “We know we have to be the voice for future wildfire survivors. They need to have every tool available to them to rebuild.”
The stakes are high for PG&E, which has said it has about $840 million in insurance coverage and expects to be held liable for at least $2.5 million in fire damages and possibly much more.
Compounding the utility’s predicament, Cal Fire has determined that PG&E power equipment was responsible for causing 16 major fires across Northern California in October and failed, in 11 blazes, to keep tree limbs clear from its equipment.
Meanwhile, the committee convened by Gov. Jerry Brown and top state lawmakers has until Aug. 31 to come up with a wildfire response bill that will be embodied in SB 901, a measure Dodd introduced in January.