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California lawmakers drop wildfire utility liability protection plan

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Read all of the PD's fire coverage here

California lawmakers have set aside a heated battle in Sacramento over just how much PG&E and other power companies should pay in financial damages when their equipment sparks wildfires.

With two weeks left in the current legislative session, state Sen. Bill Dodd, D-Napa, confirmed Saturday that a package of proposed laws being advanced by a joint committee will not include changes that would shield California’s electric utilities from strict liability for future wildfires. They will instead focus on fire prevention measures such as forest management and improving electrical infrastructure.

The high-stakes issue is worth billions to the San Francisco-based utility company, which has engaged in a 10-month lobbying campaign to change an obscure law called inverse condemnation, which requires utilities to pay for wildfire damage to private property caused by their equipment even when they’re not found negligent.

Dodd, who co-chairs a bipartisan committee convened this year to examine laws related to fire preparedness and response, said after heated hearings on the issue this month there was neither the political will nor the time to fully examine California’s liability laws before the Aug. 31 deadline to put bills before Gov. Jerry Brown.

“Nobody wants to bail out PG&E, but if you don’t have a fiscally solvent utility, that’s bad for ratepayers,” Dodd said. “What we need to do is hold them (utility companies) accountable but at the same time ensure viability. And we can do that without changing inverse condemnation.”

This week, the conference committee — which includes Dodd and Assemblyman Jim Wood, D-Santa Rosa — will consider a list of fast-track proposals still being drafted by legislative staff in all-weekend meetings that must be debated, revised and finalized before the end of the month, according to Dodd.

The ideas that make it through that process will be wrapped into Senate Bill 901. PG&E company representatives didn’t respond to messages seeking comment Saturday.

The liability issue became an immediate priority for PG&E in Sacramento after the October firestorm laid bare the increasing likelihood of catastrophic wildfires expected to come from a warmer and drier climate. Cal Fire investigators have since determined PG&E equipment started 12 of the major wildfires that ignited Northern California in October, and the company violated safety codes in eight of those cases. Total damages have been estimated at $10 billion.

State fire investigators have not yet released the cause of the most destructive and deadly of the October blazes, the Tubbs fire, which burned from Calistoga to Santa Rosa, destroying more than 3,300 Sonoma County homes and killing 22 people.

Company officials have said California’s current liability laws are overly burdensome and unlike those in other states. They expect to be held liable for at least $2.5 billion in damages for October’s North Bay wildfires and have about $840 million in liability insurance.

At stake, PG&E executives have said, is the company’s ability to provide services and avoid bankruptcy.

The company found support from Gov. Brown, who last month proposed softening the standard making California’s electric utilities financially liable by allowing judges to determine “whether the utility acted reasonably” in awarding damages in cases in which electrical equipment is a “substantial cause of the fire.”

Read all of the PD's fire coverage here

Brown’s proposal was lambasted by groups representing burned-out residents, cities and counties impacted by the fires as well as trial lawyers involved in the hundreds of fire-related lawsuits filed against PG&E.

Patrick McCallum, a Sacramento lobbyist whose Fountaingrove home was destroyed in the Tubbs fire, praised the move by lawmakers to drop efforts to reduce PG&E’s financial liability for fires ignited by its equipment, which would have required altering private property protections guaranteed by the state constitution.

Groups like his representing California counties, residents whose homes were burned, homeowners insurance companies and trial lawyers launched a strong rebuttal to PG&E’s lobbying efforts in Sacramento this spring, though Gov. Brown and other lawmakers have said any new laws would not retroactively change liability for the 2017 fires. McCallum said he feels those efforts have paid off, but that he wishes they could have focused their energies on supporting wildfire prevention and other issues.

“For victims, whether we’re homeowners or cities or counties or small businesses, it’s a relief,” said McCallum, who heads a group called Up from the Ashes representing residents who lost their homes. “It’s a relief to know that our legal ability to be reimbursed by the damage — that in this case a utility makes — that we can be reimbursed and that our constitutional rights haven’t been taken away.”

You can reach Staff Writer Julie Johnson at 707-521-5220 or julie.johnson@pressdemocrat.com. On Twitter @jjpressdem.

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