California lawmakers finalize major wildfire response bill

State lawmakers Tuesday night quickly finalized a proposed wildfire response bill that would allow PG&E to lean on ratepayers as it seeks to cover staggering costs from the 2017 wildfires.

But to do so, the utility would have to open its books to the California Public Utilities Commission for a stress test to “determine whether those costs and expenses are just and reasonable,” according to a 62-page bill by state Sen. Bill Dodd, D-Napa.

The bill, SB 901, was approved on a 7-1 vote with one member abstaining and one absent and faces a Friday night deadline to be approved by both houses of the Legislature.

If it becomes law, the commission would be authorized to assess PG&E’s finances to calculate the “maximum amount the corporation can pay without harming ratepayers or materially impacting its ability to provide adequate and safe service.”

For any fire costs deemed reasonable by the commission, PG&E or any other utility may apply for state-sponsored funding, including recovery bonds that would be repaid by ratepayers.

The average residential customer would pay about $5 a year for every billion dollars in financing over the life of the bond, PG&E said.

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

The vote capped a 45-minute public hearing, the seventh and final meeting for the 10-member bipartisan legislative committee formed in July to craft legislation dealing with a host of issues regarding the wildland blazes ravaging California.

The committee of six Democrats and four Republicans strove to balance the high-profile issues of protecting utility ratepayers and assuring that PG&E does not go broke.

Representatives of utilities and major power users said the proposed bill failed to protect ratepayers and stabilize their industry.

A San Diego Gas & Electric official said the bill left “great uncertainties about how the financial market will view this,” and a Southern California Edison representative said the cost-recovery plan lacked clarity.

A spokesman for the Western States Petroleum Association said the bill “is just protecting one bad actor, let’s be honest.”

A Sierra Club spokesman said the environmental group opposed the bill because its provisions dealing with forest management allow too many exemptions from California’s premier environmental law.

The Nature Conservancy favors the bill for providing “ecologically sound restoration of our forests,” a spokesman said.

Dodd said the bill represented “the best that we could do” and added that it “may be encouraging that both the ratepayers and utilities have a problem with it.”

Lynsey Paulo, a PG&E spokeswoman, said the utility appreciated the committee’s work, calling it “critical to our customers, the state and PG&E.”

“We are reviewing the proposed language to fully understand its implications, including potential impacts on wildfire victims and mitigation of future wildfire risks,” she said in an email.

Patrick McCallum, leader of a coalition of displaced residents and trial attorneys called Up from the Ashes, said the measure struck a balance between protecting ratepayers and assuring utilities remain solvent.

“California victims will be better, California will be safer and stronger,” he said.

McCallum, a Sacramento lobbyist, lost his Fountaingrove home to the October firestorm.

In a statement after the meeting, Wood noted that the bill included $1 billion over five years for vegetation management to reduce wildfire fuel, calling it “a significant improvement from the year-after-year battles that have been fought previously.”

Some of the funds will go to local government and private landowners to assist in clearing overgrown vegetation, he said.

Joining Dodd in voting for the measure were the committee’s other co-chairman, Assemblyman Chris Holden,?D-Pasadena; Sen. Hannah-Beth Jackson, D-Santa Barbara; Assembly members Jim Wood, D-Santa Rosa; Eloise Gomez Reyes, D-San Bernardino; Sen. Jeff Stone, R-Indio; and Assemblyman Brian Dahle, R-Bieber, in Lassen County. Sen. Anthony Cannella, R-Ceres, voted no, Assemblyman Chad Mayes, R-Yucca Valley, abstained and Sen. Ben Hueso, D-San Diego, was absent.

The meeting’s only controversy arose when Mayes made a motion to change one word from a “may” to a “shall,” complaining that the bill’s final draft was produced “just minutes ago.”

“The truth is this language was done in a back room” by staff members instead of legislators, Mayes said, calling the process “incredibly frustrating.”

Jackson said she was “not very happy” with the process, but joined Reyes and Holden in saying they would not support any changes in the text, and Mayes’ motion failed.

The brief hearing was a sharp contrast to the committee’s previous hourslong sessions.

Dodd noted beforehand that staff-level negotiations had gone on through the first two days of the week. One draft measure was released Monday night, and a revised version came out Tuesday.

“We wanted to make sure this was a fair plan to the ratepayers,” he said. “That’s what held it up.”

“I think we’ve got the best possible deal for ratepayers going forward,” Dodd said.

Dodd said that a five-member commission proposed to consider options for funding wildfire costs was not a substitute for committee action, but intended to keep the issue alive.

“We feel like there needs to be more discussion,” he said.