Sonoma County fire survivors rally in support of state wildfire-recovery fund

The "Follow This Story" feature will notify you when any articles related to this story are posted.

When you follow a story, the next time a related article is published — it could be days, weeks or months — you'll receive an email informing you of the update.

If you no longer want to follow a story, click the "Unfollow" link on that story. There's also an "Unfollow" link in every email notification we send you.

This tool is available only to subscribers; please make sure you're logged in if you want to follow a story.

Please note: This feature is available only to subscribers; make sure you're logged in if you want to follow a story.

Subscribe

SACRAMENTO — The state Senate Monday night approved wildfire prevention and safety legislation backed by the governor that would help utilities compensate victims of future infernos and provide 2017 fire survivors leverage to resolve damage claims against PG&E through its bankruptcy proceedings.

The bill, which appears to be on a fast track to pass before the main legislative session ends Friday, is part of Gov. Gavin Newsom’s plan to bring stability to California’s energy marketplace rocked by wildfires in 2017 and 2018. The influx of fires has financially impaired utilities and sent Pacific Gas and Electric Co. into bankruptcy early this year, because of an estimated $30 billion in claims from blazes the past two years.

Earlier Monday, the Senate Energy, Utilities and Communications Committee approved the legislation, AB 1054, by a 9-2 vote. The clock is ticking since lawmakers hope to pass the legislation — which needs a supermajority vote in both houses to send it to the governor by the end of the week — before a monthlong recess that occurs at the same time wildfire risks escalate with the hot and dry summer weather.

The bill has been a top priority for Northern California lawmakers for months as they wrangled with how to hold PG&E, the state’s largest utility, accountable for claims 2017 fire survivors had lodged against the utility before it sought Chapter 11 bankruptcy protection. Some of the lawmakers pushed back in late June after Newsom first proposed a $21 billion wildfire-recovery fund to help gird utilities against crippling financial damage from future catastrophes.

They demanded the state require utilities to upgrade the safety of their power systems before they could tap any state fire recovery assistance.

The debate took on an even greater urgency and also became a priority for Southern California legislators when Standard & Poor’s credit-rating agency recently indicated that it may soon downgrade the creditworthiness of the parent companies of San Diego Gas & Electric and Southern California Edison, the state’s other two large investor-owned utilities, because of potential wildfire liabilities. A downgrade would almost certainly lead to higher monthly electricity bills for customers of the utilities.

“We must stand by victims of California’s unprecedented wildfires, prevent future disasters and protect utility customers from unfair rate hikes,” said Sen. Bill Dodd, D-Napa, who sits on the energy and utilities committee and voted for the legislation. “Simply doing nothing and allowing utility rates to skyrocket is not an option. Clearly, this bill is our best hope.”

The complex legislative package would provide $21 billion of initial wildfire recovery funding to provide compensation to victims of future infernos sparked by equipment from utilities, such as downed power lines. PG&E equipment was deemed responsible for causing 17 of 18 of the Northern California wildfires that broke out in October 2017, according to Cal Fire.

The exception was the Tubbs fire, which destroyed some 4,600 homes, mostly in Santa Rosa, but was linked to privately owned and maintained power equipment.

Half of the funding, $10.5 billion, would come from continuing the $2.50 monthly surcharge that has been added to ratepayers’ electricity bills since the 2001 energy crunch. San Diego Gas & Electric and Southern California Edison would pay another $10.5 billion to form a state wildfire-insurance fund, but that money would not come from their customers.

Utilities would be able to tap the money only if they meet the state’s fire-safety standards.

Also, PG&E and the state’s other two investor-owned utilities would have to invest a combined $5 billion in fire prevention upgrades to their power networks over three years. That would include tree trimming, burying power lines underground and replacing wooden utility poles.

The bill also includes a caveat that would place additional requirements on PG&E before the company could access the state fire insurance fund.

The state’s largest utility would have to exit bankruptcy with a reorganization plan “neutral to ratepayers” and resolve fire victims’ outstanding claims from the 2017 and 2018 wildfires by June 30, 2020.

Those fire survivors are competing for payments in PG&E’s bankruptcy proceedings in a San Francisco courtroom with other creditors, including lenders and contractors. Ultimately, a federal bankruptcy judge will make the final decision on who gets paid and how much.

Given the greater wildfire risks statewide, PG&E officials have said after emerging from bankruptcy the only pathway for the utility to remain financially viable would be a state backstop.

“They are going to need that fund,” said state Sen. Mike McGuire, D-Healdsburg, who also voted in favor of the legislation.

The stipulation placed on PG&E to resolve outstanding damage claims from past fires is why Sonoma County 2017 fire survivors support the legislation and went to Sacramento Monday to lobby for its passage.

“That’s why I use the word ‘leverage.’ It’s not direct compensation. It puts more leverage on PG&E to get more adequate compensation” from the utility and should speed the process, said Patrick McCallum, a Sacramento lobbyist and co-chair of wildfire victims group Up from the Ashes. McCallum lost his home in Santa Rosa’s Fountaingrove neighborhood in the October 2017 Tubbs fire.

His group had asked the state to extend PG&E a bridge loan the utility could use to help fire victims and then repay the state, but that idea was not included in the legislation the Senate approved Monday.

“We are far apart from what PG&E is offering, from what needs to be done to make (fire) victims whole,” McCallum said.

Any money 2017 fire victims can get from the utility through its bankruptcy process will be critical since many were underinsured on their houses that burned, putting them in a bind as they now struggle to rebuild.

Brenda Gilchrist, a Tubbs fire survivor who made the trip to Sacramento, said she was underinsured by about $350,000.

“I have been living with no actual place to call my own,” Gilchrist said during a press conference Monday with other fire survivors who support the wildfire prevention and safety legislation. “In my case, I now own a piece of dirt.”

The legislative package also would tie fire safety measures to executive compensation before utilities could participate in the state fire insurance fund.

This would be an attempt to block executive bonuses like the nearly $11 million in special payouts to senior managers that PG&E has requested through bankruptcy court.

“There will no longer be any guaranteed bonuses,” McGuire said.

Staff Writer Bill Swindell can be reached at 707-521-5223 or bill.swindell@pressdemocrat.com.

Show Comment

Our Network

Sonoma Index-Tribune
Petaluma Argus Courier
North Bay Business Journal
Sonoma Magazine
Bite Club Eats
La Prensa Sonoma
Emerald Report
Spirited Magazine