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