California lawmakers want to block utilities from passing on wildfire costs

Dive Brief:

Several state lawmakers intend to propose new legislation next year that would block investor-owned utilities from recovering the costs associated with wildfires if they are determined to be at fault in starting those fires.
Though the law would have wider impacts, it is being introduced in the wake of a massive October wildfire that devastated Sonoma and Napa counties in California's wine country. The state's Department of Forestry and Fire Protection (Cal Fire) is investigating whether Pacific Gas and Electric's equipment may have been responsible. The utility has said third-party equipment may be at fault.
At the same time, San Diego Gas and Electric Company is attempting to recover $379 million in costs from the 2007 Witch, Guejito and Rice fires, though a proposed decision at the California Public Utilities Commission would deny that bid.

Dive Insight:

All three of California's major utilities want SDG&E to recover costs from several 2007 wildfires, possibly helping lay the groundwork for similar claims. The CPUC is scheduled to consider that case this week, though the San Diego Union-Tribune notes it is possible a decision will be delayed.

The case is making headlines as PG&E's possible role in last month's wildfire is now under scrutiny. Earlier this month, the utility in a legal filing shifted blame to third-party equipment, though the cause is still under investigation.

In the meantime, several California lawmakers want to make it impossible for utilities to recover those costs if they or their equipment are determined to be at-fault.

“This practice is an outrage,” Sen. Jerry Hill (D), said in a statement. “Victims of devastating fires and other customers should not be forced to pay for the mistakes made by utilities. It’s time to stop allowing utilities to push the burden of their negligence onto the backs of customers.”

Hill intends to introduce the legislation Jan. 3 when the state Legislature reconvenes. PG&E, in maintaining its innocence, has pointed to a report it submitted to the California Public Utilities Commission, which notes that Cal Fire took possession of several pieces of equipment not owned by the utility, including distribution, transmission and overhead conductor equipment.

Hill has also floated the idea of breaking up PG&E in some way, if they are found liable for the fire.

Hill told The Union Democrat that “if we find that in this particular case — and we don’t know the cause yet — then frankly I don’t think PG&E should do business in California anymore. ... They’ve crossed the line too many times. They need to be dissolved in some way, split.”