Governor Releases Wildfire and PG&E Plan That Includes Catastrophic Fire Fund Proposal That Could Raise Monthly Power Bills

Published on

By George Avalos, THE MERCURY NEWS

April 12, 2019

Governor releases wildfire and PG&E plan that could raise monthly power bills

New funding sources to pay for wildfire liabilities as well as legal reforms that could raise monthly utility bills, make insurance premiums more costly, and slash payments to wildfire victims, as well as holding PG&E strictly accountable for providing safe power services were among the proposals announced Friday by Gov. Gavin Newsom to ward off catastrophic infernos in California.

“PG&E hasn’t been a good actor,” the governor said during a news conference to discuss his proposals. “I’m not here to beat them up. But the state has suffered from their neglect and misdirection.”

Among the potentially controversial proposals: creation of a wildfire fund “to spread the cost of catastrophic wildfires more broadly among stakeholders” — a proposal that some skeptics believe could effectively mutate into a bailout of disgraced and embattled PG&E.

This proposal quickly raised warning flags with Consumer Watchdog, which is a harsh critic of PG&E, the PUC, and state politicians that the consumer group believes are inclined towards lazy oversight of PG&E.

“The problem with a catastrophic wildfire fund is who pays for it,” said Jamie Court, president of Consumer Watchdog. “Utility ratepayers and state taxpayers may be stuck with the bill.”

One goal of the wildfire fund would be “to spread the cost of catastrophic wildfires more broadly among stakeholders,” the governor’s report stated.

The governor made it clear that an array of interests throughout California could be obliged to help fill the coffers of such a fund.

“Who is going to pay for this? Everybody wants someone else to pay for this. The person behind the curtain is supposed to pay for this,” Gov. Newsom said. “We are all in this together. We all have responsibilities for this effort.”

The governor also called for reform of inverse condemnation, a state legal doctrine whereby PG&E and other major power companies in the state could be strictly liable if their equipment was a substantial cause of a fire, even if the utility followed established inspection and safety rules.

This sort of reform could ease the financial liabilities that PG&E and other utilities might face in the wake of a wildfire that involved their equipment, regardless of the maintenance actions on the equipment.

“Adopting a fault-based standard that would modify California’s strict liability standard to one based on fault to balance the need for public improvements with private harm to individuals” was a key approach proposed by the governor to address current inverse condemnation rules.

PG&E toppled into bankruptcy on Jan. 29, hoping to ward off a forbidding mountain of debts and wildfire-linked liabilities in the wake of a series of lethal wildfires in Northern California in 2015, 2017 and 2018.

The governor made it clear that PG&E — already a convicted felon for crimes it committed before and after a fatal explosion in San Bruno — must drastically change what some believe is the utility’s dubious approach to safe and affordable delivery of gas and electricity services.

“All options with PG&E are on the table,” Gov. Newsom said. “If they get in he way of doing the right thing, all options are on the table with PG&E.”

Consumer Watchdog warned that ordinary residents and utility customers in California are being excluded from meaningful input regarding the governor’s proposals.

“The utilities have given over $14 million to this crop of public officials in Sacramento, including the governor,” Court said. “Big money buys big ears in Sacramento. Consumers, ratepayers, wildfire victims don’t give big money and they need to be fairly represented.”

George Avalos is a business reporter for the Bay Area News Group.

Follow George Avalos @georgeavalos


Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases