Utility Union Benefits From California Wildfire Legislation
By Jonathan J. Cooper, ASSOCIATED PRESS
August 31, 2018
SACRAMENTO, Calif. (AP) – Utility workers would get protections for their jobs, salaries, benefits and pensions as part of a measure allowing California power companies to raise electric bills to cover the cost of lawsuits from last year’s deadly wildfires
The job protections benefit politically connected unions that joined with utility management in lobbying aggressively for the ability to pass along the cost of 2017 wildfire lawsuits to customers, even if the utility behaved negligently.
The measure, which also includes efforts to improve forest health and prevent wildfires, is scheduled for votes in the Senate and Assembly Friday night following months of contentious negotiations.
Large power users and ratepayer advocates have blasted the measure, calling it a bailout of Pacific Gas & Electric company, which has been blamed for some of the 2017 wildfires that tore through Northern California.
“Everybody’s getting protected, but customers,” said Michael Boccadoro, executive director of the Agricultural Energy Consumers Association. “Utility shareholders are protected. Trial attorneys are protected. Insurers are protected. Victims are protected. Labor’s protected. Unfortunately, they forgot to protect customers.”
Under the legislation, if an investor-owned utility changes ownership or files for bankruptcy, it would be prohibited from shedding workers or cutting pay for six months. For two years after that, it could only lay off workers after conducting a study showing the Public Utilities Commission that there would be “no reduction” in the ability to respond to emergencies or respond to mutual aid requests from other utilities.
The International Brotherhood of Electrical Workers worries wildfire lawsuits would drive PG&E into bankruptcy, threatening jobs and pensions for its thousands of union workers. Unions also worry that hedge funds take control of PG&E or Sempra Energy, the parent company of San Diego Gas & Electric and Southern California Gas Company, said Scott Wetch, a lobbyist for the Coalition of California Utility Employees, a union group.
“We want to make sure that if any of those hedge funds should seize control of either of those companies that the Gordon Geckos of the world won’t be allowed to chop up the companies,” Wetch said, alluding to the fictional character in Oliver Stone’s “Wall Street.”
The California State Association of Electrical Workers, an IBEW group, gave $1 million to the California Democratic Party last week, campaign finance records show.
Some of the measure’s most vocal opponents weren’t bothered by the labor provisions.
“They are people with families. Who can argue with that?” said Jamie Court, president of Consumer Watchdog. “The bailout is largely a corporate giveaway so at least workers got something.”
California courts have ruled that utilities are entirely liable for damage caused by power lines, even if they’ve followed all safety regulations. Lawmakers considered changing that standard but backed off amid a barrage of lobbying by wildfire victims and insurance companies.
Fire investigators have blamed PG&E equipment for 12 of last year’s wildfires in Northern California’s wine country, including two that killed 15 people combined. In eight, investigators said they found evidence of violations of state law and forwarded the findings to county prosecutors. Authorities have not determined fault for the Tubbs Fire, the most destructive in state history, which destroyed thousands of homes in Santa Rosa.
PG&E suspended dividends to shareholders and executives expect to pay billions in an eventual legal settlement.
Utilities regulators generally don’t let utilities bill their customers for the damage linked to imprudent management of electrical equipment, but the legislation lawmakers are considering would create a special process for the 2017 fires. It seeks to take as much as possible from PG&E’s investors without harming ratepayers, such as by trigger bankruptcy or downgrades in its credit rating.
For the rest, the Public Utilities Commission would have the option to let PG&E collect from customers through a line-item on utility bills for the next two decades.
The bill also would require utilities to harden their equipment so it’s less likely to cause fires. It would make it easier, in some circumstances, to do prescribed burns and clear dead trees and other brush that can fuel wildfires, and includes $200 million a year for those purposes.