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Battle centers on utilities' fire liability

John Myers, Los Angeles Times on

Published in News & Features

SACRAMENTO, Calif. -- California lawmakers who vowed to craft a plan to address the growing danger of wildfires this summer knew they'd spend a lot of time talking about life and death. Few may have known how much time they would spend talking about the survival of electric utility companies.

In public and private discussions at the state Capitol, a pitched battle is underway over how much slack the Legislature should -- or can -- provide for the state's utility companies facing liability under a strict standard they have been held to for more than a half-century. Industry representatives have warned that those rules, combined with the forecast of a hotter and drier California, mean that proactive fire policies won't be enough to prevent the kinds of costs that could lead to bankruptcy.

"Even if the utilities take all those actions, and even if they are without fault, they could nonetheless be held liable," Henry Weissman, an attorney representing Southern California Edison, said during legislative testimony Thursday.

As many as seven public hearings on the issue -- easily the most high-profile and heavily lobbied topic of the summer in Sacramento -- are expected to be held by the time the Legislature adjourns for the year on Aug. 31. Legislators are not required to change the rules governing utilities and the effects of wildfire, but those who support such efforts are working to instill a sense of urgency under the Capitol dome. Additional attention was drawn to their case this week by thick smoke from fires in Lake and Shasta counties that hung heavy over Sacramento, a poignant reminder of what scientists call the "new normal" for wildfires in California.

While each of the hearings convened so far was expected to focus on different ways for utilities to improve wildfire prevention, the sessions have all been drawn back to the thorny topic of legal liability. On Thursday, lawmakers discussed the merits of a proposal by California Gov. Jerry Brown to create a new standard for "inverse condemnation," the legal principle that governs billions of dollars in payments made by utility companies whose equipment contributed to sparking a fire.

If there were any legislators who supported Brown's plan, they didn't speak up. In particular, they criticized it for attempting to set a standard for a utility's actions without consensus on what a company's responsibility is in preventing its equipment from causing fires.

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"Who's to decide at this point, when there aren't any standards, what is and isn't negligent conduct?" state Sen. Hannah-Beth Jackson, a Democrat, asked.

California's current crop of deadly fires has not been linked to sparks caused by power lines or other equipment, attributed instead to a vehicle mishap and alleged arson, among other things. Last year's fires, however, saw a strong linkage to the utilities. Pacific Gas and Electric Co., which owned equipment that state officials blamed for multiple Northern California fires last year, has estimated liability costs of at least $2.5 billion. PG&E is also asking the Legislature for help borrowing money to cover those costs, which would be paid back over time.

Lawmakers were adamant in Thursday's hearing that they wouldn't do anything to push costs onto utility customers. Last year, state regulators refused a request by San Diego Gas & Electric Co. to recover some $379 million in fire costs from ratepayers.

"I'm particularly concerned about affecting the ratepayers with anything we do," Democratic Sen. Ben Hueso said.

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