A state bill aimed at making big utilities' power equipment cause fewer fires, the Utility Infrastructure Safety, Reliability and Accountability Act, SB1088, sponsored by Sen. Bill Dodd (D-Napa) would change the long-standing practice of determining negligence. The Center supports the legislation. We support the legislation because California needs more wildfire prevention programs and activities. Moreover, the current state of affairs leaves utilities open to bankruptcy due to payouts for wildfire damages. Prevention is worth a pound of cure.
Some of California’s worst fires have been ignited by power lines owned by investor-owned utilities. The companies can be liable for millions or even billions of dollars in damages for lost lives, homes and businesses. When the utility is found to be negligent -- like failing to replace rotting poles or securing lines -- ratepayers are protected from paying the uninsured costs. That burden falls on shareholders and company profits.
The bill would require the state Office of Emergency Services to set new fire safety criteria for investor-owned utilities to meet. Utilities would have to submit a plan to the California Public Utilities Commission every other year describing how they would make their equipment less likely to start wildfires.
The utilities would be allowed to pass the cost of the safety improvements in their plans directly to ratepayers. Currently, costs for safety improvements are calculated every three years during lengthy rate-paying procedures before the PUC.
Under the bill, utilities that comply with their plan would be deemed by the PUC to have performed in a prudent manner. That finding means the PUC could not find the utility negligent if its equipment caused a fire. And the cost of utility-caused fires in those cases would be passed on to ratepayers.
The bill passed through the Senate Committee on Government Organization Tuesday. It must still clear the Appropriations Committee, the full Senate and Assembly before it can be put before the governor to be signed into law.
The bill affects only the ability of the state PUC to find that a utility was prudent or negligent. It does not directly affect individuals who sue an investor-owned utility contending that its equipment started a fire and that the utility was negligent. However, that finding before the PUC that a utility had acted prudently because it followed its fire safety plan might influence a jury in the utility's favor. (KPCC, 4/25/2018)