Michael Shaw

Legislatures wildfire fix lands on the backs of ratepayers

By Michael Shaw, VP, Government Relations

Capitol Update, Sept. 4, 2018 Share this on FacebookTweet thisEmail this to a friend


Dodd


When the North Bay Fires ripped through communities destroying thousands of acres and homes resulting in the deaths of dozens of residents and first responders, the blame quickly fell on PG&E and weather conditions that compose the 'new normal'. Reports from CalFire later verified that in many of the fires PG&E equipment was a substantial cause of the blaze. 

During the final hours of the 2017-18 legislative session, the Legislature passed SB 901 by Senator Bill Dodd that was the result of a two-month long conference committee process involving legislators from both houses. The committee held several hearings at the end of which legislation was presented to the conferees and the public moments before the committee voted on the final product. 

SB 901 includes the following provisions:

  • Imposes a new charge on California ratepayers to cover an estimated PG&E liability of $5-15 billion for the 2017 wildfires;
  • Changes California Public Utility Commission (CPUC) rules regarding the apportionment of liability costs to allow an easier pass through of costs to ratepayers; and 
  • Directs $1 billion in Greenhouse Gas Reduction Fund (GGRF) revenue over five years into a program to reduce the risk of massive wildfires.

Under the bill, California manufacturers will face new costs associated with a bailout of PG&E for 2017 through a new nonbypassable charge that applies to all ratepayers within the service territory of the utility. In the future, the CPUC will consider the impact of changing weather conditions and the utility’s behavior and past actions in order to determine how much of the liability will be paid by the utility or be passed along to ratepayers. 

CMTA and a coalition of agricultural, industrial and residential ratepayers led the opposition to SB 901 and averted more severe consequences. The bill is headed to the Governor’s desk where he must sign or veto the bill by the end of September. If Governor Jerry Brown signs SB 901, ratepayers will be forced to bailout a utility and expose them to further costs down the road. 

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