Washington Post (Aug. 4, 2018)

As wildfires rage, California frets over a future of greater perils and higher costs

Smoke from the Carr Fire hovers over Northern California, including the state capitol, Sacramento, providing a dramatic backdrop for one of the most consequential policy debates in years — about who should pay for the growing number of increasingly destructive fires, now and in a hotter, drier future.

The election-year debate reflects a change in focus, from the long-term to the immediate, for a state that has been at the leading edge of environmental regulation. As wildfires become a year-round threat, California is moving to change long-standing laws to address the emergency of climate change, with the interests of those fighting, suffering from and paying for the fires in the balance.

The question before state lawmakers is whether public utilities should remain “strictly liable” for damage from fires that start because of their equipment, even if the utilities are not negligent. The largest utility, Pacific Gas and Electric, faces costs that could reach $12 billion for its role in last year’s deadly Northern California fires. Company officials say they cannot continue to afford the escalating payouts.

Insurance companies are fighting any change, given that costs will be theirs alone if utilities escape future liability for fires caused by their equipment. The Carr Fire, which was sparked by a malfunctioning vehicle, is a case in point. The insurance companies will pay for that damage. ...

In a statement this week, the group Stop the Utility Bailout said that the “threats of bankruptcy are merely scare tactics designed to distract from the real issue, which is PG&E’s abject failure to invest in safety upgrades that could have prevented the wildfires,” an assertion the company rejects.

THE QUESTION BEFORE STATE LAWMAKERS IS WHETHER PUBLIC UTILITIES SHOULD REMAIN “STRICTLY LIABLE” FOR DAMAGE FROM FIRES THAT START BECAUSE OF THEIR EQUIPMENT...
— Washington Post, August 4, 2018