It’s extremely rare for California’s big utility companies to spend many millions of dollars on a lobbying effort – and lose.
That very nearly happened last summer to Pacific Gas & Electric Co., Southern California Edison Co. and the San Diego Gas & Electric Co., which spent a combined total of more than $10 million dollars over the last year trying to have their way with state legislators, mainly over the issue of liability levels when their equipment causes wildfires.
But not to worry… the utilities eventually got almost precisely the bailout they wanted.
Under previous law, even when power lines and transformers were well maintained and brush cleared to satisfy safety standards, utilities could be forced to pay for damages when it was determined their equipment caused fires to break out.
The lobbying flurry began in late 2017, after the state’s Public Utilities Commission diverged from its longstanding pattern of caving in to utility demands and handed down its most consumer-friendly decision in several decades.
That unanimous ruling by the five commissioners may force SDG&E and not its customers to pay more than $379 million in uninsured costs from the 2007 Witch, Guejito and Rice fires that devastated large parts of San Diego County, destroying more than 1,100 homes and killing two persons. Prior to those huge fires, authorities found, SDG&E failed to maintain its equipment properly and did not adequately trim tree branches and chaparral near power lines, which caught fire when the power lines arced and sparked in high winds.
Even now, 11 years after those fires, SDG&E is still in court trying to fob its liability costs off onto customers, ironically including some whose homes burned in the same fires.
The late-2017 PUC decision came as hundreds of lawsuits were being filed against PG&E and Edison for their alleged responsibility in the start of the huge Wine Country and Thomas fires that ravaged cities like Santa Rosa, Calistoga, Montecito and Ventura last year.
Those companies do not want even to think about the possibility of a repeat of the utility commission’s ruling against SDG&E. So they enlisted Gov. Jerry Brown, whose sister has collected more than $1 million as a board member of SDG&E’s parent company, to help push for new liability rules shifting much of their obligation to insurance companies and individual homeowners who had nothing to do with starting those fires.
The rationale for such a gift to the privately-owned utilities was that the new fire dangers caused by climate change and the dead trees it helps kill might drive the companies into bankruptcy and endanger California’s electricity supply.
If there ever was much danger to the utilities, it no longer exists. Because even after their initial bailout bill failed, the companies’ second effort measure passed in the dying hours of the legislative session and Brown quickly signed it.
This new law, known as SB 901, will let the utilities dun customers for much of their fire-related liability, even when they are clearly culpable. All it will take to authorize this is a vote by the PUC, which almost always favors utilities over consumers. Had the bill not passed, SDG&E said, the unusual 2017 PUC decision could have had “severe adverse practical consequences for privately owned utilities” and might cause “ripple effects throughout the state’s economy.”
Of course, that ignored the “ripple effects” that will follow if utility customers in San Diego County and elsewhere are now forced to pay off all the uninsured legal claims filed against utilities from the 2017 fires, which burned hundreds of thousands of acres and thousands of homes.
But the new law won’t cover the 2007 fires. If an appeals court accepts SDG&E’s challenge to its liabilities from them, bet on PG&E and Edison participating as they also renew their effort to avoid paying for damage their equipment has caused.
The desperation the companies felt after losing their first legislative round was an emotion very unfamiliar to them, as they’ve always previously been favored by both regulators and state legislators. But those companies really had nothing to worry about. Now only a generally sympathetic regulatory panel stands between them and billions of dollars’ worth of aid from their customers.
Email Thomas Elias at email@example.com. His book, “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” is now available in a soft cover fourth edition. For more Elias columns, go to www.californiafocus.net