Pushed by first-year Gov. Gavin Newsom to act before their summer recess, California legislators on Thursday passed a more comprehensive approach to providing citizens and major electricity providers protection against the devastating physical and financial impacts of wildfires. Newsom signed the bill Friday morning.
Assembly Bill (AB 1054) is a complicated, multi-billion dollar measure that emerged from Newsom’s promotion of his strike team recommendations. The legislative proposal shot through two committees and a state Senate floor vote.
Assemblymember Chris Holden, an author of the bill and chair of the Utilities and Energy Committee, said the legislation is “a durable solution to the problems arising from utility caused wildfires in California with no increase in electric rates for customers. “We are in the new frontier and want to ensure that victims are quickly taken care of, that rate payers are stabilized, and utilities are solvent in order to be able to keep the lights on for all Californians.”
Newsom said lawmakers took “thoughtful and decisive action to move our state toward a safer, affordable and reliable energy future.”
Provisions include a $21 billion wildfire recovery fund for victims of future fires, excluding the 2018 Woolsey and Camp fires, which would be supported by ratepayers and utility shareholders. Utility executive pay raises would be tied to safety results.
The bill also would create a wildfire safety division within the California Public Utilities Commission (CPUC) and a wildfire safety advisory board for prevention work. New standards are to be adopted to determine utility negligence that are aligned with national criteria.
What the legislation does not do is eliminate the use of inverse condemnation, which holds utilities liable even when no negligence is determined.
Holden said “all efforts also are being considered to protect the fiscal stability of the power utilities. We at the legislature will continue working on solutions to the ongoing problems that we continue to face due to the impacts of climate change.”
Bankruptcy-bound Pacific Gas and Electric Co. spokesperson James Noonan said the combination utility “appreciated” the legislation and said the management team remains “focused on supporting our customers and communities impacted by the wildfires and helping them recover and rebuild.”
Southern California Edison Co. spokesperson David Song expressed similar support for the bill and legislators’ “focus on catastrophic wildfire cost recovery.” The action would improve the current state regulatory framework, he said.
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