State bails out of PG&E wildfire bailout

In July, the California state legislature considered a bill that would have granted state-sponsored bond money to PG&E in order to pay off potential damages from the 2017 wildfires—blazes that, according to Cal Fire, were started by the utility company’s equipment.

Now the San Francisco Chronicle reports that the bailout effort has burned out—at least for now—with State Sen. Bill Dodd of Napa telling the paper that the debate around the bill is simply too complicated and it won’t be coming to a vote this session.

The original bill, AB 33, came by way of Hayward Assemblymember Bill Quirk, who overhauled an old 2016 bill with entirely new content that would have provided PG&E some relief on fire-related debts.

Quirk’s bill argued that the utility’s liability was so great that it threatened to cause larger problems for the state as a whole:

The magnitude of potential damage claims undermines Pacific Gas and Electric Company’s ability to invest in the infrastructure necessary to meet the state’s aggressive wildfire mitigation and clean energy plans and has the potential to create an unsustainable hardship for customers if passed on in the form of higher rates through the typical ratemaking processes.

The potential liabilities and uncertainties surrounding the timing and extent of cost recovery create an imminent threat to the utility’s financial stability and ability to cost effectively carry out its public service mission.

Photo by Mario Tama/Getty Images

A few weeks later, Gov. Jerry Brown offered a similar proposal, although Brown’s pitch specified that it would not retroactively apply to 2017 fires and only cover fires started after January 1, 2018.

Earlier this year, a pair of Cal Fire investigations concluded that 16 of the state’s wildfires in 2017 were caused by power lines or power poles operated by PG&E. Some of the largest fires are still under investigation.

While these findings do not necessarily mean that the utility as criminally negligent, it exposes PG&E to potentially soaring penalties. Notably, California law holds that PG&E may end up paying for fire damages related to its equipment even in cases where the company itself did nothing wrong.

Though the fire bill appears to have been fully contained for now, there is the possibility it will break out again in the future, particularly if PG&E does end up facing a large fire bill.

• Lawmakers Drop Bid To Change Liability [Chronicle]
• State Considers Fire Bailout [Curbed SF]
• Jerry Brown Wildfire Proposal
• Cal Fire Investigation