Greensheets Staff Writer Maddy Orlando who wrote on California's "PG&E Bailout" billBy: Maddy Orlando

California seemingly cannot escape wildfires. Wildfires are to California what hurricanes are to Florida and tornadoes are to Texas. The Tubbs fire in 2017 broke the record for most destructive wildfire in California history, only for 2018’s Camp Fire to break that record one year later. In addition to being the most destructive wildfire, the Camp Fire is also California’s deadliest wildfire. Combined, California wildfires in 2017 and 2018 killed 139 people, destroyed communities, and changed the lives of tens of thousands of Californians. Rich Ellison, a longtime Paradise resident, explained the devastation the town felt after the fires: “Those people are gone and it can’t be replaced and that’s the sad part right there. They’ve lost everything.” There is an insurmountable amount of issues that result from a fire like the town of Paradise saw in November of 2018. However, the issue that’s kept most everyone’s attention is not the death toll or property destruction, but rather the impact these fires had on utility companies, mainly PG&E, which filed for bankruptcy in January 2019.

Fires are expensive. Fighting them is one part of the cost, but moving on from them is another. Fires destroy houses, cars, and property, and that does not even begin to account for the injuries and deaths to humans and animals. In California when a utility company’s infrastructure sparks a wildfire the company is required to pay for the destruction its infrastructure causes. Staring down the barrel of the billions of dollars of liabilities from recent wildfires, utility companies face real threats of insolvency. And despite the utilities’ questionable treatment of ratepayers, there is no question that the Legislature had to act or risk facing another serious energy crisis.

That is where AB 1054 comes in. The idea behind the bill is to help ratepayers by creating a wildfire fund that pools capital into one place that utilities like PG&E and Southern California Edison, if they act reasonably and according to government guidelines, can draw from to pay off the claims against them. This would provide quicker access to capital to pay off liabilities and, in turn, quicker relief to victims. It would also promote greater accountability and responsibility on behalf of the utilities by allowing access only with reasonable behavior.

AB 1054 sounds great on paper. But in reality, the bill just provides a cushion for the Legislature and electrical utilities to create better measures and practices for mitigating fire risk moving forward. One of the major critiques of the bill is its lack of requested accountability of the utility companies. In exchange for promises, the companies have access to the wildfire fund without much action on their behalf. For that reason, many people have dubbed the bill the “PG&E Bailout Bill”, as the bill seemingly saves PG&E’s assets by providing it with necessary funds to move forward without requiring specific actions in return. The funds are necessary because utility companies such as PG&E are vital parts of the state’s infrastructure. Without the health of these companies, the health of California’s infrastructure at large is put at risk.

The problem many people have with the bill is that, right now, it is just promises. And while the listed reforms and safety measures to ensure against future disaster for each utility to take sounds like the steps in the right direction, there is no way to know what steps they will actually take and what will work. The wildfire fund provides the necessary capital to be able to take those steps, but once the foundation is laid it is up to the companies to act upon that–something that scares many lawmakers.  Elected officials have warned that the 2017 and 2018 wildfires are the new normal. Californians would hope though that the buffer AB 1054 provides the Legislature and the utility companies would allow time for both parties to find time to implement meaningful change. That is one big if while many people hold their breath amidst another fire season.

You can subscribe to the In Session podcast and listen to my broader conversation about AB 1054 and related legislation with Thomas Gerhart on Apple Podcasts, Stitcher Radio, Spotify, or on your favorite podcast app.

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