Senate Bill 819, authored by state Sen. Jerry Hill, would prohibit utilities from passing costs that result from the company’s negligence along to ratepayers in the form of higher monthly gas and electricity bills.
In recent months, PG&E has embarked on a crusade, led by Chief Executive Officer Geisha Williams, to pressure politicians in Sacramento to craft legislative packages that would ease the company’s financial exposure to lethal disasters such as the wildfires that torched Wine Country in October, as well as to pave a smoother path to shovel the financial costs onto ratepayers.
As the state legislative session staggers to a close Friday, Hill’s bill stands in stark contrast to SB 901, which was approved by a legislative conference committee Tuesday night. While Hill’s measure is designed to rein in PG&E rate hikes that are unjustified, the conference committee’s legislation has been pilloried as a “bailout” designed to primarily benefit PG&E.
“(Senate Bill) 819 protects consumers by saying that if a utility is negligent, the utility cannot recover its costs by passing them along to ratepayers,” Hill said Wednesday.
The state Senate on Tuesday approved Hill’s measure 39-0, and the state Assembly approved it Monday on a 79-0 vote. Next stop is Gov. Jerry Brown’s desk, unless SB 819 is blocked through procedural maneuvers.
Senate Bill 901, approved Tuesday on a 7-1 vote by the Conference Committee on Wildfire Preparedness and Response, is expected to be considered by both the Assembly and the Senate amid a last-minute torrent of legislation Friday.
“There is no question that the conference committee bill was written to benefit PG&E,” Hill said. “It’s a bailout for PG&E.”
At the heart of the criticism of SB 901 are last-minute changes in language that are said to be a major reward for PG&E, whose equipment was deemed to be the cause of a number of the lethal firestorms that roared through several parts of the North Bay in October.
The legislation orders the powerful state Public Utilities Commission to determine whether a utility can recover its costs and expenses arising from a destructive fire that occurred in 2017 — a narrowly worded provision that would include the Wine Country firestorms. When the PUC allows a utility such as PG&E to recover its costs, typically it is enabled through higher monthly bills.
“In an application by an electrical corporation to recover costs and expenses arising from, or incurred as a result of, a catastrophic wildfire with an ignition date in the 2017 calendar year, the PUC shall determine whether those costs and expenses are just and reasonable,” according to a passage in the plan the conference committee approved.
The conference committee’s SB 901 also would oblige the PUC to set up a “stress test” to determine whether PG&E and other big power companies are financially able to cover disaster-related costs. Anything above what a utility can pay would be dumped in the laps of customers.
“(Senate Bill 819) does not provide the comprehensive wildfire solution that the state needs,” Valerie Turella Vlahos, a PG&E state government relations manager, wrote in an Aug. 2 letter to the Assembly Appropriations Committee.
In January, several state lawmakers — prior to PG&E beginning a lobbying effort to protect its interests and keep the pathways clear to dump disaster-related costs onto consumers — offered support for SB 819.
A sampling of what some lawmakers said in January, a few months after the North Bay infernos:
“You don’t burn someone’s house down and then raise their rates to help pay for the damage you caused,” Sen. Scott Wiener, of San Francisco and San Mateo counties, said.
“Ratepayers should never be stuck with the bill if negligence is determined,” Assemblyman Marc Levine, of Marin and Sonoma counties, said.
“Thousands of North Bay residents have lost their homes and businesses and many escaped these devastating fires with nothing but the clothes on their backs and their family’s safety,” Sen. Mike McGuire, whose district includes parts of Sonoma and Marin counties, as well as the North Coast, said. “There is absolutely no way residents who are suffering from this massive tragedy should ever pay for a corporation’s potential negligence.”
Hill wondered aloud Wednesday whether legislative schemes might be used to prevent his approved bill from reaching the governor’s desk.
“The Legislature is often fickle,” he said. “We will see how conflicted the Legislature can be.”
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