Customer bills could skyrocket if Legislature doesn’t fix wildfire liability

Pacific Gas & Electric Co. employees work to fix downed power lines burned by wildfires in Santa Rosa in October 2017.
Pacific Gas & Electric Co. employees work to fix downed power lines burned by wildfires in Santa Rosa in October 2017. Bloomberg

Mark Toney of The Utility Reform Network asserts that customer bills could increase due to what happens at the state Capitol over the next few weeks. This claim is correct, but not in the way that Toney would have you believe (“Legislature should put consumers first, not PG&E,” Viewpoints, Aug. 8).

In the past 10 months, wildfires have gone from a seasonal occurrence to a year-round threat. Last year, the 281,000-acre Thomas Fire became the largest wildfire in California history. Less than eight months later, the Mendocino Complex Fire eclipsed that frightening total, consuming nearly 300,000 acres in only 10 days.

Climate-driven wildfires are rapidly becoming more frequent, more intense and more destructive. But California’s liability laws haven’t kept pace.

Utilities are held strictly liable for damages related to their equipment, even when they have followed all safety and compliance rules. And the state presumes that these costs will be passed on to all customers.

Expecting ratepayers to bear the costs of wildfires when the utility was not negligent will result in unsustainable bills, while threatening our ability to invest in a resilient and clean energy future.

Toney’s suggestion that the state should establish a wildfire risk pool like the California Earthquake Authority acknowledges that having electric customers serve as the insurer of last resort is bad policy.

Keeping this broken status quo will result in higher electric bills even if damage costs aren’t passed along to customers. Without reform, PG&E customers could see as much as $2 billion in annual rate increases due to higher financing costs and insurance premiums. This translates to roughly 2.5 cents per kilowatt-hour, or $150 a year for the average user.

California’s electric customers should be front of mind in any legislative solution, which is why PG&E has been pursuing reform of these broken liability laws. The status quo is bad for customers, communities and our state’s energy future.

Tim Fitzpatrick is chief communications officer at Pacific Gas & Electric Co. He can be contacted at tim.fitzpatrick@pge.com.