“I’ve yet to hear PG&E talk about safety,” state Sen. Hannah-Beth Jackson, D-Santa Barbara, said in a frustrated tone Thursday while officials from other major utilities were testifying. “You’re talking about stabilizing the market.”
Dodd, who represents thousands of survivors from October’s blazes, said no one on the panel wants to absolve PG&E from paying for damage from fires attributed to utility negligence.
But consideration must be given to easing the current policy, called inverse condemnation, that holds utilities responsible for paying damages even when they have done nothing wrong, he said.
“It’s not about bailing out PG&E,” Dodd said in an interview Friday. The strict liability policy could prove “unsustainable for ratepayers,” he said, asserting that it could cause PG&E’s credit rating to fall, increasing the utility’s cost of acquiring capital, which would ultimately be passed on to ratepayers.
PG&E’s financial condition is “a legitimate concern that needs to be looked at by unbiased people,” Dodd said.
PG&E was excluded from the witness list at last week’s hearing, Dodd said at the time, because “from my point of view they had an ax to grind.”
Cal Fire has determined that PG&E’s equipment ignited 16 major fires across Northern California in October, and alleged the utility violated state code by failing to keep tree limbs clear from its equipment in 11 of the fires. The fire agency forwarded its findings to local district attorneys for potential prosecution.
“Yesterday’s laws will not protect us from tomorrow’s devastating wildfires,” Lynsey Paulo, a PG&E spokeswoman, said in an email.
The utility supports “comprehensive reform” that compensates wildfire victims, minimizes financial impacts on customers, protects PG&E’s ability to invest in wildfire prevention and climate resilience and “holds energy companies accountable if they don’t meet the state’s high safety standards,” she said.
Wood said he was not ready to drop the idea of adjusting the liability rules, but said he had not seen any such proposal “that could possibly keep fire victims whole.”
The governor’s proposal to ease inverse condemnation rules — a step adamantly opposed by insurance companies, trial lawyers, local government officials and utility watchdogs — would not apply to last year’s fires.
But Napa County Supervisor Diane Dillon, who testified before the committee last week, called the governor’s proposal “a very radical policy change.” Speaking for the California State Association of Counties, which lobbies for local governments, Dillon said the group believes the proposal is unconstitutional.
Rex Frazier, president of the Personal Insurance Federation of California, said changing liability policy “would lead to more fires” and would be tied up “in grinding litigation for years.”
John Fiske, an attorney representing Santa Rosa, Sonoma County and other cities and counties in litigation against PG&E, said the legal battle would last for years “and the committee will have done nothing to advance the ball.”
Some of their assertions appeared to be backed by a new opinion from the Legislative Counsel Bureau, a nonpartisan state agency, that said lawmakers can neither amend the state Constitution nor interpret it “in a manner that conflicts with a judicial construction.”
Fiske said that directly applies to inverse condemnation, which is rooted in both the Constitution and court rulings.