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Lawmakers seek to stop utilities from pushing disaster costs on customers

'The practice is an outrage'

Reuters

A helicopter drops water on a wildfire in the San Gabriel mountains as it attacks the flames near Duarte, Calif., in June.
Reuters A helicopter drops water on a wildfire in the San Gabriel mountains as it attacks the flames near Duarte, Calif., in June.

Several California state lawmakers have introduced legislation to ensure that the state’s big utilities can’t saddle customers with higher rates if the utility has been negligent in connection with disasters such as wildfires.

The lawmakers are alarmed by proposals from Pacific Gas and Electric and other power companies to pass through to customers costs linked to the Wine Country fires and other disastrous blazes.

Investigators have yet to determine what caused the North Bay fires. But lawmakers want to ensure that the electric utilities serving California can’t raise rates to recover costs from any practices found negligent.

“The practice is an outrage and it’s time to stop allowing utilities to push the burden of their negligence onto the backs of customers,” state Sen. Jerry Hill, a longtime PG&E critic, said in a statement.

San Francisco-based PG&E said Wednesday that it faces the prospect of being obliged to pay for the property damage and attorneys fees connected with the North Bay fires if it is determined that the utility’s equipment played a substantial role in the fires — even if PG&E followed rules for equipment maintenance.

PG&E said changes are needed in that method, known as inverse condemnation, and its application to utilities.

PG&E believes inverse condemnation imperils the financial health of the state’s big power companies.

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“Allowing essentially unlimited liability undermines the financial health of the state’s utilities discourages investment in California and has the potential to materially impact the ability of utilities to access the capital markets to fund utility operations,” PG&E said.

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