A complex plan to reform how the state and utilities pay for compensation when a utility sparks a wildfire that is racing through the state Legislature this week could give leverage to Camp Fire victims’ claims with Pacific Gas and Electric Corp.
The plan seeks to stabilize the state’s investor-owned utilities in light of mounting wildfire costs. Gov. Gavin Newsom first detailed the plan late last month. The legislation’s main thrust would set up a $21 billion victims’ compensation fund paid for by shareholders and ratepayers and require additional safety upgrades and monitoring.
On Wednesday, the bill cleared a 10-to-1 vote in a key committee in the state Assembly, where many lawmakers called the plan imperfect but a necessary step. After passing the state Senate on Tuesday, the plan could come up for a vote in the Assembly as soon as Thursday and become law by Friday.
The bill could speed compensation for victims with claims with PG&E because it would require the utility to wrap up its bankruptcy by June 30 of next year, said Patrick McCallum, a lobbyist for Up From the Ashes, a group of California wildfire victims and lawyers. McCallum said the bill could also help victims with claims get a bigger payout because helping utilities be more stable in the future could increase their value.
“This legislation is our best hope as victims for trying to be made whole for the losses that we suffered more quickly,” said McCallum, who was one of several people who lost homes in the North Bay and Camp Fires who made the trip to Sacramento to weigh in on the bill.
Some of the provisions in the bill have been stirring mounting opposition. Some have raised concerns that it would create a maze of bureaucracy without a guarantee that utilities will be able to avoid catastrophic wildfires.
“It is shockingly stacked in favor of Wall Street and the utilities, and it repeals the California Public Utilities Commission’s authority to question the companies’ claimed costs and past practices,” wrote Loretta Lynch, the former president of the California Public Utilities Commission, in an op-ed opposing the legislation on Wednesday.
The victims’ compensation fund would be made up of $10.5 billion paid by ratepayers through an existing surcharge on their bills that averages out to $2.50 a month and at least $10.5 billion from the shareholders of the utilities. The legislation would also require $5 billion in safety upgrades from the utilities, which they would be prohibited in profiting from.
It would also create a wildfire safety division within the California Public Utilities Commission, which must review the utilities’ fire safety plans, and a Wildfire Safety Advisory Board to focus on wildfire safety prevention.
“I’m still sort of weighing the pros and cons, but there are some significant pros,” said state Rep. James Gallagher, R-Yuba City. “Making sure that our victims get compensated obviously weighs heavily with me.”
One of his main concerns was that agricultural ratepayers would have to shoulder a higher surcharge on their bills to pay for the fund. Several agricultural and industrial associations expressed that concern in the legislature but stayed neutral on the bill.
The lone no vote on Wednesday came from State Rep. Phil Ting, who represents San Francisco. Officials in the city have expressed concern that the bill would prevent the city from buying up some of PG&E’s infrastructure, a plan under consideration.
