Wildfire liability changes head into California law and onto your electric bill

by Steve Blum • , , , ,

It’s up to the California Public Utilities Commission now to decide whether your electric bill will include billions of dollars worth of damage done by wildfires. Governor Jerry Brown signed senate bill 901 on Friday. Among other things, SB 901 allows privately owned electric utilities to raise prices to offset damage payouts due to fires that were, to one degree or another, their fault.

Utilities – electric and telecoms – have the right to plant and use poles along roads and waterways in California, with very few restrictions and no rental fees at all. The downside is that Californian law says that, in exchange, they face strict liability for any damage caused. Even if they’re only partly to blame, they pay the full tab.

With damage estimates from the past two years of monster wildfires climbing into the tens of billions of dollars range, and a growing pile of evidence linking electric lines to the blazes, fears of bankruptcy grew. One solution considered during legislative negotiations over the summer was to soften the strict liability doctrine and allow damages to be spread over any and all who might bear some of the blame for wildland disasters.

Those talks didn’t produce a result, so lawmakers went for Plan B: loosen regulations that restrict how electric utility damage payments are split between shareholders and customers, and let the CPUC decide who pays what. SB 901 was passed in the final hours of the legislative session, and now governor Brown has blessed it.

The deal doesn’t do much for telecoms companies. They set their own rates, without oversight by the CPUC. Telephone companies, particularly AT&T and Frontier Communications, will decide for themselves how to manage wildfire risks, to both their service lines and their bottom line. One solution, which doesn’t bode well for rural Californians, is to rip out copper infrastructure and replace it with low capacity wireless facilities. California lawmakers rejected an effort to streamline that process in 2016. It’s a reasonable bet to think it’ll be back on the table next year.