California Governor Jerry Brown has signed a bill on Friday that allows utilities to bill their customers for future legal settlements related to the 2017 wildfires, even if the company’s mismanagement is to blame.
The aim of the bill is to prevent the company, Pacific Gas & Electric Co., from going bankrupt. Pacific Gas & Electric Co., the nation’s largest utility by revenue, faces billions of dollars in liability if investigators determine their equipment was the cause of the Tubbs Fire.
The Tubbs Fire killed 22 people, destroyed thousands of homes last year and caused more than $10 billion in insured losses.
Opponents of the bill say the legislation is a bailout for the utility company.
The bill would create a special process for the 2017 wildfires. The goal is to determine how much liability the company can absorb without severe consequences, such as bankruptcy. The additional cost would be billed to consumers.
For future wildfires, the bill allows the Public Utilities Commission to consider a range of factors, including evidence of mismanagement, weather conditions, and the utility’s efforts to prevent wildfires.
The bill is one of more than two dozen signed by Brown to lower the risk of wildfires, including efforts that make it easier to conduct controlled burns that would clear out dry vegetation.
Currently, Pacific Gas & Electric Co. is facing dozens of lawsuits from insurers, which have spent billions of dollars on settling homeowner insurance claims.
Courts have already ruled that utilities are wholly responsible for the damage caused by their equipment, even if the company followed all safety precautions.
If the utility is blamed for the fires, the costs will be passed down to customers and will appear as a surcharge on monthly bills for the next 20 years. The cost of the surcharge is still unknown.