A lawsuit filed in a San Francisco federal court aims to strike down a new California law that helps utility companies cover the cost of wildfire damages.
It’s being argued that Assembly Bill 1054, which was signed by Governor Gavin Newsom, is unconstitutional because money is being taken away from power customers without due process. The bill would establish a $21 billion Wildfire Fund to help utility companies pay the claims of future wildfire victims.
The initial money for the fund would come from both ratepayers and utility companies. Critics claim that the legislation is nothing more than a “bailout” for utility companies.
Newsom argues that the law will move the state “toward a safer, affordable and reliable energy future” while providing certainty to future wildfire victims.
PG&E has been deemed responsible for sparking wildfires in 2017 and 2018 that killed 107 people, including the state’s deadliest wildfire: Camp Fire.
PG&E is currently serving five years of probation for six federal felonies for causing and covering up the cause of the deadly San Bruno gas pipeline explosion in 2010 which killed eight people.
News of the federal lawsuit comes as PG&E is proposing to raise utility rates by $1 billion next year. The company claims that more than half of the rate hike will be spent on wildfire safety.
Meanwhile, two PG&E customers filed a separate lawsuit challenging the state’s “Wildfire Fund” law.
Critics of the legislation argue against certain provisions in the law are unfair to ratepayers and taxpayers. One such provision makes it more difficult to prove that utility companies were negligent when their equipment triggers a wildfire. It also allows the utility companies that meet safety standards to pass the costs of wildfires to customers through rate increases. Third parties must provide substantial evidence that of “serious doubt” that a utility company acted reasonably in preventing a wildfire.