Bill Would Bar Utility Companies From Raising Rates For Fire Cost

SACRAMENTO, CA -- State lawmakers on Wednesday introduced a bill they said will prohibit electric companies from pushing costs from major disasters, such as wildfires, onto ratepayers. Authors of the bill said they were prompted to write the proposed law after companies tried to recover costs in the past.

The bill, authored by Sens. Jerry Hill, Ben Allen, Bill Dodd, Mike McGuire and Scott Wiener and Assemblymen Marc Levine and Jim Wood, comes as California recovers from the worst wildfire season on record.

While the cause of those fires is still being investigated, several legislators want to ensure that the electric utilities serving California cannot recover the costs that result from the utilities’ negligent practices by raising rates for customers, lawmakers said.

“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,” Hill (D-San Mateo) said. “Victims of devastating fires and other tragedies, and ratepayers in general, should not be forced to pay for the mistakes made by utilities.”

McGuire, whose district was devasted by the October wildfires, said "there is absolutely no way residents who are suffering from this massive tragedy should ever pay for a corporation's potential negligence."

Before ratepayers bear any cost incurred by a utility, the California Public Utilities Commission is required to evaluate whether those costs are just and reasonable. The bill would provide the commission with full authority to apply a reasonableness review to electric utilities’ requests for cost recovery.

The bill also clarifies that fines, penalties, or uninsured expenses resulting from negligent behavior are not recoverable in rates.

Gas companies are already prevented from shifting the burden of fines and penalties onto customers as a result of legislation by then-Assemblyman Hill in response to the PG&E gas pipeline explosion that leveled a San Bruno neighborhood in 2010. The legislation, Assembly Bill 56, was approved by the governor in 2011.

--Photo of Capitol building in Sacramento via Pixbaby/sarangib