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Ratepayer Lawsuit Claims New Wildfire Fund Law Unconstitutional

Residences leveled by the Camp Fire line a cul-de-sac in Paradise, Calif., No...

Photo by Noah Berger AP

Above: Residences leveled by the Camp Fire line a cul-de-sac in Paradise, Calif., Nov. 2018.

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Gov. Gavin Newsom says the law is needed to protect consumers from skyrocketing wildfire costs. Former City Attorney Michael Aguirre calls it an unlawful gift of public funds.

Aired: July 22, 2019 | Transcript

Former San Diego City Attorney Michael Aguirre, who now represents consumers in cases against power companies, filed a federal lawsuit Friday claiming a new state law that protects utilities from wildfire costs is unconstitutional.

The law was pushed by Gov. Gavin Newsom and passed by the state legislature last week. It creates new multi-billion-dollar funds with fees paid by utility customers that San Diego Gas & Electric and other utilities can tap to pay for wildfire costs.

Newsom says the fund is needed to keep the utilities from going bankrupt after big wildfires and protect ratepayers from skyrocketing costs.

In January, Pacific Gas and Electric, California’s largest utility, filed for bankruptcy protection. The company is facing tens of billions of dollars in potential liability because its equipment could have caused some of the state's most devastating wildfires in recent years, including last November's Camp Fire, which killed more than 80 people and destroyed the town of Paradise in Butte County.

“The rise in catastrophic wildfires fueled by climate change is a direct threat to Californians," Newsom said in a statement following the law's passage. "Strengthening our state’s wildfire prevention, preparedness and mitigation efforts will continue to be a top priority for my administration."

The suit, filed by Aguirre and his partner Maria C. Severson in U.S. District Court in San Francisco, calls the law an unlawful gift of public funds that violates both the U.S. and California constitutions.

"[The law] violates the due process rights of electric utility customers, would impose unjust and unreasonable rates upon them ... and authorizes unlawful gifts of public funds," Aguirre and Severson said in a statement sent to media outlets.

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