California Governor Signs Wildfire Bill To Pay Victims

Speaker 1: 00:00 Governor Gavin Newsome signed new legislation that creates a $21 billion fund that power companies can use to pay for wildfire damage their equipment may cause, but where will the money come from to support this fund? Half of it comes from the utility companies and the other half from rate payers. The governor also hired a new utilities commission president. All of its signaling, a shift in how the state handles wildfire liability. Rob [inaudible] energy reporter from the San Diego Union Tribune has been covering the story and joins us with more. Rob, welcome. Thank you. How significant is the new law when it comes to how the state and utilities respond to the ongoing threat of wildfires? This is a pretty significant piece of legislation for a couple of reasons. First of all, as you mentioned, they've got big fun $21 billion that a utility companies can tap into. Also, it's not covered quite as much. Speaker 1: 00:55 Not hasn't been. It hasn't been covered quite as much, but the utilities also have an option to, uh, to draw 10 point $5 billion as a line of credit if their insurance doesn't cover the costs of a, of a utility related wildfire. Uh, but they, they, they have either option to choose either the $21 billion fund or the 10 point $5 billion line of credit and most people think they're going to opt for the $21 billion fund. Cause I was gonna ask, is $21 billion enough PG and e filed for bankruptcy citing 30 billion in damages? That's a very good question. And that's something that even the sponsors of the legislation have admitted that that's an unknown. The thinking behind or part of the thinking behind this legislation is that by enhancing fire wildfire mitigation measures from the utility companies that maybe we won't have as many devastating fires in California if the utilities step up their game, so to speak, especially civic gas and electric, which, uh, w w has been tied to the campfire, which was the most devastating fire. Speaker 1: 02:01 And that occurred last year. Talk to me more about where the money will come from. 10.5 billion of the, of the 21 billion, half of it will come from the utilities themselves. The other 10.5 billion will come from rate payers who, what what they've done in the legislation is there was a bond that was going to be about the set to expire, that utility customers have been paying for a long time, number of years, um, of $2 and 50 cents per month. And that was going to expire. But now with this passage passage of assembly bill 10 54, they're going to extend that. That's where the 10 point $5 billion from ratepayers is going to come from them. So rate payers won't notice a difference on their bill, right? Yeah. And you never know. I mean, this, this legislation is aimed for what's gonna come next, what's, it doesn't really address the previous wildfires. Part of that was addressed last year by assembly bill nine oh one which addressed wildfires from 2017. So going forward, the thought is that this bill will help alleviate utility rate payer heartburn in the future. Speaker 2: 03:12 But another thinking on this, a, you know, critics may say this legislation passes wildfire liability onto rate payers rather than the actual utility companies. Um, why should rate payers pay for wildfire liability? So the utilities don't go bankrupt? Speaker 1: 03:27 Well, the argument is, and it has some merit, is that rate payers and also utilities are kind of intertwined. You know, you really can't separate one from the other. And in addition to that, we've had so many devastating wildfires in the last couple of years. There's a third party that's involved in this intertwined, so to speak, and that's the victims of wildfires. And if you're a victim of a wildfire from PG knee service territory like the campfire last year, you haven't gotten any kind of financial relief because PG and e declared bankruptcy. Part of what the supporters of this bill say is, what's very important about this bill is that PGNE cannot take part in this $21 billion fund until they settle their bankruptcy filing by June of next year. So the thought is that a big part of this legislation will help get money into the hands of wildfire victims in an accelerated rate. Speaker 2: 04:24 And can you talk about some of the other requirements these utilities will have to go through in order to access those funds? Speaker 1: 04:29 Well, one of the most significant is that Oh, utility executive pay and compensation will be tied to their wildfire mitigation efforts. So it's all, this is from the proponent standpoint, this legislation, even though it's big and it's complicated as a mixture of carrots and six so to speak. So utilities can be more responsible and that utility and rate payers who are already on the hook and pain a lot of money, we'll be paying less of our, or at least have shoulder less of a burden than they have in the last couple of years. Speaker 2: 05:02 The governor just introduced this proposal last month. Why was there such a rush to get this done? Speaker 1: 05:07 Well, and it did. It went through in at warp speed. The bill in its expanded version was introduced last Monday. By Thursday, it had passed both houses of the legislature and on Friday morning the governor signed it. So when we went through very quickly now the governor and proponents of the bill say, well yes, it didn't go through very quickly, uh, this specific bill, but the state and law makers had been talking about wild fire legislation for literally years. This goes back to the previous governor, Jerry Brown and governor Noosa Medis news conference on Friday, said wildfire has been at the forefront of law makers minds for going on for a couple of years now at least. Speaker 2: 05:54 And you know, there have also been some personnel changes at the California Public Utilities Commission. Tell us about the new president and what the change means for the CPEC. Speaker 1: 06:01 Yes. On Friday the governor announced that he's going to nominate Mary Bell Baxter, who right now is the secretary of government operations. Uh, that's an agency that administers state operations for things like procurement, real estate information technology and human resources. She's got a lot of governmental experience. Uh, and she will be nominated. She has to be confirmed by the state Senate, but that's considered to be pretty much a done deal. Speaker 2: 06:26 All right. I've been speaking with rob, Nick Galeski, energy reporter at the San Diego Union Tribune. Rob, thanks so much for joining us. Thank you. Speaker 3: 06:37 [inaudible] wow. [inaudible].