California Utility Companies Fighting to Change Wildfire Liability Law

state laws

California has been subjected to devastating wildfires as of late and local utility companies are fighting to have a change made in state laws regarding liability from wildfire damage. Unfortunately, it doesn’t look like any changes are going to be made any time soon.

Pacific Gas and Electric (PGandE) is California’s biggest utility owner. The company has been asking lawmakers to change the state rules regarding collecting compensation. Currently the state laws, known as “inverse condemnation”, state that property owners have the right to collect compensation from utilities linked to fires whether or not the company was negligent. As of right now, utility companies could be facing billions in liabilities for last year’s fires, even though the damages were caused by the wildfires. PGandE could end up facing $17 billion in liabilities.

In hopes of helping utility companies, Governor Jerry Brown proposed a bill that would make it so the courts had to decide whether or not a utility acted “reasonably” when making the decision of imposing damages.

Brown’s proposal is being evaluated by a conference committee in order to try to move forward with producing state legislation regarding wildfires. While this proposal is being discussed, there are also other negotiations regarding utilities and their responsibilities under wildfires.

Negotiations are focusing on not only reducing the risk of wildfires but to also address utilities’ financial stability when it comes to these situations. Utility companies hope for the law to take a closer look at whether or not their equipment is truly to blame for the property damages sustained.

While it’s bad more than 200 years since the Constitution was first created, Americans are constantly trying to improve laws, both federal laws and state regulations. Fortunately for utility companies in California, there are plenty of supporters for changing this regulation. However, insurers, cities, ratepayer groups, trial lawyers, and the agricultural, oil, and manufacturing industries are opposed to making changes to this law.

And although ongoing discussions regarding this law are taking place, many lawmakers are saying this discussion should be deferred to later on. Utility companies may be facing bankruptcy if this law remains as is and hope for positive changes sooner rather than later.