California lawmakers pave path for higher electricity, gas bills

April 18--State legislation that might protect PG&E and other utility monopolies from an array of liabilities in the wake of disasters such as a fatal gas explosion in San Bruno or a lethal inferno in Wine Country gained an initial approval Tuesday -- but only after a torrent of critics forced its author to promise to modify the proposed law.

The bill would oblige California utilities to submit proposals every two years to the state Public Utilities Commission that detail how power companies would prepare for huge disasters such as destructive fires, storms and earthquakes.

The proposal, SB 1088, has emerged months after infernos roared through Wine Country and nearby regions in October, killing 44, destroying 8,900 structures, and causing $9.4 billion in estimated insurance losses. State investigators are attempting to determine the cause of the wildfires, including whether PG&E's equipment or systems might have been involved in the blazes.

However, critics of the legislation described the bill as a "get out of jail free card" for PG&E and other utilities because they believe the bill would pave a smoother path for higher utility bills and create a safe harbor for utilities that seek to escape financial liability when their equipment or systems are deemed to be the cause of a disaster.

"If the PUC determines that a utility has done everything it is supposed to, then they can't be held liable or responsible for a incident if they are found to be in substantial compliance, however that is supposed to be defined," state Sen. Jerry Hill, D-San Mateo, said in an interview with this news organization Tuesday.

SB 1088, written by state Sen. Bill Dodd, D-Napa, would require PG&E and other major utilities to file safety-related updates with the state PUC.

The updates would include safety, reliability and resilience plans to mitigate risk from wildfires and other major events that can cause disasters and affect the safety and reliability of gas and electricity systems. The PUC would be obliged to review the safety plans, according to Dodd's bill, which on Tuesday gained the support of the Senate Energy, Utilities and Communications Committee.

"As written, the bill gives utilities a get out of jail free card for all civil liability simply because a utility was in substantial compliance with some obscure and yet to be determined PUC utility plan," the Consumer Attorneys of California wrote in an a letter released ahead of the state panel's hearing.

Other consumer groups also opposed the legislation, which would next be heard by a Senate committee led by Dodd.

One of the major problems, warned The Utility Reform Network: The bill paves a smoother path for jumps in utility bills, since a utility such as PG&E could bundle a rate request with its safety report to the PUC.

"Rather than enhancing safety, SB 1088 would reduce current energy utility incentives to operate their systems safely and prudently and would effectively grant the utilities a blank check to burden ratepayers with unnecessary and excessive costs, without any meaningful review of utility requests for steep rate hikes," warned Mark Toney, TURN's executive director.

Jolted by the criticism, Dodd pledged to amend the legislation.

Hill, however, voted against the legislation because he believes no tinkering will remove the flaws that could degrade safety, shelter utility monopolies and enable rate increases to occur more readily.

Hill noted that in the wake of a deadly explosion in San Bruno that killed eight, strict procedures were set in place that pressured PG&E to upgrade its gas system. PG&E is now a convicted felon after being sentenced for crimes it committed before and after the San Bruno blast.

"It's wrong to put safety into rate cases at all," Hill said. "PG&E now has a safer gas system model that was forced upon it."

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