EDITORIAL: PG&E lacks credibility to make wildfire demands

July 28--Wildfires aren't the only "new normal" in California.

PG&E is at it again, doing everything possible to shirk responsibility for its role in future disasters. CEO Geisha Williams on Thursday had the audacity to say that Gov. Jerry Brown's new plan to deal with the wildfire liability issue isn't good enough.

She's right that the proposal issued by the governor on Wednesday needs work -- but only because it threatens to let PG&E off the hook for the utility's shortcomings at the expense of California ratepayers and property owners. The Legislature should be cautious about rushing to make reforms on an extremely complex issue before its session ends at the end of August, especially because the current liability laws largely are working.

As for Williams, she should be more worried about getting her own house in order, starting by taking a hard look in the mirror. PG&E has a well-deserved reputation as the least-trusted utility in California, if not the nation. It is a convicted felon for its negligence in the 2010 San Bruno gas pipeline disaster. CalFire already has blamed PG&E for 12 of the catastrophic Wine Country fires in October and has raised the possibility of criminal prosecution in connection with the blazes. PG&E's demands deserve the same sort of respect the Legislature would give a convicted burglar arguing theft laws are too harsh.

Let's not forget that Williams was made PG&E's CEO because of her expertise in electricity operations and to help the utility put the deadly San Bruno disaster behind it. Or that in the same year as the Wine Country fires, her pay package was doubled from just over $4 million in 2016 to $8.5 million. Six of nine other top executives also received total compensation increases in 2017.

That same year PG&E failed to take the basic step of purchasing enough insurance coverage to cover the utility's potential liability for the 2017 Wine Country wildfires.

The governor and legislative leaders have convened a special committee to examine financial responsibility for future fires. At a minimum, the Legislature should have an independent auditor examine PG&E's books to determine the validity of Williams' claim that maintaining the status quo threatens to throw PG&E into bankruptcy.

The committee should be especially cautious about PG&E's desire to replace the state's legal standard governing liability, known as "inverse condemnation." Under current law, if the utility is negligent in maintaining power lines and poles, shareholders must foot the bill. And, under inverse condemnation, the utility is still liable for damages caused by its equipment when it is not negligent, but it can pass those costs on to ratepayers.

The theory is that utilities hold that responsibility because they can place their equipment anywhere it deems appropriate, even if it means invoking eminent domain to gain land from property owners.

Any changes to the law must ensure that California property owners are adequately protected. The fear is that if the inverse condemnation standard goes away, insurers will hike property owners' rates or decline to offer fire insurance in high-risk areas altogether.

PG&E has a long history of playing power politics in an effort to pad its bottom line. The Legislature should not make any alterations to wildfire liability laws until it has taken the time to do a full investigation of the impact on California property owners.

___

(c)2018 the San Jose Mercury News (San Jose, Calif.)

Visit the San Jose Mercury News (San Jose, Calif.) at www.mercurynews.com

Distributed by Tribune Content Agency, LLC.