Governor releases wildfire and PG&E plan that could raise monthly power bills

April 12-- Apr. 12--A series of proposals unveiled Friday by Gov. Gavin Newsom to ward of catastrophic wildfires could raise monthly utility bills, make insurance premiums most costly, slash payments to wildfire victims and hold PG&E responsible for providing safe power services.

The governor also raised the specter of a break up, or government agency takeover, of PG&E if the company fails to deliver electricity and gas in a safe and reliable fashion.

"PG&E hasn't been a good actor," the governor said during a news conference to discuss his proposals. "I'm not here to beat them up. But the state has suffered from their neglect and misdirection."

Among the potentially controversial proposals: creation of a wildfire fund "to spread the cost of catastrophic wildfires more broadly among stakeholders" -- a proposal that some skeptics believe could mutate into a bailout of the disgraced utility.

The proposal quickly raised warning flags with Consumer Watchdog, a harsh critic of PG&E, state politicians, and the state Public Utilities Commission, which has been lambasted for ineffective oversight of the state's largest utility.

"The problem with a catastrophic wildfire fund is who pays for it," said Jamie Court, president of Consumer Watchdog. "Utility ratepayers and state taxpayers may be stuck with the bill."

The governor made it clear many groups could be tapped to help fill the coffers of such a fund, including ratepayers, insurance agencies and utility company shareholders.

"Who is going to pay for this? Everybody wants someone else to pay for this. The person behind the curtain is supposed to pay for this," Newsom said. "We are all in this together. We all have responsibilities for this effort."

Reaction from Wall Street was positive: Shares of PG&E rocketed 20.7 percent higher and closed at $23.08 on Friday.

The governor also called for reform of inverse condemnation, a legal doctrine that can be used to hold PG&E and other major power companies in the state strictly liable if their equipment was a substantial cause of a fire, even if the utility followed established inspection and safety rules.

This sort of reform could ease the financial liabilities that PG&E and other utilities might face in the wake of a wildfire that involved their equipment.

The governor's report explained that "utilities (would) pay for damage if caused by their misconduct," under his proposal.

PG&E toppled into bankruptcy on Jan. 29, listing $51.69 billion in debts, hoping to ward off a forbidding mountain of liabilities and wildfire-linked claims following lethal infernos in Northern California in 2015, 2017 and 2018 that were caused by, or directly associated with, PG&E's equipment.

"We look forward to continuing to work with our regulators, policymakers and the Commission on Catastrophic Wildfire Cost and Recovery to examine a range of solutions," PG&E said Friday in a prepared release.

Consumer Watchdog warned that ordinary residents and utility customers in California are being excluded from meaningful input regarding the governor's proposals.

"The utilities have given over $14 million to this crop of public officials in Sacramento, including the governor," Court said. "Big money buys big ears in Sacramento. Consumers, ratepayers, wildfire victims don't give big money and they need to be fairly represented."

Newsom urged the state Legislature to act by July 12 -- roughly 90 days from now -- to approve a package of measures to enact his proposals.

The governor also noted that reform of the state PUC is "long overdue."

The Utility Reform Network, or TURN, said "ratepayers should not pay a penny for wildfire damages" and there should be "no bailouts" for PG&E or any other big utilities in California, as a result of any legislation. TURN also pressed lawmakers to craft measures to force shareholders to pay a fair share for wildfire mitigation as well as all damages due to negligence.

The governor made it clear that PG&E -- already a convicted felon for crimes it committed before and after a fatal explosion in San Bruno -- must drastically change its approach to safe and affordable delivery of gas and electricity services.

"All options with PG&E are on the table," Gov. Newsom said. "If they get in the way of doing the right thing, all options are on the table with PG&E."

The options include a municipal takeover of all or part of PG&E operations, division of PG&E service territories into smaller regional markets, restructuring PG&E so it must focus solely on transmission and distribution, or reorganization of PG&E as a completely new company devoted to it public mission of safe delivery of light and heating.

"We are watching," Newsom said. "I expect PG&E to get serious, to no longer misdirect, manipulate and mislead the people of California."

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