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IIABCal Joins Efforts To Stop The Utility Bailout In California

SACRAMENTO, CA, July 26, 2018 --  IIABCal this week joined wildfire survivors, consumer advocates and local government leaders to urged lawmakers to resist pressure from electric utilities to reverse existing wildfire liability laws that would give them a free pass on paying for the damage and destruction resulting from wildfires started by their powerlines.

IIABCal participated in a teleconference this week in advance of the Legislature’s first hearing of the Wildfire Preparedness and Response Conference Committee.

Under current California law, the shareholders and owners of the electric utilities are responsible for paying the cost of damage resulting from wildfires caused by their electric power lines.

Utility companies in California want to change that law and make ratepayers and consumers pay for fires they cause. The utilities’ proposal shields Wall Street investors who own the utilities from financial responsibility, even though they are making billions of dollars a year in profits.

IIABCal Lobbyist John Norwood said any changes in subrogation, as a result of the proposed bill, will likely result in a homeowners' insurance availability crisis in urban and rural areas.

“Liability laws exist for good reason — providing a constitutional right for utility victims to recover loss,” said Patrick McCallum, co-chair of Up from the Ashes. “And in doing so, they provide an incentive for utilities to act safely and responsibly. This is absolutely essential in helping prevent future fires.”

Governor Brown released a proposal for the Wildfire and Preparedness Conference Committee that included language that would essentially eliminate existing financial liability laws.

“By weakening long-standing liability standards, this proposal sends a message that bailing out the utilities is a higher priority than supporting the recovery of wildfire survivors,” said Jeremy Merz, vice president of the western region, American Insurance Association. “By offloading utilities’ liabilities onto the back of homeowners, costs for rebuilding get shifted from the responsible party to those whose lives and property were ravaged by fires.”

“When utilities start wildfires, they and their shareholders and executives should be held responsible, not homeowners, local governments and businesses who suffer the impacts of these fires,” said Calaveras County

Supervisor Jack Garamendi said, “The best way to make sure utilities put safety first is to hold them responsible for fires they cause.”

“The Governor’s proposal is an improper bail out for investor owned utilities at the expense of those communities most affected by utility-caused wildfires,” says John Fiske, attorney representing local government. “In light of climate change, we must maintain those standards that work towards prevention.”

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