What to Expect from the Passing of Governor Newsom’s Wildfire Utility Bill Law

Posted on September 18, 2019

In the wake of the ongoing lawsuit against Pacific Gas & Electric (PG&E) as a result of the 2018 Paradise/Camp fire, California Governor Gavin Newsom has enacted a utility bill law that could benefit victims of wildfires and alleviate financial burdens for utility companies.

The objective of the bill, which passed on July 12, is to create a $21 billion fund in order to pay out claims for future California fires (past victims are not eligible for money), and avoid utility bankruptcies, as is the current case for PG&E. When credit rating agencies on Wall Street warned that utility companies – namely SoCal Edison and San Diego Gas & Electric – may follow PG&E into bankruptcy, legislators formulated a plan where utility shareholders and ratepayers would equally split the costs to establish the fund.

Before utilities can tap into the fund to pay claims, they will be required to achieve a safety certification by tying executive compensation to safety performance, creating safety committees on their boards and implementing wildfire mitigation strategies before fire season begins. Utility customers will contribute to their $10.5 billion portion via the continuation of a $2 monthly charge, which has already been in place since the 2000 energy crisis and was set to expire in 2020.

For those affected by future fires, this bill may be a step toward financial healing and provide some measure of comfort that utility companies are being pushed to make safety improvements. While it’s difficult to determine now whether the bill will achieve its intended goals, it is setting an important precedent for how victims can move forward after disasters and addressing the increased risk of wildfires in California.

If you have been impacted by the 2018 wildfires, the attorneys at McNicholas & McNicholas, LLP can help. Call 310-474-1582 or go to www.mcnicholaslaw.com to request a free consultation today.

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