Aug. 30, 2018

After a heated debate at the State Capitol Tuesday night, a key legislative committee amended SB 901 (Dodd) to address forest management, fire prevention, funding, utility debt management and cost recovery, among other items.

CSAC is supportive of the deal and appreciative of the joint Conference Committee on Wildfire Prevention’s work to come to an agreement. We are advocating for support of the measure as we believe it will protect counties and victims of fires, stabilize rates, and keep our utilities fiscally sound. The bill will move to both houses of the Legislature for a vote on Friday.

“This legislation makes significant progress toward minimizing the risk of future wildfires in California. SB 901 provides a solution that protects victims, enhances the safety of our communities, and ensures stability for utilities and ratepayers. It’s a prime example of what can be accomplished when we work together to find solutions to the major issues facing our state,” stated Graham Knaus, CSAC Executive Director. “We applaud the Conference Committee for crafting this comprehensive package and taking this bold step forward in wildfire prevention and safety.”

Key elements of the package include:

• Legal Protections: No changes to inverse condemnation.
• Funding: $1 billion over the next five years from the Greenhouse Gas Reduction Fund (GGRF) for improved forest management and fire prevention programs.
• Mutual Aid & Improved Utility Safety Plans: Allows for the advanced placement of firefighting resources and increased safety standards and planning requirements for utilities.
• Forest Management and Regulatory Streamlining: A comprehensive streamlining of regulations for landscape and forestry management practices that will enhance and support fire-prevention activities such as thinning, prescribed burns and fuel reduction on federal lands.
• 2017 Wildfire Cost Sharing: The bill does not change the current reasonableness standard for cost recovery at the PUC. It will require utilities to pay for negligent behavior, to the extent they can afford to do so without impacting ratepayers or their ability to provide service. The bill includes a financial stress test to determine how much debt shareholders can afford, before any impact to ratepayers will be determined. The bill also allows utilities to bond out their liability debt, minimizing ratepayer costs by spreading out repayment over long periods of time; helping to keep utilities financially solvent.
• Future Wildfire Cost Recovery: For fires after January 2019, utilities would have their share of fault determined by the PUC using a number of factors, including climate. The PUC may allow utilities to recover costs from ratepayers if its actions in managing its systems were considered reasonable, but does not require them to do so.
• Executive Compensation: Restricts executive compensation to be derived from shareholders, not ratepayers.
• Commission on Wildfire Cost Recovery: Creates a commission in the Governor’s Office of Planning and Research to consider methods of socializing the costs from wildfires.

For a more detailed write up of SB 901 click here.