Tuesday, June 12, 2018

California utilities try to limit their liability for wildfires, many of which are caused by power lines

Policymakers nationwide, especially in California, are struggling to figure out who should be responsible for damages from natural disasters like wildfires and flooding.

"The National Flood Insurance Program, for instance, has been struggling financially for years, in part because of political pressure to keep premiums low even in places that repeatedly flood, such as the hurricane-prone Gulf Coast and the beach towns of Long Island," Sophie Quinton reports for Stateline, a news service of the Pew Charitable Trusts.

Meanwhile, California electrical utilities might have to pay billions of dollars in damages if state investigators rule that last year's wildfires were caused by flammable materials coming into contact with power lines, and could theoretically be responsible for such damages in the future, Quinton reports.

The state Department of Insurance has recorded claims worth almost $12 billion from last year's October and December wildfires, which were likely caused by power lines. State investigators found that four fires in northern Sacramento were caused when trees came into contact with Pacific Gas & Electric power lines, and that in three of those cases, the power company hadn't trimmed trees back far enough from its equipment, Quinton reports.

California utilities and the Brotherhood of Electrical Workers Local 1245 "are frantically lobbying Golden State officials for relief from a system that the utilities say is unfair: They’re liable when their equipment ignites a fire, but they can’t automatically pass on the costs to consumers," Quinton reports. That could bankrupt companies like Pacific Gas. But wildfire victims and ratepayer advocates say the system is fine as is, and gives utilities an incentive to trim nearby trees and invest in infrastructure.

The problem has been more or less unique to California, since no other state has both the same utility policies and tendency toward huge, destructive fires. But as climate change triggers more powerful wildfires and flooding, it may become an issue in other states.

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