PG&E spent $1.7 million on lobbying over three months this year as the utility pressured California officials to reduce its legal liability for wildfire property damages.
The San Francisco company dished out more money from April through June than it spent to influence state leaders in all of 2017, according to state filings. Southern California Edison also reported spending $900,000 and Sempra Energy disclosed $502,000 in lobbying payments during the quarter.
The lobbying surges took place as the utility companies urged Gov. Jerry Brown and state legislators to rethink how the state pays for damages from massive wildfires. For the year, Pacific Gas and Electric Co. has spent $2.2 million.
PG&E said it specifically spent $1.1 million on advocacy related to wildfire proposals in the Legislature in a note added to its state filing. The company said lobbying costs are paid “with shareholders funds, not customer dollars.” PG&E has been running an advertising campaign this year to inform customers about precautionary measures it takes to prevent wildfires.
“Years of drought, extreme heat and 129 million dead trees have created a new normal in California and we must continue to adapt to these challenges,” PG&E said in a statement. “This is the biggest issue facing our company today — and a major challenge for everyone living in California…”
A utility is automatically responsible for providing compensation if a property is damaged by its equipment under existing law, regardless of whether investigators prove the company behaved negligently.
Brown released a proposal last week that would alter the law and lessen a utility’s legal responsibility for wildfire damages. The changes require courts to assess whether a utility acted reasonably and in compliance with fire mitigation plans before determining financial liability. Brown’s plan would apply to property damages from the wildfires raging across the state this year and in the future.
PG&E said energy companies will continue to be susceptible to massive uninsurable risk unless the law changes and Brown’s proposal moves forward. The company reported a nearly $1 billion quarterly loss due to wildfire claims last week.
PG&E claims Brown’s plan doesn’t go far enough. The company wants only be held liable for damages if they behaved negligently to cause the fires that turned entire neighborhoods into ash in 2017.
California Department of Forestry and Fire Protection investigators blamed PG&E for 12 of the October blazes, but hasn’t issued a report yet on the Tubbs Fire near Santa Rosa. Insurance officials estimate that PG&E’s liability could total more than $10 billion.
The insurance industry opposes PG&E’s requests.
If a utility did not cause a fire, it can typically pass off its financial liability to its customers by increasing rates. Brown’s proposal would shift some of the financial burden to homeowners’ insurance companies. Insurance associations have said the industry would likely raise premiums or decline coverage for residents in high fire-prone areas as a result.
The Personal Insurance Federation of California spent $253,000 lobbying in the April-to-June quarter. The Property Casualty Insurers Association of America disclosed $194,000 in lobbying payments.
Up from the Ashes, a coalition of trial lawyers and victims of wildfires on the opposite side of PG&E, spent $564,00 in the quarter as well.
PG&E’s quarterly lobbying payments included $508,000 for work categorized as “consultants and government relations” to the Munger, Tolles and Olson law firm based in Los Angeles. PG&E paid the firm of Brown political consultant Ace Smith, SCN Public Relations, $396,000 for public affairs.
The utility also reported lesser payments to several well-connected Sacramento lobbying firms: Platinum Advisors, Campbell Strategy & Advocacy, Sloat Higgins Jensen & Associates and Capitol Advocacy.