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California passes $26 billion plan to deal with wildfire threats

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A costly $26 billion proposal to deal with the state’s ongoing wildfire threats is heading to Gov. Gavin Newsom.

Newsom, who had worked with lawmakers behind the scenes to pass a comprehensive plan ahead of a month-long summer recess, is expected to sign the bill Friday.

Under the plan, utility companies would need to pay $5 billion in order to access a fund of up to $21 billion, with PG&E contributing the greatest share of the burden.

If San Diego Gas & Electric and Edison agree to participate, costs for the $21 billion going into the fund would be evenly shared between California’s largest investor-owned utility companies and ratepayers. A new panel called the California Catastrophe Council would run the fund.

A $2.50 surcharge added onto customers’ bills after the 2001 energy crisis was set to expire in 2020. The plan lawmakers approved Thursday morning extends the fee for another 15 years, giving them cover to claim they aren’t raising rates.

In a statement, Newsom praised lawmakers for moving the bill onto his desk.

“I want to thank the Legislature for taking thoughtful and decisive action to move our state toward a safer, affordable and reliable energy future, provide certainty for wildfire victims and continue California’s progress toward meeting our clean energy goals,” Newsom wrote. “The rise in catastrophic wildfires fueled by climate change is a direct threat to Californians. Strengthening our state’s wildfire prevention, preparedness and mitigation efforts will continue to be a top priority for my administration and our work with the Legislature.”

Republicans from rural, fire-prone districts joined Democrats in supporting the measure.

Assemblyman James Gallagher, R-Yuba City, blamed PG&E for putting lawamkers in a difficult position after the company declared bankruptcy in January. While he said he was torn, he ultimately decided to back the plan.

“Many rooting for this bill to fail want to see the government take over PG&E,” Gallagher said on the Assembly floor on Thursday. “If there’s anything worse than big business, it’s big government.”

But not everyone was on board with the wildfire plan.

Assemblyman Marc Levine, D-Greenbrae, opposed the bill, expressing worries it may shift the burdens of future wildfire liability costs away from utilities.

Under the current system, companies must prove they manage their equipment properly. Assembly Bill 1054 shifts the burden of proof, requiring others to show the utilities acted recklessly.

Others have expressed concerns that the plan doesn’t offer immediate compensation to wildfire victims. Rather, it sets a deadline for PG&E to exit bankruptcy and pay victims by June 2020.

Up from the Ashes — an advocacy group representing wildfire victims — supported the proposal and said it’d offer a more concrete timetable for victims to get reimbursed for the losses they had incurred.

“With fire season fast approaching, and so many victims still struggling, putting AB 1054’s protections into practive quickly is going to make a tremendous difference,” said Patrick McCallum, co-president of the organization and victim of the 2017 Tubbs Fire victim. “It’s our best hope going forward.”

Assemblyman Jim Wood, D-Santa Rosa, supported the bill, though he and a few of his colleagues from both parties sent Newsom a letter last month asking for more money to prevent fires from breaking out in the first place. Woods had a bill that called for $1 billion to fireproof homes, but that funding was later stripped from his proposal in amendments.

Assemblyman Chad Mayes, R-Yucca Valley, co-authored the proposal. Moments before the vote was taken, he acknowledged its flaws but explained why his colleagues needed to support it.

“This bill is not perfect, but is the best we all could come up with,” Mayes said. “It’s a work of compromise and collaboration. It was Republicans and Democrats working together.”

Supporters like Senate leader Toni Atkins say immediate action is necessary, especially amid threats from credit ratings agencies to downgrade some utilities in the state to junk bond status.

“Doing nothing is not an option. Not only for those communities that would find themselves devastated by wildfires, but for all Californians,” Atkins said in a statement. “Without action, we would face a number of untenable scenarios including rate increases, disruptions with power delivery and major uncertainty for victims of the 2017 and 2018 fires.”

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Bryan Anderson is a political reporter for The Bee. He covers the California Legislature and reports on wildfires and transportation. He also hosts The Bee’s “California Nation” podcast.
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