California lawmakers are attempting to save utilities in the state by offering them a process to pass the costs of damages from wildfires onto customers.
California utilities are under pressure from dozens of lawsuits and hundreds of claimants after wildfires sparked by the utilities’ equipment and power lines ravaged the state’s forests and razed neighborhoods. Dozens of people died and tens of thousands of structures were damaged or destroyed by fires in 2017, The Wall Street Journal reports. (RELATED: California’s Wildfires Are The Costliest In US History, And The Price Tag Is Still Rising)
The California legislature sent a bill to Democratic Gov. Jerry Brown’s desk late Friday, and Brown is expected to sign it in the coming days. The bill lets utilities issue bonds that are then paid off by rate hikes on customers.
California utility PG&E serves roughly 16 million people and is expected to pay as much as $15 billion in damages from 2017’s wildfires. The utility’s insurance will cover less than $1 billion of that, according to TheWSJ.
Critics said the bill is rewarding utilities for failing to uphold strong safety standards.
“Without a doubt the cost of our changing climate will be a shared one,” Democrat Assemblyman Marc Levine said, according to The Associated Press. “But the costs we’re talking about here — the costs of negligence — should not fall primarily on ratepayers.”
While the bill will result in rate hikes on Californians, the new law will save rate-payers money over the long term by avoiding the costs associated with utilities filing for bankruptcy, the bill’s supporters argue.
“This is about protecting ratepayers, not helping utilities,” Democratic state Sen. Bill Dodd said, according to The AP. “The fact of the matter is ratepayers would be hurt in a utility bankruptcy.”
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