Utilities call for a closer look at the state’s approach to “inverse condemnation”
SACRAMENTO—The California wildfires of 2017 had a devastating impact on homes, businesses, land and infrastructure. That impact extended even to the state’s utilities, bringing them potentially dire financial consequences.
Chris Holden, chair of the Assembly Utilities and Energy Committee of the California Public Utilities Commission, said lawmakers are attempting to understand the “intersect of fire safety and [the] utility infrastructure.” They also are attempting to clarify the legal distinction between “causation” and “negligence,” because California law treats investor-owned utilities, or IOUs, as part of the cause of fires when utility infrastructure is involved—regardless of whether or not there was negligence.
IOU executives, including Sempra Energy CEO Debra Reed, reported being hopeful that the state will begin addressing the problem, noting that the recent hearings on the situation indicated “an urgency to resolve the legal issue of inverse condemnation and a recognition that there are several factors involved in the causes of fires. It is irrational to blame all of that strictly on the utilities.”
Reed was encouraged by a call for state legislative attorneys to review the legal principle of inverse condemnation and how it applies to the state’s IOUs.
She is not alone. Sempra and Pacific Gas and Electric Company, along with Edison International, are engaged in multipronged strategies to address the current application of inverse condemnation in the courts.
For some, that cannot happen quickly enough. The implication of the utilities’ vulnerability to blame is approaching a full-blown crisis that demands attention, according to Jim Patterson, vice chair of the utilities and energy committee.
While others stop short of using the word “crisis,” many believe the time has come to develop more reasonable solutions in the aftermath of wildfires.