sunny.png
Sunday December 8th, 2019 2:12PM

Judge keeps California law on utilities paying fire damages

By The Associated Press
Related Articles
  Contact Editor

SAN FRANCISCO (AP) — A federal bankruptcy court judge on Wednesday rejected Pacific Gas & Electric’s latest attempt to change a California law requiring utilities to pay for the devastation from wildfires ignited by their electrical equipment.

The decision issued by U.S. Bankruptcy Judge Dennis Montali preserves a long-standing principle known as “inverse condemnation.”

The century-old law helped drive the nation’s largest utility into bankruptcy protection 10 months ago as it faced at least $20 billion in losses stemming from a series of deadly and destructive wildfires in 2017 and 2018.

The ruling is a victory for thousands of people who lost their homes and loved ones in the fires, as well as insurers trying to recover part of the roughly $16 billion they have already paid their policyholders.

In addition to using bankruptcy to reorganize its finances, PG&E hoped the process would enable it to shed the burden of inverse condemnation.

But Montali pointed out that there is no evidence yet that PG&E would not be allowed to pass along its wildfire costs if it could show regulators that it had acted as a “prudent operator.” He said PG&E seemed to be “seeking a solution, fire cost reimbursement, in search of a problem.”

In a statement, PG&E expressed disappointment with Montali’s reasoning before sounding a conciliatory note.

“We understand and appreciate that there are diverse opinions on this subject,” the company said. “We look forward to being engaged in discussions on these important issues to all Californians.”

Although utilities never liked the concept of inverse condemnation, it wasn’t crippling until recently. That’s because California’s power regulators typically allowed profit-driven utilities to recoup their fire losses by raising their rates — effectively forcing their customers to bear the burden instead of their stockholders.

That changed two years ago when California’s Public Utilities Commission rejected a request from San Diego Gas & Electric to pass along losses from a past fire to its customers. Regulators had determined the utility’s negligence in protecting and upgrading its electrical system played a key role in the fires.

That raised the specter of California utilities having to shoulder all the costs of future wildfires at a time when the blazes are growing more frequent and destructive amid climate change.

The shift in the regulatory landscape has been even more jarring because PG&E and other utilities put off maintenance on aging electrical systems. Those past decisions can now be interpreted as poor management or outright negligence after PG&E’s power grid was linked to several fires that destroyed thousands of homes and killed dozens of people.

With utilities no longer assured of passing along wildfire costs through higher rates, investors began to demand higher interest rates for the companies to borrow money. That, in turn, threatened to make it too expensive for PG&E to pay for the work to make its system safer and more reliable, which would hurt its 5 million customers in the long run.

"PG&E continues to believe that imposing strict liability without regard to fault under inverse condemnation is a flawed legal doctrine and bad for our customers, our economy and our state," the company said after the ruling. 

PG&E also had tried to persuade the bankruptcy judge that the law was designed to serve as a “socialization of losses,” so it should always be allowed to recover its wildfire costs through higher rates.

During court hearings on the issue, Montali repeatedly questioned whether a federal bankruptcy judge should tinker with a liability standard that California lawmakers reviewed last summer and allowed to stand — underscoring it again in his written ruling.

PG&E could still appeal Montali’s decision but didn’t address whether it would in its initial statement.

Montali predicted the California Supreme Court also would spurn any attempt by the utility to skirt the law.

  • Associated Categories: U.S. News, Associated Press (AP), AP National News, Top U.S. News short headlines, AP Business, AP Business - Industries, AP Business - Utilities, AP Business - Small Business
© Copyright 2019 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Judge upholds charges that could put Weinstein away for life
A New York judge has rejected Harvey Weinstein’s bid to throw out the most serious charges in his sexual assault case
6:11PM ( 19 minutes ago )
5 dead, 3 hurt in ‘devastating’ Minneapolis high-rise fire
Five people have died after a fire broke out on the 14th floor of a public housing high-rise in a heavily immigrant neighborhood of Minneapolis
6:06PM ( 24 minutes ago )
Report: US lacked technology to track separated families
A report says the US government didn’t have the technology needed in 2018 to properly document and track thousands of immigrant families separated at the southern border
5:40PM ( 50 minutes ago )
U.S. News
Sticky impeachment trial questions: How long? Who testifies?
How a Senate impeachment trial of President Donald Trump would unfold is not yet known, but among the issues senators will have to decide are how long it lasts and whether witnesses are called
6:17PM ( 12 minutes ago )
‘A betrayal’: Malmo fury as Ibrahimovic invests in Hammarby
Zlatan Ibrahimovic’s legacy at boyhood Swedish team Malmo looks to be in tatters after he bought a stake of nearly 25% in one of its biggest rivals
5:32PM ( 58 minutes ago )
Falcons sign Meier for TE depth, list Jones as questionable
Falcons sign tight end Carson Meier, list wide receiver Julio Jones as questionable against Saints
5:29PM ( 1 hour ago )
Associated Press (AP)
Officials: Iraq protesters burn down Iran consulate in Najaf
Anti-government protesters burn down an Iranian consulate building in southern Iraq, while six protesters were killed by security forces who fired live rounds amid ongoing violence
3:19PM ( 3 hours ago )
Ruckelshaus, who defied Nixon in Watergate firing, dies
William Doyle Ruckelshaus, who famously quit his job in the Justice Department rather than carry out President Richard Nixon’s order to fire the special prosecutor investigating the Watergate scandal, has died
3:17PM ( 3 hours ago )
3 injured as Texas plant explosion releases chemical plume
A chemical company says three people were injured in an explosion at its plant in East Texas that blew out windows and sent a chemical plume blowing over homes miles away
3:12PM ( 3 hours ago )
AP National News
Modest gains drive US stock indexes to more record highs
Investors capped a day of light trading on Wall Street ahead of the Thanksgiving holiday by serving up another set of stock market record highs
4:46PM ( 1 hour ago )
Pope taps former Bank of Italy exec to head watchdog agency
Pope Francis has tapped a former Bank of Italy executive to take over the Vatican’s financial intelligence unit following a scandal that resulted in the Vatican being suspended from an international anti-money laundering network
2:17PM ( 4 hours ago )
Fed survey finds US economy expanding despite trade fallout
Fed survey finds economy expanding but manufacturers still dealing with trade war fallout
2:05PM ( 4 hours ago )
AP Business
Iran says protesters attacked hundreds of banks, blaming US
Iran says protesters angry over spiking government-set gasoline prices attacked hundreds of banks, police outposts and gas stations
1:06PM ( 5 hours ago )
6 protesters killed amid violence in Baghdad, south Iraq
Iraqi officials say 3 anti-government protesters were killed and 35 wounded by security forces in southern Iraq amid ongoing violence
10:01AM ( 8 hours ago )
Iran supreme leader claims protests a US-backed ‘conspiracy’
Iran’s supreme leader is claiming without evidence that recent protests across the Islamic Republic over government-set gasoline prices rising were part of a “conspiracy” involving the U.S.
9:14AM ( 9 hours ago )
AP Business - Industries
UN: ‘Quick wins’ needed to keep climate goals within reach
Top U.N. environment officials say countries have procrastinated for too long and should start making steep cuts in greenhouse gas emissions immediately, or risk missing agreed targets for limiting global warming
9:52AM ( 1 day ago )
Ukrainian leader says he discussed gas contract with Putin
Ukraine’s president says that he has discussed a new contract for natural gas supplies during his conversation with the Russian leader
7:57AM ( 1 day ago )
Trump and Bulgarian leader discuss energy, NATO
President Donald Trump and the prime minister of Bulgaria on Monday discussed energy issues facing the central European nation heavily dependent on Russian energy
6:51PM ( 1 day ago )
AP Business - Utilities
Blackouts hit Northern California again during fire danger
Pacific Gas & Electric has cut power to about 120,000 people in Northern California in a bid to prevent its equipment from sparking wildfires
9:47PM ( 6 days ago )
Divided US House committee backs pot decriminalization
A divided House panel has endorsed a proposal to decriminalize and tax marijuana at the federal level
7:20PM ( 6 days ago )
PG&E boss says it wasn’t fully ready for California outages
The CEO of the nation’s largest utility told California lawmakers that the company wasn’t as well prepared as it thought when it shut off power to millions of people last month
10:56PM ( 1 week ago )
AP Business - Small Business
Judge upholds charges that could put Weinstein away for life
A New York judge has rejected Harvey Weinstein’s bid to throw out the most serious charges in his sexual assault case
6:11PM ( 19 minutes ago )
5 dead, 3 hurt in ‘devastating’ Minneapolis high-rise fire
Five people have died after a fire broke out on the 14th floor of a public housing high-rise in a heavily immigrant neighborhood of Minneapolis
6:06PM ( 24 minutes ago )
Report: US lacked technology to track separated families
A report says the US government didn’t have the technology needed in 2018 to properly document and track thousands of immigrant families separated at the southern border
5:40PM ( 50 minutes ago )
Utah banning ‘conversion therapy’ with Mormon church backing
Backed by Mormon church, Utah set to become 19th state banning ‘conversion therapy’ used to try to change peoples’ sexual orientation or gender identity
5:25PM ( 1 hour ago )
Utah set to become 19th US state to ban ‘conversion therapy’
Utah set to become 19th state banning ‘conversion therapy’ used to try to change peoples’ sexual orientation or gender identity
5:09PM ( 1 hour ago )