Gov. Newsome signing AB 1054, July 12, 2019 (Photo – Office of the Governor)
Despite facing significant legal challenges, including multiple lawsuits and questions about potential liability over the Eaton Fire, Southern California Edison (SCE) is protected under a 2019 California law that shields utilities from full liability in wildfire cases.
By John Boucher
The law in question is Assembly Bill 1054 (AB 1054), which was passed in 2019. What exactly is AB 1054?
In 2019, California lawmakers passed a bill aimed at reforming the way the state addresses wildfire damage caused by utility companies. The bill, AB 1054, was passed with a 63-10 vote in the Assembly and signed into law by Governor Gavin Newsom. It established a fund of up to $21 billion to cover damages from fires caused by utility equipment, with the goal of providing greater financial stability for wildfire survivors.
Under the bill, investor-owned utilities must contribute $7.5 billion to the fund in order to access the full $21 billion. Ratepayers also are required to contribute $10.5 billion through an extension of a fee that was set to expire in 2020. Utilities can tap into the fund if a fire they caused results in over $1 billion in property damage, but they must repay the fund if found negligent in their equipment maintenance.
The bill also included several safety provisions, such as $5 billion in infrastructure improvements and an annual safety certification overseen by a new California Public Utilities Commission (CPUC) Wildfire Safety Division. Additionally, it mandates that Pacific Gas and Electric (PG&E) fully exit bankruptcy before receiving reimbursement.
The bill faced criticism at the time from some lawmakers, particularly in the Bay Area, and also from watchdog groups who argue that it favors utility companies at the expense of survivors. They contend that it shifts the burden of proof onto those affected by the fires. A July 11 article in The New York Times featured the headline: “California Lawmakers Give Utilities a Backstop on Wildfire Liability.”
Food & Water Watch criticized the bill, claiming that Governor Newsom and legislators rushed it through the Legislature without sufficient public input. “Moving faster than a wildfire across the Sierra Nevada, the Legislature and Governor Newsom pushed this bill through before the public knew what hit them,” said Alexandra Nagy, California director of Food & Water Watch, in a written statement on July 11, 2019.
Despite the opposition, Governor Newsom signed the bill into law on July 12, 2019. He stated that it provides certainty for wildfire survivors and helps California move forward with both wildfire prevention and its clean energy goals.
The cause of the Eaton Fire is still under investigation.
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