PG&E Climbs as California Lawmaker Plans Fire Relief Bill

(Bloomberg) -- PG&E Corp. rose after a California lawmaker requested a bill to help the state’s largest utility absorb liabilities from this year’s fatal wildfires.

Kellie Smith, an adviser to assemblyman Chris Holden, said she is drafting legislation that could be introduced as early as Dec. 3. It may serve as a framework for lawmakers to consider relief for PG&E from the billions of dollars it faces in potential liability for death and property damage in Northern California’s Camp Fire, the deadliest in state history.

“He is concerned about the instability of the utility and the adverse effect it could have on ratepayers, and the ability to deliver services at a reasonable cost,” Smith said by telephone Monday.

Holden, who helped shepherd a bill that passed earlier this year to help California utilities cope with wildfire costs, was out of the country and unavailable for comment on the pending legislation.

Other proposals may also emerge, and Michael Picker, president of the agency that regulates the giant utility, has publicly raised the possibility it may consider breaking up the company.

The blaze, about 150 miles (240 kilometers) northeast of San Francisco, has consumed about 151,000 acres, destroyed thousands of homes and commercial buildings and killed at least 79 people, with about 700 missing. Damages may exceed $15 billion, according to Citigroup Inc. The fire was 70 percent contained as of late Monday, according to the California Department of Forestry and Fire Protection.

Northern California is forecast to get as much as 7 inches (18 centimeters) of rain this week, which will help tamp down the blaze and clear smoke that’s been poisoning air across Northern California. But the showers may also trigger floods and mudslides.

In response to deadly fires in 2017, lawmakers approved a legislative package that allows PG&E to sell bonds backed by customers to cover liabilities. It also gave utilities a mechanism for recovering some wildfire costs starting next year, so long as the fires weren’t caused by company negligence. There were no provisions for 2018 blazes.

Utility Relief

That package came out of a special committee convened by Governor Jerry Brown and legislative leaders of both houses to address wildfires and utilities. Under California law, utilities can be held liable for costs if their equipment is found to have caused a fire -- regardless of whether they followed safety rules.

Brown had pushed a proposal that would have given utilities relief from the rule, which was opposed by insurance companies, trial lawyers and fire victims. Holden was named as the co-chairman of the committee that held hearings on the matter and ultimately didn’t act on that provision.
Why California Wildfires Put Heat on Power Companies: QuickTake

Brown had pushed a proposal that would have given utilities relief from the rule, which was opposed by insurance companies, trial lawyers and fire victims. Holden was named as the co-chairman of the committee that held hearings on the matter and ultimately didn’t act on that provision.

Smith said Holden’s new bill may likely extend the securitization provisions of that legislation, known as SB901, to 2018.

Bloomberg News had previously reported that California policy makers are informally weighing legislation that would let PG&E sell bonds to cover any possible liabilities.