By Jason Fordney

The California State Senate passed legislation Wednesday that would allow the state’s investor-owned utilities to pass through the costs of wildfires to ratepayers if they conform with safety plans approved by the Public Utilities Commission.

SB 1088, introduced by Sen. Bill Dodd (D), would require electric and gas utilities beginning in 2019 to submit annual safety, reliability and resilience plans, which the commission could approve “with or without modification” within 18 months.

If a utility is in compliance with its plan, “the utility’s performance, operations, management and investments addressed in the plan may be deemed reasonable and prudent for purposes of any subsequent CPUC proceeding and are prohibited from affecting any civil action and any previous events.”

Dodd said that “by mandating that utilities meet new safety, reliability and resiliency requirements, we can avoid these catastrophic fires before they start.” He introduced the legislation in April. (See Calif. Legislation Shields Utilities from Wildfire Costs.)

The bill passed the Senate on Wednesday on a 34-2 vote with three legislators not voting, including U.S. Senate candidate Kevin de Leon (D). Friday was the deadline for bills to pass out of their house of origin. The deadline for bills to be passed this year is Aug. 31, and the last day for the governor to sign or veto them is Sept. 30.

The measure comes amid a decade-long debate over utility liability for wildfires, which heightened last year as more than 170 fires swept across California. The Department of Forestry and Fire Protection recently found that Pacific Gas and Electric had caused four Northern California fires, and investigations continue into much larger fires that hit the state last year. (See CalFire Says PG&E Caused 4 Wildfires Last Year.)

Utilities argue that climate change and drought are compounding the effects of the fires. Some observers also blame forest management practices for exacerbating the problem. Last November, the CPUC rejected San Diego Gas & Electric’s request to recover $379 million in wildfire-related costs for fires in 2007, drawing swift reaction from all three of the state’s investor-owned utilities. (See Besieged CPUC Denies SDG&E Wildfire Recovery.) In addition to their concerns over recovering fire costs, utilities also face civil suits by property owners blaming the power companies for fire losses.

The bill would require the state Office of Emergency Services to adopt standards and model policies that utilities and local governments should employ for reducing fire risks, including defining “defensible space.”

The Utility Reform Network had opposed the bill, saying that “rather than enhancing safety, SB 1088 would reduce current energy utility incentives to operate their systems safely and prudently and would effectively grant the utilities a blank check,” according to a May 29 bill analysis.

The Consumer Federation of California said that the 18-month CPUC timeline “undermines the possibility for a review that is fully vetted by the regulator and the public” and that the legislation “leaves almost no room for the regulator to reject a utility plan.”

Another Dodd bill passed by the Senate on Thursday, SB 901, requires utility wildfire mitigation plans to include a description of the factors the companies use to determine when they should de-energize distribution lines and procedures for notifying customers and first responders, who could encounter live lines.

Dodd’s two proposals were part of a seven-bill package approved by the Senate last week, which also dealt with homeowner insurance coverage, controlled burns and landslides. President Pro Tempore Toni Atkins (D) said the Senate has also proposed a budget that includes $483 million for fire-prevention efforts and $551 million for wildfire mitigation.