California lawmakers are kicking off the 2020 legislative session with plans to introduce bills targeting the operations and deployment of public safety power shut-offs by Pacific Gas & Electric (PG&E) and other utilities.
A bill introduced on Monday by state Assembly Member Marc Levine, D, would allow the California Public Utilities Commission (CPUC) to embed a public administrator in a utility's leadership if that utility does not meet certain state standards, to weigh in on decisions related to infrastructure and safety protocols. Meanwhile. Assembly Member Kansen Chu, D, plans to introduce bills supporting customers and providing the CPUC with greater oversight over de-energization events.
The new legislative session could be "the wild, wild west" of proposed bills targeting PG&E, California Sen. Bill Dodd, D, told Utility Dive, especially given how many lawmakers come from areas affected by either the wildfires or the shut-offs. "I think what's really important is that we get it right," he added.
PG&E's sweeping public safety power shut-off program provoked widespread criticism from lawmakers, regulators and customers in 2019, after millions of Californians were left without electricity for days. But the utility, which has six months to resolve its wildfire liabilities and exit bankruptcy under legislation passed by California last year, maintains that the shut-offs are in the best interest of customers in high fire-threat areas.
The legislature is likely to focus on proposals that strengthen the regulation of PG&E going forward — also a priority for Gov. Gavin Newsom, according to Noreen Evans, former state senator and current lawyer representing victims of the wildfires. Lawmakers also need to work on mitigating the impact of safety shut-offs, she said.
Better implementation of the shut-offs, along with grid safety and strengthened CPUC oversight are likely to be the topic of proposed legislation this session, Dodd told Utility Dive. He noted that lawmakers passed bills addressing PG&E's financial status and wildfire liability in 2017 and 2018, which taken together are "moving the needle and putting the state of California in a safer spot."
Dodd is considering potential legislation that could support customers who have critical electricity needs during the safety shut-offs, as well as bolstering the safety and governance within utilities. But it's too early for any details, he said.
Lawmakers are juggling many ideas about how to approach challenges connected with PG&E, according to California Assembly Member Chris Holden, D, and a lot of work is being done in real-time to minimize the impacts of safety shut-offs.
"Our goal remains the same," he said in an emailed statement. "First and foremost we must ensure wildfire victims are compensated. We will continue to prioritize ratepayers, increase accountability for the utilities, and explore new ideas to expand our wildfire prevention measures."
A public administrator for PG&E, other utilities
Levine's bill would allow the CPUC to evaluate each utility's financial, infrastructure and safety-related records. If a utility does not meet its standards, the agency would have the authority to appoint a public administrator for an initial period of 180 days to weigh in on key decisions. This administrator would have broad authority over the deployment of public safety power shut-offs, among other things.
"What we've witnessed in the policymaking process is an attempt to keep PG&E solvent as a business [being] prioritized over the public safety of Californians. And we need to turn that thinking over on its head ... to make safety the paramount concern of policymakers," he told Utility Dive.
Levine worries that the scramble to get PG&E out of bankruptcy by June 30 — a deadline to qualify for California's wildfire insurance fund, established by Assembly Bill 1054 — is confusing and disorienting policymakers. While ensuring that the utility settles its debts to wildfire victims is a valid concern, "I don't think that supplants the necessity to raise the prioritization of public safety this legislative session," he said.
His advice to PG&E's shareholders and investors is to anticipate more legislation like his proposal over the course of the session, and to demand an emphasis on safety from its board members.
Meanwhile, Chu on Monday announced plans to introduce two pieces of legislation that could impact PG&E — one that would authorize the CPUC to evaluate individual de-energization events and determine whether utilities should compensate affected customers, and a second requiring utilities to support ratepayers who need electricity for medical purposes.
"The poor communication, sloppy rollout, and lack of support and proper compensation from utility companies were unacceptable. I want to hold these companies accountable and ensure that these power shutoffs are not the norm," Chu said in a statement.
PG&E declined to comment on the proposals at this stage.
State Sen. Ben Hueso, D, chair of the Senate Committee on Energy, Utilities and Communications, will thoroughly vet proposals that come before his committee, spokeswoman Erin Hickey said in an email. Hueso is "committed to holding PG&E accountable for the gross mismanagement of recent shutoffs, and ensuring there is measurable progress to mitigate against the extended duration and widespread nature of the shutoffs that affected so many last fall," she added.
But a key focus for Dodd is ensuring that PG&E remains an investment-grade company — an issue addressed in both AB 1054 as well as SB 901, a bill passed in 2018 — "because if you don't have a strong, financially viable utility, you're not going to have the investment there that allows them to do the things they need to do," he said. At the same time, everything is on the table and he is not opposed to hearing ideas that are not popular with PG&E and its investors.
"That includes cooperativization, municipalization — it doesn't mean necessarily that it'll get done, but we need to understand everything and make the best decision for ratepayers," he said.