Published
4 years agoon
The careers of political executives – presidents, governors and big city mayors – are often, fairly or not, defined by how they deal with the crises they encounter.
It’s just a framework and given the legal, financial and political complexities of both issues, the devil will very much be in the details.
One might expect those details to emerge during weeks or even months of negotiations between Newsom and legislative leaders, plus talks with the countless outside interests such as the utilities themselves, their unions, consumer groups, fire victims, insurers, Wall Street lenders and stockholders.
However, Newsom wants the Legislature to act by July 12, when it is scheduled to take a month-long summer break and also the deadline for credit rating agencies to decide whether utilities, particularly bankrupt Pacific Gas & Electric, will have their debt downgraded, making it much more difficult for them to borrow money.
That’s a very tight time frame and the plan faces some stiff criticism, especially from consumer advocates who say it may unfairly shift the financial burden from the companies to their ratepayers when downed utility lines cause wildfires.
Newsom and other Capitol politicians are acutely aware that PG&E, et al, are not popular these days and that if they appear to let them and their executives off the hook for wildfire damages, there could be a political backlash.
Under current law, dubbed “inverse condemnation,” utilities are strictly liable for losses from wildfires their equipment causes. Utilities say that’s an unfair burden because they cannot control nature and are powerless, as it were, to prevent fires when hot weather and high winds cause even well-maintained electric cables to fall.
The Newsom plan would presume the utilities to be innocent if they have met the higher safety standards to be imposed and otherwise acted prudently, thus allowing damage claims to be shifted from stockholders to ratepayers.
Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He has written more than 9,000 columns about the state and its politics and is the founding editor of the “California Political Almanac.” Dan has also been a frequent guest on national television news shows, commenting on California issues and policies.
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