California reckons with the cost of wildfires to come

By Lauren Hepler, New York Times

SACRAMENTO — A recently formed California wildfire commission sent state lawmakers a new blueprint Friday for adapting to increasingly destructive fire seasons.

Wildfire survivors and advocates at the commission hearing expressed frustration about what they called a continuing lack of accountability for the state’s largest utility, Pacific Gas & Electric, which has been found responsible for several deadly blazes. But a member of the commission, Michael Kahn, said its proposed changes to state liability, compensation and insurance policies were “not in any way shape or form letting the utilities off the hook.”

The five-member Commission on Catastrophic Wildfire Cost and Recovery voted unanimously to send its findings to the governor and state Legislature for consideration.

The action coincided with a fresh sign of the continuing potential for catastrophe heading into another wildfire season. Officials reported a heightened fire threat through Saturday afternoon in Napa, Solano and Yolo counties, north of San Francisco, because of low humidity, high winds and dry vegetation. And PG&E warned thousands of customers that it might cut off power to reduce the hazard, possibly for days.

There was also a reminder Friday of past devastation as members of PG&E’s board toured an area leveled last fall by a fire attributed to the company’s equipment. The blaze, the Camp Fire, was the deadliest in state history, killing 85 people. The board’s firsthand look at the aftermath was ordered last month by a federal judge monitoring the utility’s safety practices.

The Commission on Catastrophic Wildfire Cost and Recovery was formed in September, in the course of California’s deadliest fire season on record, as the state sought to address the impact of fires occurring more often in a hotter and drier climate.

In the report approved Friday, the commission said California’s fragmented approach to wildfires was “squandering” resources and threatening the viability of the state’s utilities. Instead, the panel recommended that lawmakers create a fund and other new mechanisms that would distribute costs for fire prevention and damage payments more broadly among ratepayers, residents of fire-prone areas, insurance companies and government agencies.

Though the report does not specify a prospective dollar amount for such a fund, the commission said it should be a “large enough fund to be meaningful,” but should not “perversely incentivize risky behavior” by utilities or homeowners reluctant to invest in safety measures like removing trees and brush or shielding power lines.

Patrick McCallum, who narrowly escaped his burning home during the 2017 Tubbs Fire in Northern California wine country, said the committee was too focused on thorny political issues like liability while victims’ claims had yet to be paid. McCallum, a higher-education lobbyist by trade, now represents the victims’ advocacy group Up From the Ashes.

“What’s going on now for the victims is horrible,” said McCallum, who ran out of his home wearing only boxer shorts on the night of the fire. He considers himself lucky to have a new home, but grappling with the loss of family heirlooms and never-ending paperwork adds to the toll, he said.

“You have to replace everything,” he said.

One question is how the commission’s recommendations may be factored into the parallel efforts of the Legislature, a governor’s office “strike force,” and agencies including the California Department of Forestry and Fire Prevention, known as Cal Fire, and the California Public Utilities Commission.

Gov. Gavin Newsom and legislative leaders have expressed interest in establishing a wildfire fund and streamlining the process of sorting out costs after a fire, according to a May 29 statement from the governor’s office. But they are still exploring one of the most contentious issues: whether to change a state provision holding utilities responsible for fires caused by their equipment. The commission proposed to hold companies liable only when they are negligent.

“These recommendations are going across the street into the blender, right?” a wildfire commission member, Pedro Nava, said Friday during the meeting at Sacramento City Hall, near the state Capitol. “There will be a certain amount of cherry picking.”

The bankruptcy proceedings of PG&E, potentially the biggest contributor to a fund for victims, may complicate prospects for quick action. A federal bankruptcy judge, who would probably need to sign off on any major financial commitments, has given PG&E until September to propose a corporate reorganization plan, and utility shareholders have floated their own vision for a multibillion-dollar settlement fund.

PG&E told the wildfire commission in a written statement that the current system “makes utilities the insurers of last resort” and undermines state energy reliability. The commission’s report warned that other utilities could also go bankrupt after future fires unless changes were made.

Terry McBride, whose home and three rental properties burned in the 2015 Butte Fire, said the PG&E bankruptcy was preventing her and her daughter from acting on plans that they had drafted for a new house on their land in northeastern California.

“We’re almost four years living in a camping trailer and haven’t seen a dime,” said McBride, a fifth-generation resident of densely forested Calaveras County. She and many of her neighbors negotiated settlements late last year, she said, that were put on hold when PG&E filed for bankruptcy in January. “We’re just kind of stuck.”

Local officials in the rural Northern California area around the town of Paradise, which was ravaged by the Camp Fire, welcomed the commission’s calls to expand subsidies for homeowners insurance and to require insurance companies to provide customers with fuller disclosures about coverage provisions.

Shari McCracken, chief administrative officer of Butte County, which includes Paradise, testified at a previous commission hearing that the Camp Fire had left a “magnitude of destruction that people just can’t quite grasp.” Reached by phone, McCracken said she could not attend the Friday meeting because the county was still providing shelter for around 50 households displaced by the fire, in addition to untold numbers of people living in cars, churches, tents or other temporary locations.

Though many have left the area, McCracken said the county strongly supported the commission’s insurance proposals, saying they could benefit those who have decided to stay and rebuild.

“That’s a big concern here,” she said. “People are getting canceled or, you know, quotes of $10,000 for homeowner’s insurance.”