The Electricity Bailout Bill Sails through the Legislature Despite Its Numerous Flaws

Yesterday, the California State Senate voted to approve Assembly Bill 1054 – Governor Newsom’s Wildfire Fund legislation. Some have called it Governor Newsom’s first real test of legislative leadership. The measure actually is a feeble attempt to thread the needle between Wall Street, the investor-owned utility companies, ratepayers, trial lawyers, and victims of recent devastating wildfires that jeopardize the solvency of the state’s IOUs. Senator Brian Jones (R-Santee) released the following statement regarding the passage of AB 1054:

“As is often the case when multiple interests face legislation coming their way, one is isolated and their interests are gored. Sadly, with AB 1054, the ones getting gored are ratepayers.

“In the Los Angeles Times article that was published after the bill passed the Senate, Taryn Luna wrote, “There’s been no shortage of criticism for Gov. Gavin Newsom’s plan to help California’s largest utilities stave off bankruptcy from costs associated with wildfires: No focus on prevention efforts. More difficulty proving utility negligence. Too much of the financial burden falling on millions of utility customers.” I couldn’t agree more.

“In one of its worst provisions, a fee that we have all been paying for 20 years as a result of the last time the Governor and Legislature tried to “deregulate” electrical rates back in the late 1990s and is set to expire, will simply be “extended” for another 15 years with the intent of collecting $10.5 billion for the Wildfire Fund. No one even mentioned that we were breaking our word about a temporary fee. Only in the Capitol can legislators, with a straight face, argue that an extension of a fee on utility ratepayers, is not a fee increase that falls on utility ratepayers. Since ratepayers are used to paying it, it’s not an increase when extended…or so the logic goes. And in a nod to the rich and coastal, if you have solar on your home or are cooled by the ocean breeze, the fee will barely touch you. Only ordinary inland working class ratepayers will shoulder this one.

“As to those provisions the Governor and Legislators tout as getting tough on utilities, their executives, and Wall Street types, there are loopholes large enough for their army of lawyers to drive through. Those provisions that require the utilities to harden their assets to prevent ignition of wildfires will hopefully help, but there is nothing in the bill about clearing the mass of fuel that has accumulated in rural areas because of enviro-resistance to that removal.

“As to process, AB 1054 has been a ghost. It only surfaced for the public over this past holiday weekend and is being fast-tracked as to avoid any real public notice and any real review. Yesterday, it passed both the policy and fiscal committees and off the Senate Floor in a matter of hours. A process that properly should take weeks or months. The Legislature should take the summer recess month to hold hearings away from the Capitol bubble in places like San Diego, the Inland Empire, LA, the Central Coast, the Central Valley, in Sonoma-Napa, up in Redding and up in Chico instead of the rushed, quick show hearings we witnessed yesterday.

“My job in Sacramento is to protect taxpayers and in this case ratepayers from an ever-increasing government appetite that wants to consume all the fruits of our individual labor. Once Sacramento is done, our families’ budgets will be left with nothing for ourselves. I voted against AB 1054 because it has no real compassion for victims and is mostly smoke and mirrors about managing the forests to reduce future fires. After all the new government agencies created do their thing, the costs will all fall on ordinary, hardworking Californians who can least afford it.”