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PG&E’s bankruptcy woes

Until now, the California Public Utilities Commission has appeared to work responsibly at minimizing future wildfire risks in this thoroughly singed state, certifying new safety plans from electric companies it regulates and imposing a few fines where the big utilities have been found negligent.

But those moves and a unanimous PUC vote in 2017 to hold one company financially responsible for helping cause one of the huge fires that plague this state might be no more than a smokescreen. The aim, it appears, has been to make the commission and the utilities whose wishes it usually carries out look like responsible public servants, when that may not be true.

This was the upshot of a waiver filed quietly with the U.S. Supreme Court late last month by PUC lawyer Christine Jun Hammond and a follow-up from another PUC attorney three weeks later. The first document was Hammond’s response to an attempt by the San Diego Gas & Electric Co. to get the high court to hear its appeal of the 2017 decision. The ruling held the company liable for losses in the 2007 Witch, Guejito and Rice fires. “I do not intend to file a response,” Hammond’s form letter said. Without PUC opposition, it’s much more likely the Supreme Court will eventually give SDG&E its way.

The second PUC letter asks the court for another month to respond, apparently contradicting Hammond. Suddenly, there’s confusion about what this commission really wants.

Here’s the background to the legal maneuvering, which has huge implications for how damages will be apportioned from many subsequent fires. These include the Camp, Thomas, Carr, Woolsey, Mendocino Complex and wine country fires of 2017 and 2018. Companies like Pacific Gas & Electric and Southern California Edison have accepted some blame for most of those.

At a moment when high winds propelled wildfires across California early in December 2017, the PUC unanimously held SDG&E would have to pay more than $379 million in uninsured costs from the fires that devastated large parts of San Diego County ten years earlier. The blazes destroyed more than 1,300 homes and killed two persons. SDG&E has tried ever since to fob much of the cost onto all its customers, including people whose homes burned.

State investigators found SDG&E failed to properly maintain equipment or trim tree branches and chaparral growing near power lines before the infernos began. The company and its insurers paid more than $2 billion in claims, but it wants customers to foot almost all other bills.

No, said the PUC in a uniquely (for it) consumer-oriented decision. This was utility negligence. That’s essentially what state authorities also found about utility conduct before several of the later blazes, so the SDG&E decision bore huge implications for other utilities. If the decision stands, it could cost them many billions of dollars. Like SDG&E, they want to make all their customers into financial fire victims.

So PG&E and Edison filed court briefs as SDG&E appealed the ruling. All the companies falsely claimed the assessment against SDG&E was due to “inverse condemnation,” a concept in state law that holds utilities responsible for fire damage even when they don’t cause it.

But the SDG&E decision was about corporate negligence, not inverse condemnation. The PUC could have defeated the utility argument by simply pointing this out and urging the high court to uphold the PUC ruling by not taking the case.

It might not do this, the Hammond waiver makes clear. The PUC also initially claimed to represent all victims of the 2007 fires, another untruth. But before San Diego lawyer Michael Aguirre, who has long represented some fire victims, knew about that claim, the false statement had been circulated to all Supreme Court justices, who will decide this summer whether to take the case.

“The utilities are trying to make other people pay the bills for damage they caused,” Aguirre said. “If they win this case, it will be a precedent for all the other fires.”

This could be yet another case of the PUC carrying water for companies it’s supposed to regulate. “It’s a backdoor effort by the PUC to get the customers to pay all the bills,” Aguirre said. He might be dead-on right.

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Thomas D. Elias writes the syndicated California Focus column. He is author of the book, “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It.”

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