Protecting taxpayer interests in the fire liability fight

Thomas FireOne of the most contentious political battles currently being waged in Sacramento during the final two weeks of the legislative session is over the extent to which investor-owned utilities, such as Pacific Gas & Electric, should be held liable and have to compensate property owners for the damage inflicted by the horrendous wildfires that are still burning across the state. Average California taxpayers and homeowners probably sense this is a big deal because of extensive media coverage, but may not know what to think about it.

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Here’s what’s going on.

First, there is little dispute that the number of wildfires and their intensity has increased dramatically in recent years. Investor-owned utilities, including PG&E as well as San Diego Gas & Electric, have been forced into big legal settlements because many fires were allegedly caused by electrical wires or other equipment. The utilities, however, have attempted to shift some of the blame to natural causes such as climate change, which they argue produces the conditions for more catastrophic fires. (More recently, blame has also been placed at California’s mismanagement of public lands, which is undoubtedly a contributing cause).

Determining liability for wildfires is such a hot issue — no pun intended — because of the amount of money involved. San Diego Gas & Electric was facing more than 2,500 lawsuits and thus paid $2.4 billion in settlements for its role in three 2007 fires that burned over 1,500 homes, took human lives and burned 368,316 acres in San Diego County. Fires still burning as this column is being written have inflicted even greater damage and loss of life.

These damages have rocked PG&E and SDG&E.  According to a January blog post from the Energy Institute at Hass, California utilities lost $20 billion in market capitalization after last year’s fires.

In an effort to lessen their liability, the utilities say a constitutional doctrine called inverse condemnation has compelled them to settle lawsuits from property owners, firefighting agencies and local governments. They believe the doctrine entitles them to recoup some of the expenses by raising rates, but California’s Public Utility Commission has balked.

Although the utilities’ efforts to offload some of their liability for fire damage is understandable, taxpayer advocates are opposing the shift as it diminishes their own property rights.  The Howard Jarvis Taxpayers Association views limited taxation on property as a natural extension of property rights generally.  For example, following the infamous Kelo v. New London decision by the United States Supreme Court allowing the use of eminent domain for private-to-private transfers of property, HJTA fought for both a state constitutional, as well as statutory, prohibition of those takings.  Other property-rights issues of major concern to taxpayer advocates include the attempt to expand rent control in California and ensuring that just compensation is paid to property owners for traditional exercises of eminent domain, especially for boondoggle projects like California’s High Speed Rail project. …

Click here to read the full article from the Pasadena Star News


  1. Maybe it would be better to sue the State of California and/or the US Forest Service for not allowing the clearing of underbrush and dead trees. “Managing the forest” as an asset would make more sense.

  2. I just hope that these fires do not come back to hurt us all with no insurance offered and insurance companies leaving state, or higher prices for insurance across the board. That should not be allowed to happen.
    Insurance companies should be uniting and suing the State of California for bad policy and recouping losses from state…not raising insurance prices on their customers to cover any losses. The way I see it, the state elected officials who did not take action to change policy in years of repeated fires should be made to take responsibility personally for any losses. Brown says that these fires are the new normal!? Really? All Californians are being hurt by state policy.
    I would expect to be hearing much on this subject…but there is silence.
    Very interesting! This is what you get with a ONE PARTY STATE.

  3. Brenda Torres says

    TWO THUMBS UP FOR JIM CARR AND APRILA…Their comments hit the nail on the head, we need better management of our California Forests! Thin out all of the Dead and Diseased Trees, we used to do that, What Happened?!!!

  4. What happened with the thinning of the forest is that it got to be just a little to much like work.

  5. Aprila and Carr are both spot on but I think the bigger problem is PG&E that keeps killing people and destroying property due to their lack of maintenance.

    Its time we put it on the ballot to put an end to PG&E and replace it with some type of Public/Private partnership that will be independent of political influence but accountable to the counties in which it operates.

  6. The Man from Bear River says

    Too all that have previously posted. If PG&E and others cannot get rate increases to bury the lines, they are not to blame. The penny wise and very pound foolish State regulators are creating a trap.

  7. In 1994 PG&E and others were behind prop 9 the rate payers got !@#$ing screw. There is a old saying Live by the sword, die by the sword. PG&E is the !@#$ing worst out of the three. If our government wasn’t !@#$ing stupid and wasteful with 16 Boeing 747 Global SuperTanker we could easy reduce fire time by 90%. Our !@#$ing government don’t care about California or the environment. Liberals are Master Liars.

  8. State of California and the US Forest Service need to responsible for super poor management and wasteful.
    PE&E needs to be responsible as well…They have screw the rate payers. Lets file bankrupt. Someone will buy them out.

  9. I think the utility companies should sue the Sierra Club, et al for mis-management of the forests in question.

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