California could make utilities pay for some blackout costs

A bill in the state Legislature would require electric companies to reimburse customers when they turn off the power to prevent wildfires.

Posted: Jan 23, 2020 9:29 AM
Updated: Jan 23, 2020 11:59 AM

SACRAMENTO, Calif. (AP) - A bill in the state Legislature would require electric companies to reimburse customers when they turn off the power to prevent wildfires.

Large electric utilities have been aggressively shutting off power for millions of customers ahead of windstorms to stop wildfires before they start.

A bill by state Sen. Scott Wiener would require investor-owned utilities to reimburse customers and local governments for some costs associated with the blackouts. It would require an electric company’s shareholders, not its customers, to put money into a fund to reimburse customers within two weeks of a blackout. It would also ban electric companies from raising rates to cover losses from a blackout.

The California Public Utilities Commission would oversee the fund and decide how big it should be. It would also let the commission fine power companies up to $250,000 per hour for every 50,000 customers impacted by a power shutoff if regulators determine the utility “failed to act in a reasonable and prudent manner.”

If those penalties had been in effect last fall, PG&E could have faced fines of more than $1 billion, according to a legislative analysis of the proposal.

The bill must pass the state Senate by Jan. 31. in order to have a chance at becoming law in 2020.

A letter from PG&E to state lawmakers says the bill would put customers and communities in a dangerous position.

Weiner said the bill will not be banning planned blackouts. But instead, he said it is to incentivize the right behavior.

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