California Lawmakers Abandon Effort to Change Wildfire Liability Rules for Utility Companies

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California lawmakers have scuttled their effort to craft a new liability standard for electric utility companies in the aftermath of a wildfire, a leader of the negotiations said on Saturday.

“It clearly became a distraction,” said state Sen. Bill Dodd (D-Napa), the co-chairman of a joint legislative conference committee that was convened earlier this summer to address wildfire prevention and liability issues.

California’s large investor-owned utilities contend that the existing liability rules are too onerous and costly. Under what’s known as “inverse condemnation,” a utility company can be held liable for costs related to a wildfire involving its equipment, even when the company followed all existing safety regulations.

The topic was one of several key issues addressed by the committee, but widely seen as the centerpiece of the negotiations. Pacific Gas & Electric Co., whose equipment has been blamed for starting several of the deadly blazes in Northern California last year, has warned it faces bankruptcy in the face of what could be $2.5 billion or more in damage awards.

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