The Catastrophic Wildfire Cost and Recovery Commission issued a draft report last week. The report and commission were authorized and established in September 2018, when the state Legislature passed Senate Bill 901 and Gov. Jerry Brown signed it.
The commission has focused on three main issues created from the recent massive state conflagrations. And utilities are not the only parties responsible for reducing wildfire risk. All levels of government, as well as residents in fire-prone areas, hold responsibility, too.
The major issue is the role of utilities in the cause and follow-up to these catastrophic fires. Many in Sacramento and even east on Wall Street are worried about the possibility that one or more of California’s electric utilities may have to declare bankruptcy.
The level of costs imposed on electric utilities affects their viability in several ways. Most obvious are the ability to borrow and the cost to borrow. But also, as costs increase, the price of electricity will increase, thus affecting customers throughout the state.
It has been widely reported that the investor-owned utilities, particularly Pacific Gas and Electric, have been assigned responsibility through the use of “inverse condemnation.” While there is no proof that the utility’s equipment caused every fire, it did contribute. State case law applies inverse condemnation to require the utility to assume full responsibility and cost.
However, few realize that this principle has been applied to water districts. During the commission’s hearings, a coalition of water districts wrote, “Following the Freeway Complex Fire [2008], the Yorba Linda Water District was slapped with a $69 million judgment, despite the superior court determining that the Water District did nothing wrong and had nothing to do with starting the fire. The District had to pay tens of millions of dollars because the fire — which was caused by a disabled vehicle — damaged the water supplier’s pumps, which then couldn’t be used to help fight the fire.”
More recently, some homeowners who suffered major losses in the Thomas Fire are suing the City of Ventura and a local water district for inadequate water pressure to ensure firefighters could extinguish the fire.
The criteria for assessing responsibility and cause need to be addressed, the commission argued.
There is an issue of how to finance a wildfire recovery fund. This was one of the commission’s main recommendations to the Legislature — create a wildfire victims fund. While it acknowledged that this would be a “daunting task,” the commission felt even a small fund would help alleviate some of the post-fire problems.
The third issue, and paramount for individual residents, is fire insurance. As Bob Serverance of Hemet noted at the Idyllwild Fire Protection District commission meeting last week, many insurers have left the state. New homeowners on the Hill more often have to obtain insurance from the state Fair Access to Insurance Requirements program.
The number of policies from the program is increasing every year, the commission reported.
While the availability of fire insurance is not a crisis yet, the report’s authors believe that it could become one if more catastrophic fires engulf the areas within the state.
“Doing nothing to improve insurance conditions in the state is not a good option,” is the first recommendation of the insurance appendix.
The report emphasizes that many pieces, both natural and human, contribute to the cause of a wildfire, unlike other disasters such as earthquakes, hurricanes and snow storms, for which nature assumes the bulk of the cause.
Consequently, the commission urges the state to do much more to reduce wildfire hazards in non-urban environs. Not only does the commission believe more funding to conduct fuel reduction projects is necessary, but the state should assume a stronger role urging local governments to take more vigilance in their building practices, such as encouraging home-hardening actions, and approvals.
This includes urging local governments to enforce defensible space ordinances. Local actions include stringent building codes and use of fuelbreaks. The Hill has been in the forefront of the latter action.
More than 25 million acres of California wildlands are classified as under very high or extreme fire threat. About 25 percent of the state’s population — 11 million people — live in that high-risk area.
One of the more ominous notes in the report is governments’ and scientists’ inability to define a “catastrophic wildfire.” The authors wrote, “…This workgroup cannot exclude the possibility that the 2017 and 2018 wildfires were 1 in 250 year events or that they were 1 in 20 year events, and the workgroup does not know whether average losses over the past 20 years or the past 5 are an appropriate level to plan for over the next decade.”
Wednesday night after the commission’s report was released, Gov. Gavin Newsom, Senate President Pro Tem Toni Atkins and Speaker of the Assembly Anthony Rendon issued a statement about their intent to respond.
“The report of the Governor’s Strike Force made clear the Legislature must promptly act to strengthen mitigation efforts, expand and modernize our emergency response and firefighting systems, harden our energy grids and delivery infrastructure, and to hold bad actors like PG&E accountable,” their press release said. “And now the SB 901 Commission draft report makes clear that we must act now to stabilize the energy market and our utilities by addressing the liability faced by utilities after catastrophic wildfires … We will pursue legislation to tackle these important issues.”
Earlier on Wednesday, the California Public Utilities Commission, “in its ongoing efforts to expeditiously implement Senate Bill 901, approved utility Wildfire Mitigation Plans for 2019, and made additional improvements to utility communication and notification protocols for proactively shutting down power lines during hazardous conditions that could lead to wildfires from electric equipment failures,” according to its press release supporting SB 901.

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