A measure to shield electric utilities from lawsuits that result from their operations sparking wildfires continues to move through the Wyoming Senate.
House Bill 192, “Public utilities-wildfire mitigation and liability limits,” would restrict what wildfire victims can claim damages for when an electric utility sparks a blaze. To qualify for the protection, a utility would be required to invest in and maintain more stringent wildfire mitigation strategies.
The bill cleared second reading on the Senate floor Thursday, but not everyone is comfortable with denying property owners access to the courts for damages. Stakeholders also question whether the measure would actually accomplish its aim — stemming skyrocketing insurance costs for utilities, which are passed on to ratepayers.
Laramie Democratic Sen. Chris Rothfuss noted that while debating the original measure between legislative sessions, utilities and other proponents could not provide assurances that the bill would result in lowering or even arresting rising insurance rates.
“We lacked those assurances in the off season,” Rothfuss said. “So then my second question is, how do we get [the legislation] to the point where we know that this bill helps the rate payers instead of just the corporations?”
Rothfuss, who generally supports the measure as a difficult tradeoff, and other senators acknowledged that favoring electric utilities in the legal marketplace may be a necessity to preserve the “public good” of interconnected utility systems that literally power the economy. They also acknowledged that granting utilities some level of immunity for their culpability in wildfires may likely shift the burden of rising insurance costs to property owners.
In Montana, where a similar measure is under consideration, some insurance companies have warned that it could lead to denying coverage to home and property owners in high-risk areas.
It’s a dilemma in which there seems to be little opportunity to hold ratepayers and property owners harmless, Rothfuss said. Restricting private property owners’ access to the courts, for no fault of their own, might be necessary to help ensure reliable electrical service.
“So we’re going to legislate a bias for the courts, effectively, and say, ‘Don’t start with a level playing field,’” Rothfuss said. “That then disadvantages the private property owner or the insurance of the private property owners, which would then become responsible. And that might be okay.”
“You got to keep the lights on,” Wyoming Rural Electric Association Executive Director Shawn Taylor told WyoFile.
Taylor led a stakeholder group of utilities, landowners, agricultural groups and others to craft the original legislation.
“Providing [utilities] some liability relief — not full immunity — providing us some liability relief, as long as we do the things we say we’re going to do, makes a whole lot of sense.”
Impending risks and costs
Wildfires, exacerbated by human-caused climate change, have become much more frequent and intense, particularly in the West. The region’s vast network of electric power lines and other energized facilities is aging and it simply wasn’t built to safely operate in an ever warmer and drier climate, according to industry experts.
Several billion-dollar class-action lawsuits have been waged following utility-sparked fires in recent years, threatening to bankrupt utilities. At the same time, their insurance premiums are skyrocketing. In both cases, those costs can be passed on to ratepayers who are already seeing rising rates due to myriad other factors. And if HB 192 becomes law, costs related to mandatory wildfire mitigation measures would also be passed on to ratepayers, pending approval from the Wyoming Public Service Commission.
Those additional pass-on costs to ratepayers, Taylor said, will be minimal because utilities are already taking such measures. The legislation simply codifies wildfire mitigation to meet increasing needs.
Meanwhile, the utility industry is lobbying for the creation of a national fund — similar to one implemented in California — to reimburse those with wildfire damage claims related to utility-sparked blazes.
Proponents of HB 192 say it’s appropriate for property owners and their insurers to bear the brunt of rising costs.
“That’s their job — to insure people. But [insurance companies] want us to be the insurer of last resort,” Taylor said. The tradeoff, he added, is that the bill requires utilities to invest more in wildfire prevention.
“It could bankrupt a co-op if we have a multi-million dollar lawsuit [even though] we did everything that we said we were going to do in order to mitigate fire risks.”
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