The Horse Gulch Fire near Canyon Ferry Reservoir on the evening of July 9, 2024. ((Photo courtesy InciWeb)
When Rep. Denise Baum, D-Billings, first heard about a bill to call on utilities to submit wildfire mitigation plans, she said she was a solid no.
But this week, Baum was among 98 representatives who voted in favor of House Bill 490, and she said it was thanks to the work of the sponsor, Rep. Amy Regier, R-Kalispell.
The bill, initially controversial, was described as one of the first attempts at addressing climate change in the Montana Legislature.
It requires regulated utilities and electric cooperatives to file and follow wildfire mitigation plans, outlines specific requirements for those plans, and it protects those entities from being liable for fires they didn’t cause.
The bill was heavily amended, and, according to legislators, it continues to need scrutiny given its complexity and how quickly it has moved, but it garnered broad support in the House this week.
“The fundamental goal of this bill is to prevent wildfires so we don’t get into the issue — as often — about who pays for what when we’re looking at potentially tens and tens of millions of dollars of money needed to repair and replace property and potentially (compensate for) human life,” said Rep. Tom France, D-Missoula.
Just one representative opposed it — one seat is open after Rep. Ron Marshall, R-Hamilton, resigned — and Rep. Zooey Zephyr, D-Missoula, had strong criticisms of the bill in committee and on the floor.
Zephyr said the fact that one of the first looks at climate change resulted in a bill “giving cover” to the entities that contribute to climate change was an “indictment of capitalism.”
She said she feared the bill would protect utility ratepayers on one side, but at the cost of higher insurance premiums on the other side.
“This is such a wide miss of the mark, it’s going to be bad for Montana’s homeowners,” Zephyr said.
As amended, the bill says utilities and electric co-ops must file mitigation plans (instead of “may”), and it is headed to the Senate after having passed the House on Wednesday on third reading.
Wildfires have become more frequent and are costly. In 2021, the state spent $54 million on firefighting, according to Montana Public Radio.
In southern California, losses from recent fires were estimated to have reached more than $250 million, according to the Los Angeles Times.
Earlier in California, a legal firm secured a $13.5 billion settlement from PG&E for victims of fires in 2015, 2016, 2017 and 2018 after the utility filed for bankruptcy protection, according to National Public Radio.
In a narrative about the settlement it negotiated, the Watts Law Firm said PG&E should have done more to mitigate risk.
On the House floor, other Democrats and Republicans spoke in favor of the bill and Montana’s attempt to get ahead of the legal battles over who pays for wildfires.
Regier said the bill aims to ensure the electric co-ops and utilities demonstrate their commitment to reducing fire risk by requiring fire mitigation plans.
The bill also declares “strict liability” does not apply to utilities and electric cooperatives in Montana when it comes to wildfires, a standard Regier said has caused bankruptcy, layoffs and “skyrocketing utility rates” in California.
Under “strict liability,” a party is liable for damages even if they didn’t act negligently. In California in a 2023 memo, the Public Advocates Office, which advocates for ratepayers, said “strict liability” contributes to the financial burden on ratepayers, and the office recommended changes.
“We need to ensure that these utilities operate responsibly and can continue to provide reliable service to ratepayers, while still being held accountable for wildfire damages where they act negligently or imprudently,” said the memo.
Regier said the required wildfire mitigation plans must meet nine specifications, including vegetation management and regular inspections and maintenance. She said the Montana Public Service Commission will review plans for regulated utilities, and electric co-op boards will review co-op plans.
“Electric facility providers are not automatically liable for damages from wildfires if they were not negligent and took preventative measures,” Regier said. “To hold a utility liable, a plaintiff must demonstrate they were negligent.”
The plans must be updated every three years.
They must include descriptions of areas where facilities may be subject to “heightened risk of wildfire,” strategies for inspecting the facilities, ways the supplier will reduce risks of its equipment igniting a fire, and methods for de-energizing power lines, among other requirements.
Legislators stood up in favor of the bill for a variety of reasons, even though some said it still needs work.
Rep. Tyson Running Wolf, D-Browning, said the financial risk to electricity customers in tribal communities was especially great.
“The rate impacts on utility customers and co-op members from unreasonable court judgments increase insurance costs, but have significant impact on tribal communities, which have poverty rates above the statewide rate average,” Running Wolf said.
Rep. Shane Klakken, R-Grass Range, said he’s from a small town, and he doesn’t want the electricity co-op of which he’s a member, Fergus Electric, to get “sued into nothing” and then go bankrupt.
He said any company that purchases it would only jack up rates to pay off the debt.
“I’m in the middle of nowhere.” Klakken said. “I want my electricity.”
Rep. Bill Mercer, R-Billings, sponsored a controversial but successful amendment to say, in part, certain entities that have filed and “substantially followed” wildfire plans, as opposed to only filed them, “may not be” civilly liable for injuries or damages caused by wildfire, instead of “are not.” Mercer said the bill does not preclude the “ability to get relief under certain circumstances,” and the changes correct the bill’s title to reflect its content.
Mercer, former U.S. Attorney for Montana, also said a couple of other changes align the bill with standards in such legal cases.
Some opponents of the amendment, including Regier, said Mercer made some good points but they were also hard to weigh at the last minute. Despite their arguments, the amendment passed 58-41.
Rep. Ed Stafman, D-Bozeman, ultimately supported the bill on the floor, although in committee, he voted no and said he would like to see the issue continued to be studied to address the argument that home insurance prices would spike.
“I think the amendment will help with that, but without an opportunity to study it, I’m just not sure it’s enough,” Stafman said of work in committee.