San Diego firm sues state to stop wildfire mitigation fund bill

A San Diego law firm is suing multiple state agencies, challenging a bill that created a fire mitigation fund which they claim bails out utilities that cause wildfires.

The suit, filed Friday by Michael S. Aguirre of Aguirre & Severson LLP, calls for invalidation of AB 1054 as a violation of the U.S. and California constitutions. It also seeks a declaration of the bill’s invalidity and injunction against any state officer and agency implementing its provisions. Nelson v. California Department of Water Resources Director Karla Nemeth 19-CV04171 (N.D. Cal., filed July 19, 2019).

AB 1054, passed July 12 and sent to Gov. Gavin Newsom’s desk just before the summer recess, provides for utility customers to subsidize the issuance of $10.5 billion in bonds to be accessed automatically by the utilities whenever its equipment causes a fire, the suit said.

“AB 1054 violates the due process rights of electric utility customers, would impose unjust and unreasonable rates upon them, was improperly designated as an urgency measure, and would violate the right of the public to access records pertaining to the public’s business,” the complaint states.

Defendants named in the suit include members of the California Department of Water Resources, California Public Utilities Commission and the California Department of Finance. No agency representatives immediately returned requests for comment.

“I just think that people have to understand that, if it’s true our governing Legislature cares about global warming and they’re concerned about utility-caused catastrophic wildfires impacting global warming, they shouldn’t be lowering the standards. They should be raising the standards,” Aguirre said Friday. “By lowering it, the utilities have less incentive to operate their equipment.”

The bill, since its proposal, has been the subject of criticism and opposition from both Republican and Democratic state lawmakers.

Plaintiff Gene A. Nelson is an electricity and gas ratepayer of the Pacific Gas & Electric Company and would be required under AB 1054 to subsidize the utility companies through payment of increased rates, which would violate his own constitutional and due process rights and be subjected to unlawful government taking, the complaint states.

The complaint warns that utility customers can now be responsible for paying back potentially “limitless utility wildfire liabilities without due process.”

“Worse, AB 1054 redefined both the burden of proof and the legal standard by which an electric utility can be found prudent,” the suit continued. That means, the utility customers would be the ones required to prove a utility’s imprudence, and the bill makes it extremely difficult for customers to prevent a utility from passing uninsured wildfire liabilities onto them, the suit said.

The California Department of Forestry has already found utility electric equipment to have caused at least 14 of the state’s most destructive wildfires since 2007, the suit pointed out.