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California

With new California wildfire law, Newsom didn’t let perfect be the enemy of good

Gov. Gavin Newsom
Gov. Gavin Newsom discusses emergency preparedness during a visit to the California Department of Forestry and Fire Protection Colfax station on Jan. 8 in Colfax, Calif. Newsom signed into law last week legislation that will create a fund to help utilities pay for costs associated with wildfires sparked by their equipment.
(Rich Pedroncelli / Associated Press)

“Nothing’s clean, Howard. But we do our best, right?” the Ava Gardner character tells eccentric Howard Hughes, who is fretting over germs.

It’s one of my favorite movie quotes, one that universally speaks to the human condition — most any condition, particularly politics.

In the 2004 Academy Award-winning film “The Aviator” about Howard Hughes, the recluse plane builder/movie maker (played by Leonardo DiCaprio) stares at a wash basin of tap water and asks actress Gardner (Kate Beckinsale): “Does that look clean to you?”

Gardner’s “nothing’s clean” reply is another version of the mantra that propels pragmatic politicians everywhere: “Don’t let the perfect be the enemy of the good.”

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America’s political system wasn’t designed by the Founders to produce perfection. It was structured with annoying checks and balances that force compromise to achieve anything significant.

This is a long-winded way of saying that Gov. Gavin Newsom and the Legislature deserve kudos for enacting a hopefully good — if not perfect — law last week aimed at propping up private electric utilities and saving them from going belly up in the next devastating wildfire.

“It was the least bad thing to do,” says one legislative participant in the negotiations. “It’s a feather in Newsom’s cap. He pushed hard to get this done.”

What was bad about it? The smell emanating from Pacific Gas & Electric Co.

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Many legislators held their noses while voting for something that smacked of a PG&E bailout, although it didn’t really go that far. The private utility has been widely criticized for failing to maintain its power lines and other equipment that have been blamed for igniting some of California’s worst wildfires.

But the legislative consensus is that PG&E is too big and important to fail. It provides electricity and natural gas for 16 million people — 40% of the state — throughout Northern and Central California.

It’s in bankruptcy now. But if PG&E collapsed completely, what would take its place? Maybe some local governments would purchase small pieces. San Francisco is ruminating on it. But they’d grab off all the good parts and probably leave the most vulnerable wildfire regions — the brushy and tree-saturated foothills — with no power service.

The state certainly doesn’t want to buy out PG&E and venture into the power business. It’s not up to it. It can’t even run the DMV properly.

“Many rooting for this bill to fail want to see the government take over PG&E. If there’s anything worse than big business, it’s big government,” Assemblyman James Gallagher (R-Yuba City) said during the floor debate. He voted for the measure, as did other rural Republicans.

The Assembly overwhelmingly passed the fast-tracked bill 63-10 three days after the Senate did 31-7.

The bill was a late bloomer. Proposed by Newsom based on the recommendations of his wildfire strike force, the measure zipped through both houses in two weeks, a speed permitted only for the most greased bills.

Some skeptics demanded a pause, insisting the Legislature wasn’t being deliberative enough.

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Wrong. Lawmakers have been chewing on wildfire issues for two years. It made no sense to vacillate further over how to financially bolster California’s private utilities.

“Essentially we’ve spent the last year and a half — if not more — evaluating these concepts,” says Assemblyman Chris Holden (D-Pasadena), the bill’s author and chairman of the Committee on Utilities and Energy.

Legislators were under pressure to pass the bill before they recessed for their summer vacation last Friday. For one thing, it would have been a bad look if they’d gone off to play for a month at the start of the wildfire season without finishing their work to help the utilities and ratepayers.

More importantly, the bond rating agencies threatened to downgrade all private utilities’ credit ratings if lawmakers failed to act by last Friday. This was considered unfair and potentially financially crippling for Southern California Edison and San Diego Gas & Electric Co.

It could have forced rate hikes for consumers and for Edison — even bankruptcy if a catastrophic wildfire occurred that left the utility liable for billions of dollars in damages.

Besides, SDG&E has been widely praised for its equipment maintenance and wildfire prevention efforts.

“PG&E wasn’t the issue. It was San Diego Gas & Electric and Southern Cal Edison,” says Sen. Bill Dodd (D-Napa), a major wildfire legislator whose wine country district was charred two years ago.

The legislation set up a $21-billion fund available for electricity providers held liable for wildfire damage. Utility customers and utility investors will split the cost. Utility shareholders will also have to spend $5 billion on equipment updating and fire prevention. And PG&E will be required to exit bankruptcy by next July.

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“The main aim was to protect ratepayers from rate increases,” Dodd says. “This is a ratepayer bailout if it’s a bailout at all.”

The ratepayers’ contribution to the wildfire fund will be handled through a monthly $2.50 charge they’ve been paying for two decades. It was slated to expire, but now will be extended 15 years.

When the lawmakers return from vacation, they’ll debate about 20 other bills involving wildfire prevention and insurance availability.

Meanwhile, Newsom and former Gov. Jerry Brown have poured an extra $1.2 billion into fire prevention and fighting over the last two years.

Maybe it’s not perfect. But, to paraphrase Gardner, they seem to be doing their best.


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