California governor makes new proposals to fight wildfires, PG&E shares rise

April 12, 2019

(Reuters) – California Governor Gavin Newsom released a report on Friday calling for the creation of funds to fight wildfires and proposed that state law should be reformed to reduce liability of utilities, sending PG&E Corp up nearly 12 percent.

Newsom’s report calls for changing liability for wildfire damage to a fault-based system. The current system, known as inverse condemnation, exposes the state’s utilities to liabilities from wildfires regardless of their negligence, as long as their equipment is involved.

The current system pushed PG&E to seek bankruptcy protection in January, as it faced liabilities in excess of $30 billion related to the deadliest wildfires in California’s history.

“Under the status quo, all parties lose – wildfire survivors, energy consumers and Californians committed to addressing climate change. The imperative now is on action,” Newsom said.

The report proposed creating two funds to help utilities pay for wildfire damage claims and spread the cost more widely among stakeholders.

Shares of Edison International also rose 7 percent at $66.8.

Edison International is the parent company of the utility Southern California Edison Co. Earlier in March, investigators found that the devastating Thomas Fire in northwest of Los Angeles was sparked by power lines owned by SoCal.

(Reporting by Aishwarya Venugopal and Shanti Nair in Bengaluru; Editing by Shounak Dasgupta)

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