FacebookTwitterRedditEmail

Gov. Newsom’s Proposal to Pay for Wildfire Claims: Let Utility Ratepayers Pay, Not the Companies

A proposal put forward by California’s Gov. Newsom to deal with liability claims arising from California wildfires caused by utility companies was reported on in a recent New York Times article. In the words of the reporters, “the key element” of Governor Newsom’s proposal is a $21 billion fund used to “shield the utilities’ ratepayers and the companies themselves” from liability claims.

How will this fund be financed? From the reporters: “Half of the $21 billion wildfire fund would be covered by the utilities; the other half would be financed by bonds paid off by utility ratepayers.”  This essentially means that ratepayers get to pay for both halves of this fund.

1. The half paid by the utilities: To pay for the fund, the utility companies’ rate of return which is “typically” 10.5 percent may decline. [1] However, the companies get all of their money from their customers or ratepayers paying their utility bills.

2. These same ratepayers will cover the other half of this $21 billion fund by paying-off the bonds used to raise funds to finance it. That amount will presumably come to much more than $10.5 billion since those who buy bonds expect to receive interest payments and/or for the bonds to increase in value.

According to a report in The Sacramento Bee, Newsom said that his proposal “treats wildfire victims fairly and protects California consumers.”

If this is how Governor Newsom protects consumers, they would probably be much better off not being protected by Newsom unless they believe paying for damages they were not responsible for is a form of protection.

Notes.

1. New York Times at https://www.nytimes.com/2019/06/21/business/energy-environment/newsom-california-wildfire-utilities.html California’s three investor-owned utilites are seeking a higher return that is opposed by Newsom.

More articles by:

Rick Baum teaches Political Science at City College of San Francisco. He is a member of AFT 2121.

bernie-the-sandernistas-cover-344x550
February 24, 2020
Stephen Corry
New Deal for Nature: Paying the Emperor to Fence the Wind
M. K. Bhadrakumar
How India’s Modi is Playing on Trump’s Ego to His Advantage
Jennifer Matsui
Tycoon Battle-Bots Battle Bernie
Robert Fisk
There’s Little Chance for Change in Lebanon, Except for More Suffering
Rob Wallace
Connecting the Coronavirus to Agriculture
Bill Spence
Burning the Future: the Growing Anger of Young Australians
Eleanor Eagan
As the Primary Race Heats Up, Candidates Forget Principled Campaign Finance Stands
Binoy Kampmark
The Priorities of General Motors: Ditching Holden
George Wuerthner
Trojan Horse Timber Sales on the Bitterroot
Rick Meis
Public Lands “Collaboration” is Lousy Management
David Swanson
Bloomberg Has Spent Enough to Give a Nickel to Every Person Whose Life He’s Ever Damaged
Peter Cohen
What Tomorrow May Bring
Peter Harrison
Is It as Impossible to Build Jerusalem as It is to Escape Babylon?
Weekend Edition
February 21, 2020
Friday - Sunday
Anthony DiMaggio
Election Con 2020: Exposing Trump’s Deception on the Opioid Epidemic
Joshua Frank
Bloomberg is a Climate Change Con Man
Jeffrey St. Clair
Roaming Charges: Billion Dollar Babies
Paul Street
More Real-Time Reflections from Your Friendly South Loop Marxist
Jonathan Latham
Extensive Chemical Safety Fraud Uncovered at German Testing Laboratory
Ramzy Baroud
‘The Donald Trump I know’: Abbas’ UN Speech and the Breakdown of Palestinian Politics
Martha Rosenberg
A Trump Sentence Commutation Attorneys Generals Liked
Ted Rall
Bernie Should Own the Socialist Label
Louis Proyect
Encountering Malcolm X
Kathleen Wallace
The Debate Question That Really Mattered
Jonathan Cook
UN List of Firms Aiding Israel’s Settlements was Dead on Arrival
George Wuerthner
‘Extremists,’ Not Collaborators, Have Kept Wilderness Whole
Colin Todhunter
Apocalypse Now! Insects, Pesticide and a Public Health Crisis  
Stephen Reyna
A Paradoxical Colonel: He Doesn’t Know What He is Talking About, Because He Knows What He is Talking About.
Evaggelos Vallianatos
A New Solar Power Deal From California
Richard Moser
One Winning Way to Build the Peace Movement and One Losing Way
Laiken Jordahl
Trump’s Wall is Destroying the Environment We Worked to Protect
Walden Bello
Duterte Does the Right Thing for a Change
Jefferson Morley
On JFK, Tulsi Gabbard Keeps Very Respectable Company
Vijay Prashad
Standing Up for Left Literature: In India, It Can Cost You Your Life
Gary Leupp
Bloomberg Versus Bernie: The Upcoming Battle?
Ron Jacobs
The Young Lords: Luchadores Para La Gente
Richard Klin
Loss Leaders
Gaither Stewart
Roma: How Romans Differ From Europeans
Kerron Ó Luain
The Soviet Century
Mike Garrity
We Can Fireproof Homes But Not Forests
Fred Baumgarten
Gaslighting Bernie and His Supporters
Joseph Essertier
Our First Amendment or Our Empire, But Not Both
Peter Linebaugh
A Story for the Anthropocene
Danny Sjursen
Where Have You Gone Smedley Butler?
Jill Richardson
A Broken Promise to Teachers and Nonprofit Workers
Binoy Kampmark
“Leave Our Bloke Alone”: A Little Mission for Julian Assange
FacebookTwitterRedditEmail