While devastating wildfires have become a more common occurrence in California’s recent history, 2018’s wildfire season saw the state setting new and disturbing records in both scale and casualties. Before state officials declared it completely contained on Nov. 25, the Camp Fire in Butte County northern California became the deadliest fire in the state’s history, with over 80 people confirmed dead and 18,804 structures destroyed. As of Nov. 27, over 600 people were still missing.
There are a variety of factors that contribute to California’s recent deadly cycle of wildfires, climate change being the main cause which is far beyond the control of the state. The Camp Fire nonetheless demonstrates very clearly how such events can be caused and then exacerbated by the lack of government oversight. Such oversight has been limited or even prohibited so as not to impede capitalist corporations in their drive for profit. Infrastructure to protect people from the worst effects of these disasters is a low priority..
Crises like these highlight the devastating shortcomings of the capitalist system — economic disparities, inadequate state response apparatus, and insufficient environment and land use regulations. For example, undocumented immigrants displaced by the fires were unable to access the food, clothing, and shelter provided by the Federal Emergency Management Agency (FEMA), while the Woolsey Fire in southern California burned down a closed nuclear and rocket engine testing site in Simi Valley, potentially releasing toxic pollutants into the air from contaminated soil, ash, smoke and dust.
While the details on how the Camp Fire began have yet to be determined, investigators and reporters alike have directed the spotlight towards the Pacific Gas & Electric Company. In their investigation of 2017’s wildfire season, the California Department of Forestry & Fire Protection found that at least 16 of the 21 fires they investigated were started by faulty or damaged equipment (including power lines) owned by PG&E. Regulators had already placed PG&E on probation in January 2017 as a result of their role in causing the 2010 San Bruno Pipeline explosion, which claimed eight lives and injured dozens more when an improperly installed pipeline burst.
Not counting the human cost, Citigroup has estimated that PG&E could be liable for upwards of $15 billion in damages as a result of the Camp Fire, if they are found at fault, on top of their existing $15 billion liabilities in connection with the 2017 wildfires. PG&E’s liability insurance for 2018 amounted to $1.4 billion (which is less than the $1.6 billion fine that PG&E paid in connection with the San Bruno explosion). Financial analysts seem to agree that in order to recoup some of these immense losses, PG&E will seek to raise rates and pass the costs onto customers instead of shareholders.
In an attempt to prevent this from happening, state lawmakers last year chose to protect PG&E and other utility companies by drafting Senate Bill 901. SB 901 which protects privately-owned utility companies in the state from “excess financial burden” by applying a “stress test” to determine the maximum amount for which these companies can be held liable in a given year in order to maintain financial solvency. But what happens to the excess liability that the companies are deemed unable to cover?
Under SB 901, they will be able to issue bonds to repay them — bonds that would eventually be paid for via rate hikes for customers. While its proponents argued that SB 901’s purpose was simply to prevent rates from going up, the truth is clear. California lawmakers are more interested in protecting shareholders than they are in holding negligent corporations accountable for loss of life and communities devastated in these wildfires.
While SB 901 has already been signed into law, it only covers fires that happen from 2019 onward as well as fires from 2017. But what of this year’s fires? Analysts at Moody’s say: “It is our expectation that regulators will utilize the tools or framework outlined in S.B. 901 to address any potential 2018 wildfire-related costs.” So, PG&E’s shareholders may very well see themselves bailed out by the state yet again, and the utility may continue to operate with very few ramifications for these disasters that are seemingly becoming the norm.
It is time for state regulators to do more than give a few slaps on the wrist here and there. It’s time for the politicians in Sacramento to remember that they supposedly represent the interests of the thousands of families that have lost homes and loved ones due to PG&E’s profit-driven negligence.
While PG&E is certainly the most flagrant example of negligence, regulators in the California Public Utilities Commission and the representatives in Sacramento have a duty to the people of the state to hold privately-owned utilities to a higher standard. These companies can no longer scrape by and spend the bare minimum on maintenance. They can no longer just wait for their neglected equipment to break down and spark another wildfire that may claim 80 more lives and entire towns. It is time for California to reign them in and force the private utilities to do the work of maintaining their infrastructure to keep its residents safe. We must force them to put people before profits.
