By Tim Henderson
In August of 2018, the California State Legislature passed Senate Bill 901 (also known as SB901).
This bill, designed to address the wildfire liability of public utilities, will dramatically increase the cost of electricity for customers throughout California.
As climate change continues to extend the severity and duration of the average fire, costs for ratepayers will only go up.
Here’s what you need to know about SB901, and how it may impact your bill in the coming months.
Last year, fires in the North Bay caused billions of dollars in liability, which threatened to push the utility giant over the financial edge.
SB901, signed into law by Governor Brown on September 21, 2018, seeks to save PG&E from bankruptcy and shift the state’s approach to utility liability in coming years. The bill also spells out fire prevention efforts, including clearing dead trees and imposing financial penalties against utilities that ignore safety standards.
Additionally, SB901 requires utilities commissions to conduct bankruptcy stress tests, which will determine how much financial liability PG&E could sustain after the 2017 fire season. Any costs beyond what the state deemed reasonable would be passed on to ratepayers. Currently, PG&E estimates that customers would pay an extra $5 per year for every $1 billion in issued bonds.
In essence, the bill shifts billions of dollars of wildfire-recovery costs from shareholders to PG&E ratepayers. It also allows PG&E to use state-authorized bond funds to cope with the financial liability incurred after California’s 2017 and 2018 fire seasons. Currently, the bond funds are slated to pay for more than 200 lawsuits filed against the utility.
California Senate bill 901 changed the way the law interprets the liability of utility companies whose equipment causes catastrophic wildfires. Not only is this troubling in relation to 2018’s fires, but it poses a problem for customers going forward.
Wildfires will only continue to worsen in the coming years, and climate change is pushing the duration and severity of the average fire further than ever before.
Factors like early snowmelt and rapid warming have led to hot, dry conditions that cause a significant spike in fire activity. In fact, experts estimate that even an average annual 1 degree Celsius temperature increase could increase burned acres per year by up to 600% in some parts of the country.
Once these fires start, hot temperatures, dry conditions, and areas of dense residential development can make them difficult to fight, leading to catastrophes like the 2018 Camp Fire.
As the average duration and frequency of fires increases, PG&E ratepayers can expect to shoulder much of the financial burden associated with recovering from them.
So, what’s the solution? Is there a way for ratepayers to escape paying for the liabilities of their utility?
Fortunately, the answer is yes, but it involves changing the relationship with public utilities themselves and installing one of the following, instead.
Solar panel systems can be tiny enough to charge a single battery, or large enough to run an entire factory.
When combined, battery storage systems and solar panels become much more functional and dynamic tools for reducing your electricity bill and providing energy security.
With batteries, solar panels can store the excess energy they produce, and use it to export energy when it is most valuable or provide backup power when the utility grid is down.
Solar battery storage has been popular throughout Europe for years and has recently become a sought-after power source for US homes and businesses, as well.
Microgrids are unique energy solutions designed to address the changing reality of energy delivery.
By providing enhanced energy stability, microgrids generate resilient, green, reliable power for people who don’t want to be chained to PG&E any longer.
Microgrids are free-standing systems made of solar panels, a solar battery backup, low-emission generators and specialized control systems.
Microgrids come in a variety of shapes and sizes and can power everything from small homes to a large commercial facilities.
Here at Sandbar Solar & Electric, we’re committed to empowering homes and businesses to take charge of their power.
As the PG&E grid continues to make moves that exploit ratepayers and make reliable power harder to access, Sandbar is here to help you identify alternative energy opportunities and find solutions that work for you.
Ready to learn more? Contact us today.
Tim has worked in the solar industry since 2008. He has a Master's Degree in Energy Resources Engineering from Stanford University. His years of experience include working on solar energy projects for both homes and commercial properties. Tim enjoys sharing his knowledge of this evolving industry and making a difference in his community.