Utilities Eye Second Chance at Bill for Wildfire Immunity

Arizona’s largest electricity provider, Arizona Public Service Co. (APS), along with other utilities, will have another opportunity on Monday to persuade lawmakers to pass legislation that would protect them from significant liability if their equipment ignites a wildfire.

The proposal faced a setback last week, failing to pass with a vote of 32-28 due to concerns surrounding the extent of immunity offered to utilities. Many insurance companies and trial lawyers oppose the bill, arguing it would severely limit the ability of homeowners and insurers to seek restitution for damages caused by wildfires linked to utility activities.

Modifications to the proposed liability protections are expected, as lawmakers who initially opposed the measure call for changes to make it more palatable. Specific amendments will be revealed before the upcoming session.

Supporters, including APS, point out that the legislation requires utilities to develop wildfire mitigation plans, which must be submitted to regulators. These plans would mandate that utilities identify potential wildfire risks and collaborate with state and federal fire management officials.

However, critics emphasize the absence of mandated standards for these mitigation plans. They note that once filed, the plans could receive automatic approval, allowing utilities to claim adherence to safety standards without stringent oversight.

This legislative effort comes at a time when utilities in California and Oregon have faced substantial lawsuits after devastating wildfires traced back to their infrastructure. Arizona’s utilities are wary of facing similar legal repercussions.

The legislation introduces provisions perceived by opponents as further insulating utilities from liability for fire-related incidents. Notably, it would prohibit affected individuals from filing class-action lawsuits and raise the burden of proof necessary to hold utilities accountable.

Rep. Walt Blackman, who voted against the original bill, expressed concerns over its provisions limiting legal recourse for wildfire victims. He emphasized that many constituents in his district have faced challenges in filing claims after recent wildfires.

Some conservative members of the legislature echoed Blackman’s concerns, while others voiced apprehensions regarding constitutional protections against limiting the right to sue. Rep. Alex Kolodin highlighted potential violations of a state constitutional provision aimed at safeguarding citizens’ litigation rights.

APS lobbyist Michael Vargas defended the bill, asserting that it merely clarifies liability regarding approved wildfire management plans. He emphasized that APS would remain accountable for any faults that contribute to wildfire incidents.

In addition to APS, Tucson Electric Power and Salt River Project have expressed support for the proposal. The measure has also garnered backing from various unions and local officials in rural communities.

Conversely, Barry Aarons, representing the Arizona Trial Lawyers Association, challenged claims that the bill would facilitate clarity about power company liability. He lamented that the legislation would, in effect, restrict access to judicial recourse.

Insurance representatives reiterated concerns about shifting liability from utilities to homeowners and businesses. They characterized the proposal as an aggressive attempt to limit accountability for utilities involved in wildfire incidents.

If the bill is enacted, recovering losses from utilities following fire damage may become significantly more challenging, as underscored by lobbyist Marc Osborn, who represents several major insurance companies.