Senate Poised to Tone Down Wildfire Regulation Bill, Easing Controversial Provisions

The Arizona House recently passed a significant measure that protects utilities like Arizona Public Service (APS) and Tucson Electric Power (TEP) from lawsuits related to wildfire damage caused by their equipment. However, during a state Senate committee hearing on Monday, key provisions of the bill are set to be amended, according to committee chairman Sen. J.D. Mesnard, R-Chandler.

Mesnard revealed that the proposed amendments will eliminate a provision requiring plaintiffs to demonstrate “clear and convincing” evidence of utility fault in wildfire lawsuits. This standard is notably more rigorous than the typical burden of proof in similar cases.

Additionally, the amendment will lift a ban on recovering consequential damages, which encompasses lost business income and costs associated with renting vehicles destroyed by wildfires.

“This is a fair adjustment,” Mesnard stated, emphasizing the importance of accessible recourse for victims.

The revised bill will still grant utilities substantial protections, contingent upon the implementation of new “wildfire mitigation plans.” These plans are a requirement if HB2201 is to be enacted. However, amendments will remove the provision allowing utilities immunity for merely “substantially complying” with these plans, addressing concerns about accountability.

Furthermore, utility plans will now need oversight from the state Department of Forestry and Fire Protection, rather than being self-approved by utility companies. Mesnard criticized the previous self-approval system, suggesting it undermined public trust.

“The concept of a utility approving its own safety measures raised significant concerns,” he explained. “There must be an external authority involved.”

This change aims to ensure that utilities adhere to safety protocols, such as clearing vegetation along power lines. Before the amendments, victims had to prove utility liability beyond a high threshold, despite potential non-compliance with safety measures.

House lawyers flagged legal issues with the initial version of the bill, particularly its potential conflict with state constitutional provisions that protect individuals’ rights to sue for damages. Mesnard’s proposed tweaks aim to rectify these legal concerns.

In discussions with APS lobbyists and opponents, including representatives from the insurance industry, Mesnard emphasized the need for mutual agreement to advance the legislation.

An APS spokesman expressed support for the revised measure, while TEP’s representative welcomed the clear guidelines it offers for wildfire risk management.

Contrarily, opponents, including insurance lobbyists, argue that the initial bill’s provisions were too lenient on utilities, significantly restricting the ability of homeowners and insurers to claim damages.

“It is much improved,” remarked Marc Osborn, a lobbyist for major insurance companies. He underscored the necessity of holding utilities accountable for wildfire risks, emphasizing that such frameworks have prompted other utilities, like PG&E, to take proactive measures against fire hazards.

If approved by the Senate committee, the bill will progress to the full Senate, then return to the House for final adjustments before reaching Governor Katie Hobbs for her approval.