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Idaho regulators reject utility's bid to limit liability for wildfire damages

FILE - Fire damage is seen, Sept. 12, 2020, in Mill City, Ore.
Gillian Flaccus
FILE - Fire damage is seen, Sept. 12, 2020, in Mill City, Ore.

The Idaho Public Utilities Commission turned down a request last week from an electric company that wanted to limit its responsibility for future wildfire damages.

Portland-based PacifiCorp, which serves about 90,000 Idaho customers through Rocky Mountain Power, asked the commission last fall to approve an update to its terms of service.

The proposed changes would have made the company only liable for “actual economic damages,” excluding other types like noneconomic, punitive or incidental damages.

PacifiCorp faces legal trouble after a jury found it grossly negligent for the 2020 Labor Day wildfires in Oregon, which destroyed over 4,000 homes. Victims have been awarded hundreds of millions of dollars, with potential forthcoming damages totaling more than $30 billion. Many claims are for noneconomic losses like pain and suffering.

PacifiCorp said in its application to the Idaho PUC that its credit rating has fallen since the lawsuits, driving up its borrowing costs and hindering its ability to invest in critical infrastructure upgrades and renewable energy projects. Though wildfires inspired the request, it would apply to any harm caused in the process of delivering electricity.

The company said limiting the liability it faces from future disasters will help it serve customers electricity at reasonable rates. It made nearly identical requests in Washington, Oregon, California and Wyoming, but Idaho’s commission was the first to reach a decision.

The three-member board in Idaho found that it wouldn’t be “fair, just, nor reasonable” to reduce PacifiCorp’s liability, especially given that the proposal would have allowed the utility to avoid paying noneconomic damages even in cases where it was negligent.

The commission emphasized that, regardless of whether the proposal excluded cases of negligence, it still maintains that it wouldn’t benefit the public to limit the liability of a monopoly providing a public service. Additionally, it wasn't convinced by PacifiCorp's argument that the change would improve the company's financial standing.

PacifiCorp contends that its proposal balanced safety and affordability, wrote spokesperson David Eskelsen in an email. Customers would still be compensated for property damage, he said, and the measure would not apply to ongoing litigation. The company hasn’t decided if it will ask the Idaho PUC to reconsider.

Rose Monahan, an attorney for the Sierra Club who filed comments opposing PacifiCorp’s request, applauded Idaho’s decision.

She said increasing wildfire liabilities for utilities is a significant issue across the West, but broadly exempting companies from responsibility doesn’t make the costs go away.

“They just get shifted from the utility to the wildfire victim,” she said.

Instead, Monahan said, utilities should be incentivized to manage wildfire risks and transition to clean energy.

“Those wildfire liabilities,” she said, “are a direct result of utilities refusing to account for the externalities of burning fossil fuels,” calling PacifiCorp’s request “ironic,” as the utility recently delayed phasing out its coal plants in Wyoming and Utah.

This year, PacifiCorp successfully lobbied the legislature in Utah to pass a law that caps liability for pain or suffering caused by a wildfire to $450,000, and Monahan said utilities could seek legislative remedies in other states going forward.

Find reporter Rachel Cohen on X @racheld_cohen

Copyright 2024 Boise State Public Radio

I cover environmental issues, outdoor recreation and local news for Boise State Public Radio. Beyond reporting, I contribute to the station’s digital strategy efforts and enjoy thinking about how our work can best reach and serve our audience. The best part of my job is that I get to learn something new almost every day.

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