California state lawmakers began debating Gov. Jerry Brown's proposal to ease utilities' wildfire liability with experts stating the current system for assigning liability is unsustainable for electric utilities and could drive them into bankruptcy. But they also warned that shifting the burden can have unintended consequences across the state, including making it more expensive and difficult to get property insurance or increases for ratepayers. Billions are at stake.
30 SECONDS - TAKE ME BACK.
When power-related equipment causes a fire, the utility that owns it must pay for the damage to homes and property, even if there was no negligence. Under the concept of "inverse condemnation," the government must provide fair compensation when it damages private property, regardless of fault. The courts apply this concept to privately owned public utilities as well. This California law is among the strictest in the nation holding utility companies liable for the cost of wildfires caused by their equipment.
GOT IT. WHAT ARE THE DETAILS?
Gov. Brown's proposal would allow courts to consider several factors before determining whether electric companies should be held strictly liable, including whether the company acted reasonably, if safety regulations were followed, and what else contributed to the fire. Currently, if a utility is negligent, its shareholders must foot the bill. Otherwise, it can pass the costs on to its ratepayers. Under Gov. Brown's proposal, the courts would have more flexibility to decide how much utilities should pay, potentially passing those costs on to property owners through premium increases and rate increases. The proposal also calls for new requirements for utilities to maintain their electrical infrastructure and harsher penalties.
WILDFIRES - THE NEW NORMAL
Unfortunately, last year marked California's most destructive wildfire season on record. Currently, California is battling over a dozen large wildfires. The largest and deadliest of the current wildfires, the Carr Fire, is now the sixth most destructive in California history. The Carr Fire was started by the mechanical failure of a vehicle; however, in recent years, electrical equipment or lines are among the three leading causes of wildfires in California. As we keep an eye on this, a huge thank you to the first responders risking their lives to protect people affected by the wildfires.
When It Rains, It Floods
President Donald Trump signed into law a four-month extension of the National Flood Insurance Program (NFIP) yesterday. The program was due to expire at midnight, July 31, but the Senate followed the House in approving an extension, the seventh short-term reauthorization. If an extension had not been approved, homeowners and business owners would not have been able to obtain new flood insurance policies or renew those that expired.
Efforts to reform the program have gained little traction. Some of the changes being discussed include flood-risk pricing, ending repeated payouts on flood-prone properties, and enticing private insurers to enter the market. The program covers more than 5 million households and collects more than $3 billion in premiums yearly. However, the program is more than $20 billion in debt. Claims in 2017 exceeded $8.7 billion. The program now expires Nov. 30. That'll be the height of football season - let's see if they punt again.
Making Our Way Around the Country
The Occupational Safety and Health Administration (OSHA) is seeking comments on a proposal to rollback its recordkeeping rule requiring larger companies to electronically submit detailed data on workplace injuries and illnesses. Citing concerns for employee privacy, the proposal would rescind the requirement for companies with more than 250 employees to electronically submit OSHA Forms 300 and 301. Comments are due by September 28, 2018.
The Texas Division of Workers' Compensation is asking for input on the development of a Neuromuscular Testing Referrals Plan-Based Audit, which will assess if a health care provider's decision to order neuromuscular testing was appropriate, medically necessary, and supported by recordkeeping. The audit will set the scope, methodology, selection standards, and program area duties as laid out in the Medical Quality Review Process. Comments can be emailed to OMA@tdi.texas.gov by 5 p.m. (CST) on Tuesday, August 14, 2018.
The WCI 73rd Annual Workers' Compensation Educational Conference is just over two weeks away. If you're considering attending, you won't regret coming a day (or two) early to participate in a day of service at Give Kids the World Village. Last year over 700 people participated in a wonderful day of giving back to kids and families who need to create lasting, unforgettable memories. It is truly my best day of the year. Come see why with us.