On August 31, 2018, California’s legislature passed Senate Bill 901, which includes a bundle of measures focused primarily on wildfire prevention and emergency response. Its provisions range from the appropriation of funds for efforts relating to forest health, fire prevention, and fuel reduction, to a controversial measure that could allow utilities to pass along certain wildfire-related costs to ratepayers. Governor Brown signed SB 901 into law on September 21, 2018.
Background
California adopted SB 901 in the midst of yet another devastating wildfire season. The bill was introduced by Senator Bill Dodd, which represents some of the state’s counties hardest hit by wildfires in recent years, including Napa and Sonoma Counties. SB 901 was one of a number of wildfire-related bills signed by Governor Brown, as summarized in a September 21, 2018 press release from the Office of Governor. [https://www.gov.ca.gov/2018/09/21/governor-brown-signs-legislation-to-strengthen-wildfire-prevention-and-recovery/] With respect to SB 901, Governor Brown is quoted as stating:
- Wildfires in California aren’t going away, and we have to do everything possible to prevent them. This bill is complex and requires investment—but it’s absolutely necessary.
Summary of SB 901
Key provisions of SB 901 include several provisions summarized below.
Funding for Wildfire Prevention and Response
This section applies $25 million in previously appropriated funds to support activities directly related to regional response and readiness. Provides for two separate additional appropriations—one for $165 million and another for $35 million—to be made in each Budget Act through the 2023-24 fiscal year from the Greenhouse Gas Reduction Fund to CalFire, each for separately identified purposes relating to forest health, fire prevention, and fuel reduction.
New Requirements for Conservation Easements
This section requires (with certain limitations) that for any conservation easement comprised of forest lands that is purchased with state funds on or after January 1, 2019, the landowner must agree to maintain and improve forest health through certain measures such as promotion of more natural tree density, species composition, structure, habitat function and retention of larger trees.
Quantification of Carbon Emissions from Fuel Reduction Activities
This section requires the California Air Resources Board, in consultation with CalFire, to develop a standardized approach to quantifying the direct carbon emissions and decay from fuel reduction activities in order to meet the accounting requirements for expenditures from the state’s Greenhouse Gas Reduction Fund and prepare a report that assesses greenhouse gas emissions associated with wildfire and forest management activities.
Creation of Wildfire Resilience Program
This section requires CalFire to create a program to assist nonindustrial timberland owners with wildfire resilience efforts by providing technical assistance on certain topics, including helping applicants to navigate the permitting process.
Modifications to Z’berg-Nejedly Forest Practice Act of 1973 Requirements
This section provides for modifications to and/or the addition of certain exemptions and exceptions to the Z’berg-Nejedly Forest Practice Act’s requirements relating to various forest management activities and requires the state forestry board to adopt regulations implementing minimum fire safety standards that are applicable to lands classified and designated as very high fire hazard severity zones.
CEQA Exemption for Certain Management Activities
This section provides that, until January 1, 2023, under specified conditions, the California Environmental Quality Act (CEQA) would not apply to prescribed fire, thinning, or fuel reduction projects undertaken on federal lands to reduce the risk of high-severity wildfire that have been reviewed under the federal National Environmental Policy Act of 1969 (NEPA). The bill would also provide that CEQA would not apply to the issuance of a permit or other project approval by a state or local agency for these fire, thinning, or fuel reduction projects.
New Commission on Catastrophic Wildfire Cost and Recovery
This section establishes, within the Office of Planning and Research (OPR), a Commission on Catastrophic Wildfire Cost and Recovery to evaluate and make recommendations on matters relating to the costs and damage associated with catastrophic wildfires, including recommendations for changes to law to ensure equitable distribution of costs among affected parties.
Recovery of Wildfire Costs and Expenses Incurred by Utilities
This section prohibits electrical corporations from recovering a fine or penalty through a PUC-approved rate but would authorize the Public Utilities Commission (PUC), in an application by an electrical corporation to recover costs and expenses from a catastrophic wildfire, to allow cost recovery if the costs and expenses are “just and reasonable.”
SB 901 Requirements for Utilities
SB 901 incudes several provisions applicable to utilities including additional requirements relating to wildfire mitigation plans, including preparation of mitigation plans by local publicly owned utilities and cooperatives and would require local publicly owned utilities and electrical cooperatives to implement mitigation measures if overhead electrical lines and equipment are located in an area that has a significant risk of wildfire resulting from those electrical lines and equipment.
Allowance for Rate Reduction Bonds
Under specific circumstances, authorizes the PUC, upon application by an electrical corporation, to issue financing orders to support the issuance of recovery bonds to finance costs, in excess of insurance proceeds, incurred, or that are expected to be incurred, by an electrical corporation, excluding fines and penalties, related to wildfires, as specified.
Fuel and Feedstock Requirements
This section expands fuels and feedstocks that are eligible to meet the wildfire risk reduction fuel and feedstock requirements of the California Renewables Portfolio Standard Program. Requires certain electrical corporations, local publicly owned electric utilities, and community choice aggregators with contracts to procure electricity generated from biomass to seek to extend or renew such contracts, as long as they follow the feedstock requirement.
Conclusion and Implications
California experienced in 2018 extensive wildfires with some record breaking. Governor Brown ties these in part to climate change and expects this to be a new normal for the state. SB 901 was designed to address these costly and menacing “new normal” occurrences. More detailed information regarding SB 901 is available at the following location: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB901
(Nicole Martin)
