HECO-Backed Bill Would Help Protect Utilities From Litigation Over Wildfire Damage
Utilities, insurers, large landowners and the state would pay into a “wildfire relief fund” to help pay for property damage claims.
Two state House committees advanced a bill on Friday to create a fund that would help shield large property owners, utilities such as Hawaiian Electric and the state from lawsuits over property damage caused by future wildfires.
Several lawmakers expressed misgivings about the bill, in part because of concerns about how much the state would be expected to kick in to help launch the fund.
House Speaker Scott Saiki said he introduced at the request of Hawaiian Electric, but said Friday there are many unanswered questions about the measure. For example, the bill as introduced leaves blank the amounts that both HECO and state taxpayers would contribute to the fund.
The proposed legislation comes six months after the deadly Maui wildfire that killed at least 100 people, and destroyed much of Lahaina. It is still unclear exactly what impact that disaster will have on HECO, which is the target of dozens of lawsuits that blame the utility for the fire. HECO denies it was to blame.
The bill explains that wildfires can trigger litigation that imposes “massive costs, including on the State, counties, utilities, landowners, and other defendants that may be alleged to have contributed to catastrophic wildfires.”
“Such costs can overwhelm these major institutions of the community, undermining their ability to make investments that the State needs,” according to the bill.
The measure would create a “Wildfire Relief Fund” to accept contributions from the state and other governmental entities, from electric utilities and other types of utilities, and from insurers and private landowners with more than 1,000 acres. The size of those contributions are unspecified in the bill.
At the Legislature, measures are often introduced without specific appropriation amounts, leaving them open to negotiation.
In the event of a wildfire, the fund would pay claims for property damage from wildfires that are not covered by insurance. However, people who suffer wildfire property damage would be barred from suing the contributors to the fund for losses that could instead be recouped from the fund.
Insurers could also file claims with the fund after a wildfire to recoup some of the money they had to pay out in claims. However, the bill does not specify how much the insurers could collect from the fund.
The bill as introduced specified that the contributions to the fund from an investor-owned utility such as HECO “shall be recovered from its customers in rates” unless the state Public Utilities Commission “directs otherwise.”
Jason聽Benn, HECO’s senior vice president聽and chief Information officer, told the House committees Friday he did not know how HECO’s potential contributions to the fund would affect electric rates on Maui, the Big Island, Oahu, Molokai and Lanai.
Michael Angelo, executive director of the state Division of Consumer Advocacy, said his office opposes the bill “in its current form” because it would require the ratepayers to reimburse the utility for those contributions.
House Water and Land Committee Chairwoman Linda Ichiyama then announced her committee and the House Consumer Protection Committee were amending the bill to prohibit the utility from charging ratepayers to recover the money it contributes to the fund.
HB 2700 now goes to the House Judiciary and Hawaiian Affairs Committee for further consideration.
