Alaska: NAMIC Testifies in Opposition to Electric Utilities Wildfire Liability Immunity Bill

HB 227, an act relating to liability of an electric utility for contact between vegetation and the utility’s facilities, was heard in the House Committee on Energy last week. The bill sponsor is also chair of the special House Energy Committee, so the bill passed out of committee, as expected.

The legislation states, “[a] utility offering electrical service to the public for compensation … may not be held liable for costs, property damage, death, or personal injury resulting from contact between vegetation and the utility’s facilities if the vegetation is located or originated outside the boundaries of the utility’s real property, lease, permit, easement, or right-of-way.” [Emphasis added]

NAMIC testified before the committee in opposition to the legislation because it would create a moral hazard for citizens of the state by granting electrical utilities immunity for certain types of wildfires and would seriously impact an insurer’s ability to pursue legal subrogation against an at-fault electrical utility, whose negligence may be the direct and proximate cause of a wildfire that destroys private property. During NAMIC’s testimony, the association provided several factual scenarios to illustrate the problem of granting immunity based upon the location of the vegetation as opposed to focusing upon whether the utility complied with its legal duty of care under the circumstances.

NAMIC also provided written testimony stating, “the proposed legislation is really nothing more than a ‘cost-shifting’ of liability from electrical utilities to homeowner, citizens, and other businesses in the state.”

The bill has now been assigned to the House Judiciary Committee for consideration. NAMIC will coordinate with our members and trade allies in outreach to these committee members to oppose the bill.