Problems in Paradise

Presented by

With help from Wes Venteicher and Alex Nieves

PARADISE STILL LOST: Five years after California’s deadliest and most destructive wildfire, Butte County residents are still trying to recover.

People want to return to Paradise, which lost more than 90 percent of its residents and 11,000 homes in November 2018’s Camp Fire. They also want to make their homes more resistant to fire. The problem is insurance.

“We feel a little crazy,” said Jen Goodlin, executive director of the Rebuild Paradise Foundation, which helps people navigate the resettlement process. “We’re eliminating a lot of risk, but we’re getting hit really hard. It’s knocking away affordability entirely.”

Goodlin spearheaded the creation of Paradise’s first Firewise community, a national designation of fire-hardiness that some insurance companies will recognize with discounts. But it’s just not working, she said.

Frustrated residents swap stories about rate hikes of up to tens of thousands of dollars a year despite their best efforts to clear vegetation and build to modern fire codes. Some families have had new homes fall out of escrow because the insurance companies significantly upped their quotes in the middle of the process, said Melissa Crick, a local Habitat for Humanity board member. Many have ended up with limited coverage from the last-resort insurer in the state, the California FAIR Plan.

Paradise’s economic development director, Colette Curtis, has asked the state to let insurers use forward-looking models when they set rates that better account for fire danger as well as any mitigation by residents. “Having affordable and available insurance is absolutely vital for our community,” she said. “Without it, we will not recover.”

Officials are optimistic about Insurance Commissioner Ricardo Lara’s plan to let insurers use the models in exchange for guarantees to keep writing policies in fire-prone areas. But they say more is needed.

“The emergency regulations that were announced by the governor and the insurance commissioner were good,” Assemblymember James Gallagher (R-Yuba City), who represents Butte County, said at a Capitol press conference today. “I think those were a long time coming and probably should have happened a couple of years ago. But there’s still more.”

FAIR OR NOT: The problem goes well beyond Paradise. The FAIR Plan announced Wednesday that it now covers 330,100 properties — a 21 percent increase since the beginning of the year and more than a doubling since 2018.

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LET’S LINK: Washington state regulators today issued a preliminary decision to pursue a link with California and Quebec’s joint carbon market.

Washington launched its cap-and-trade program (though it calls it “cap and invest”) in January, making it the second state to create an economywide carbon market after California created one in 2013 (and then joined with Quebec in 2014).

Some environmentalists are excited. “There’s a lot for California and Quebec to gain from linking with Washington,” said Katelyn Roedner Sutter, Environmental Defense Fund’s California state director. A larger market would be more efficient and have more stable prices, she said.

The states’ programs aren’t fully aligned: Washington’s market is more stringent than California’s, with stronger emissions targets and higher credit prices. Washington was also the first state to pair cap and trade with a regulatory air quality program to try to address environmental justice groups’ concerns about the potential for emissions trading to increase local pollution.

Rulemaking currently underway at the California Air Resources Board could make it easier to link with Washington, depending on how far regulators go to reduce the number of credits in California’s allowance pool, Roedner Sutter said. Washington could also move closer to California through changes to how it manages its pool of higher-cost credits and the number of credits it gives away to industry.

The ball is in California’s and Quebec’s court to make their own decisions about linking with Washington. Meanwhile, Washington’s Department of Ecology will consider requesting legislation to amend its program to better facilitate linkage. A formal marriage wouldn’t happen until at least 2025.

FIXING FOR A CHARGE: A group of 22 lawmakers is asking the Public Utilities Commission to ease up on a controversial proposal to add a new charge to Californians’ electric bills.

It was the Legislature that ordered the PUC in last year’s AB 205 to authorize a fixed charge on residential bills by July 2024. The idea, championed by University of California, Berkeley, professor Severin Borenstein, was that a monthly charge varying with income would make utility bills fairer. Wealthier people would pay a higher flat fee, while everyone would pay less for each kilowatt of electricity they use.

Problems arose. For one, there’s no easy, noninvasive way to verify electricity customers’ incomes. The most obvious alternative is to create two groups: those who already are enrolled in low-income programs (earning up to $75,000 per year with a family of four), and everyone else.

But in that case, anyone who makes just above the threshold gets stuck with an unfairly high charge on their bill, lawmakers said in their Friday letter, led by Assemblymember Jacqui Irwin (D-Thousand Oaks).

They also raised concerns that the proposal could discourage people from saving electricity. And if they don’t conserve electricity, the threat of rolling blackouts could increase, the lawmakers said.

Among the proposal’s supporters is the PUC’s Public Advocates Office, which has pushed back on the idea that people will conserve less under a fixed-charge model.

“The letter indicates that there is some confusion among legislators about how an income-graduated fixed charge works,” said Matt Baker, the office’s director, in a text. “We look forward to meeting with the signatories of the letter to clean up any of these misconceptions.”

NO EMISSIONS, NO PROBLEM: We wrote in September about how officials from 25 cities were pushing Gov. Gavin Newsom to adopt a statewide zero-emission building standard. Now they’re getting backup from some of the state’s biggest environmental justice groups.

Representatives from more than 60 organizations penned a Thursday letter to Newsom, urging him to direct state agencies to adopt zero-emissions policies through the California Green Building Standards Code. That 2007 law, they argue, gives the administration the power to immediately create a mandatory zero-emission requirement for new construction.

The California Energy Commission, Air Resources Board and regional air districts are all exploring zero-emission policies, but city leaders and environmental groups argue these regulatory processes can take years, allowing more fossil fuel infrastructure to be built in the meantime.

RECYCLED WATER BAPTISM: Rep. Grace Napolitano (D-Calif.) can add naming one of California’s most groundbreaking drought-resilience projects to her resume. The Metropolitan Water District dedicated the Grace F. Napolitano Pure Water Southern California Innovation Center today in recognition of the San Gabriel Valley lawmaker’s efforts to fund large-scale water recycling. Met’s recycling project, called Pure Water Southern California, is currently in demonstration mode but could deliver water to 1.5 million people starting in 2032.

SITE OF THE FUTURE: Another drought-resilience project inched closer to completion today, this time in Northern California. Federal and local officials released their final environmental report analyzing the impacts of the proposed Sites project, which would store water from the Sacramento River in an off-stream reservoir. The project would increase Northern California’s water storage capacity by 15 percent and use funds from a bond passed by state voters in 2014 as well as the federal Inflation Reduction Act. But it’s still years away from construction.

— Imperial Valley spends the money it makes from San Diego water sales on making its farms more efficient.

— In an era of permitting challenges, a new study from UC Berkeley’s Haas School of Business finds that the U.S. can double transmissions capacity singly by upgrading its conductors.

— Wildfire smoke causes 4,000 deaths in the U.S. a year, says another new study, and the toll is heaviest in California.