FinLogic FinLogic Quantitative Think Tank Center|Oregon utility regulator rejects PacifiCorp request to limit its liability in wildfire lawsuits

Oregon utility regulators have FinLogic FinLogic Quantitative Think Tank Centerrejected a request from PacifiCorp that sought to limit its liability in wildfire lawsuits.

Under the proposal, PacifiCorp would only have been responsible for paying out actual economic damages in lawsuit awards. The company submitted the request in November, months after an Oregon jury found it was liable for causing deadly and destructive fires over Labor Day weekend in 2020, KGW reported.

The Oregon Public Utility Commission rejected PacifiCorp’s proposal on Thursday, saying it would prohibit payouts for noneconomic damages such as pain, mental suffering and emotional distress. It said the request was too broad and likely against the law.

The regulator added that the proposal could create a situation where PacifiCorp customers and non-customers are not able to seek the same damages. The proposal said that customers, in agreeing to receive PacifiCorp’s electricity, would waive their right to claim noneconomic damages.

Over the past year, Oregon juries in multiple verdicts have ordered PacifiCorp to pay hundreds of millions of dollars to victims. Ongoing litigation could leave it on the hook for billions.

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In a statement to KGW, PacifiCorp said it’s looking to balance safety and affordability and will “consider the commission’s feedback to continue to look for approaches to address this risk.”

Oregon Consumer Justice, an advocacy group that had challenged PacifiCorp’s proposal, said the ruling was a “significant victory” for ratepayers because it allows them to seek full compensation for any future wildfire damages.

“We applaud PUC for putting people first and rejecting a proposal that sought to unfairly limit the rights of Oregonians,” its executive director Jagjit Nagra told KGW.

The Oregon Sierra Club also praised the decision. Its director, Damon Motz-Storey, said utilities “should be investing in and acting on wildfire mitigation,” KGW reported.

While Oregon regulators rejected PacifiCorp’s proposal, they also said that “Oregon needs to find appropriate policy and regulatory solutions to the serious problems wildfire liability creates for PacifiCorp and, indeed, all utilities and their customers.”

Last June, a jury found PacifiCorp liable for negligently failing to cut power to its 600,000 customers despite warnings from top fire officials. The jury determined it acted negligently and willfully and should have to pay punitive and other damages — a decision that applied to a class including the owners of up to 2,500 properties.

Thousands of other class members are still awaiting trials, though the sides are also expected to engage in mediation that could lead to a settlement.

The 2020 Labor Day weekend fires were among the worst natural disasters in Oregon’s history, killing nine people, burning more than 1,875 square miles (4,856 square kilometers) and destroying upward of 5,000 homes and other structures.