Major wildfire liability bill signed into law

After surviving a heated Senate debate in mid-April, a bill codifying Montana’s wildfire liability law was signed by Gov. Greg Gianforte on May 13. 

“The main purpose of this bill is for the electric co-ops and public utilities to demonstrate their commitment to reducing fire risk by requiring wildfire mitigation plans,” bill sponsor Rep. Amy Regier, R-Kalispell, said at the legislation’s first committee hearing in February. “For wildfire mitigation plans to work and for utilities to continue to be able to deliver electricity, they need to prevent a standard of strict liability for wildfires from being established in Montana.”

Strict liability is a legal structure that enables a plaintiff to prove only that a defendant was responsible for an incident, regardless of whether the defendant’s behavior was negligent. In exchange for blocking a strict liability precedent, House Bill 490’s drafters — including NorthWestern Energy and Montana Electric Cooperatives’ Association — agreed that energy providers would maintain and “substantially” follow a wildfire mitigation plan, an outline detailing how a utility prevents wildfire.

The bill’s carrier in the Senate, Sen. Vince Ricci, R-Billings, argued that some Western states’ wildfire liability law has put an unfair burden on ratepayers by financially debilitating utility companies. 

“I’m certain that you’ve all read about the recent fires in California, Hawaii, Colorado and Oregon where utilities have faced a barrage of civil and criminal lawsuits from plaintiffs and insurance companies seeking billions of dollars in damages, including massive punitive awards. One California utility declared bankruptcy and laid off thousands of employees,” Ricci said as he introduced HB 490 in the Senate on April 10. 

A number of representatives from Montana’s electric cooperatives also defended the bill throughout its legislative journey, arguing the looming implementation of strict liability raised the cost of insurance, increased the price of mitigation efforts and limited rural service capacity. 

Meanwhile, representatives of the insurance industry worked to protect their ability to seek compensation from a utility after a utility-started wildfire destroys policyholder property, a process known as subrogation. 

Several failed amendments aimed to appease concerns from opponents including environmental groups and victims of the 2021 West Wind Fire. The state’s Public Service Commission, which oversees investor-owned utilities in Montana, also raised issues about its oversight role established in the bill.

On the Senate floor, Sen. Andrea Olsen, D-Missoula, said not enough amendments made it through.

“Every single opponent that came in brought with them actual amendments prepared, ready to go,” Olsen, a lawyer, said about the bill’s public hearing in the Senate Judiciary Committee on March 18. Olsen proposed three amendments in committee. None passed.

Olsen also said she believed the bill received a rushed hearing in late March. At the hearing, Olsen and committee chair Sen. Barry Usher, R-Laurel, engaged in a back-and-forth exchange over the number of questions each senator would be allowed to ask about the bill, another scene of tension between the pair this legislative session. On the Senate floor, Usher contended the committee “did a lot of good work” on the bill. 

Mike Weinheimer was one of two victims of the 2021 West Wind Fire that devastated the tiny town of Denton in central Montana to testify before the Senate Judiciary Committee.  He told the committee March 26 that the bill had dangerous impacts beyond strict liability.

“If this was purely about strict liability, this would be a one-page bill: ‘strict liability doesn’t apply to utilities in Montana.’ It’s not. It’s eight pages,” Weinheimer said, arguing Montana’s current statute over wildfire liability “applies to everyone equally” and “doesn’t give special treatment to utilities.”

On the Senate floor, Olsen moved an amendment to weaken language asserting a utility determined to have substantially followed their wildfire mitigation plan performed legally adequate prevention efforts.

“This amendment just says that we’re going to treat utilities like everyone else,” Olsen said. 

“These utilities aren’t asking just to be off scot-free,” countered Ricci. “And in the last big fire in Montana over by Denton, there were 150 plaintiffs, and only four have not been settled now.”

After the amendment was voted down roughly along party lines, Olsen called the bill a “corporate handout to utilities” in her final pitch against the legislation.

The bill otherwise received bipartisan support. Democrats Sen. Shane Morigeau, D-Missoula, and Sen. Susan Webber, D-Browning, both stood to testify in favor of the bill.

“The Montana American Indian Caucus supports this bill,” Weber said. “The rate impacts on utility customers and co-op members from unreasonable court judgment and increased insurance costs would have a significant impact on our tribal communities.”

HB 490 passed out of the Senate with six votes in opposition, all from Democrats.