News for those who live, work and play in the Santiam Canyon

PUC rejects PacifiCorp request for lawsuit limits

State regulators have denied a request by PacifiCorp to significantly limit customer lawsuits, calling the proposal overbroad and saying benefits to the company would not outweigh risks to consumers.

On May 30, the Oregon Public Utility Commission (PUC) filed an order rejecting and permanently suspending the company’s request to add a limited liability clause to its contract for services.

The proposal, filed Oct. 24, 2023, would only allow customers to sue the company for “actual damages” resulting from the use of electric services. This would bar all noneconomic and punitive damages, and damages resulting from wildfires.

PUC said these limits on damages were the main reason they denied the request, citing protections in the Oregon Constitution guaranteeing access to legal remedies. They also cited a state law allowing special noneconomic damages for wildfires caused by gross negligence and willful misconduct, and said the courts have a history of protecting this class of damages.

PacifiCorp was found to have committed gross negligence and willful misconduct during a civil trial in 2023 over the 2020 Labor Day fires, including the Santiam Fire. Following this verdict the company’s credit rating dropped two points and it said in the October filing it needed the liability clause in part to protect its ability to borrow at competitive rates.

PUC said PacifiCorp failed to demonstrate how increasing its financial resiliency through liability limits would be an adequate “quid pro quo” exchange for limiting consumer protections.

The commission also pointed out the liability clause would only apply to existing PacifiCorp customers, and non-customers and former customers would essentially become a different class of litigants. PUC said this could lead to confusion, for instance if a renter was harmed by PacifiCorp but their landlord was the customer, or if a customer discontinued service before they filed suit.

Additionally the commission said the liability clause was so overbroad the courts were likely to narrow the scope of the proposed language if it was approved. And because the proposal was generic, PUC said the invalidation of one part of the rule could render the entire clause unenforceable.

PUC acknowledged a need for some form of liability limitation for energy companies amid increasing wildfire risks, but said PacifiCorp’s proposal was not the place to start.

“Public policy and regulatory solutions to the problem of unbounded wildfire liability are urgently needed,” said PUC. “We are not, however, persuaded that accepting PacifiCorp’s [proposal], at this time and in this form, is a reasonable first step to solving that problem.”

The commission said they were open to considering a revised proposal that addressed their concerns and which provided greater clarity and specificity. PUC also said they would be open to a legislative solution that impacts all Oregon utilities and customers and balances the needs of electric companies, consumers and fire survivors.

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