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PG&E-friendly wildfire bill being prepared by lawmakers in wake of lethal fires

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Re: PG&E-friendly wildfire bill being prepared by lawmakers in wake of lethal fires

#71

Post by happertiger »

bluejekyll wrote: post #26
tathougies wrote: post #15

Earlier quoted context omitted.

Fire insurance, like earthquake and flood insurance, does not work because of the scope of damages. Insurance works by pooling risk and taking income from low risk areas to pay for high risk ones. Due to the scope of wildfires, fire insurance is untenable. The solution to this fire is absolutely to blame pg and e and its custoners (yes this includes me). This is the logical conclusion. The only thing preventing us fr…

> The solution furthermore is to legislate to remove the barriers to competition that California has set up. While I think you’re generally on point, this misses the mark a bit. We don’t want more transmission lines running in CA, right? We don’t want lots of little companies increasing the risk of fire by managing lines independently and the one that’s losing then doesn’t have the means to maintain those lines. We m…

No that’s exactly what we want. We want the free market to create efficiency without entrenched regulation, which could lead to some short-term increase in risk. But what you really want is to price in the risk, and the only way to do that is to remove government protections of individual corporations so that the free market can operate. Little companies increasing the risks of fire is a misnomer because competition and a truly free market would crush those companies and eliminate that problem faster than you could think of a solution. It’s only when you entrench a bureaucracy that you end up with problems like PG&E - a company that doesn’t have to deal with real consequences because it’s political connections will protect it.

What your describing sounds fantastic and is politically expeditious because there is less risk in backing the prevailing methodology, but it is not improvement.

Competition in transmission is good, because alternatives like alternative energy would completely displace these systems and technology advancements would be available and legal - unlike the current insanity.

You know how you can’t put in an oversized solar system and sell power back to the grid, even if you can afford to? Did you notice that the grid is super inefficient because it’s got a limited number of highly centralized generation sources? No? Well that’s the consequence of ownership of the transmission lines. If you own the last mile you own the network. And if you also own the politicians who can protect your last mile interests, why would you invest in change?

Re: PG&E-friendly wildfire bill being prepared by lawmakers in wake of lethal fires

#72

Post by happertiger »

saltedonion wrote: post #21
tathougies wrote: post #15

Earlier quoted context omitted.

Fire insurance, like earthquake and flood insurance, does not work because of the scope of damages. Insurance works by pooling risk and taking income from low risk areas to pay for high risk ones. Due to the scope of wildfires, fire insurance is untenable. The solution to this fire is absolutely to blame pg and e and its custoners (yes this includes me). This is the logical conclusion. The only thing preventing us fr…

Can you explain why wild fire insurance is not tenable? Here in Canada all home insurance include wildfire insurance. All insurers have to do is to pool risk and diversify across geography. No way only California has homes near forests? There’s also reinsurers to pool even more risk.

With all respect I don’t see how this changes anything but shifting who pays.

How is it better to pool risks to the group rather than the individual paying a for that risk? The US already has a huge problem with coastal real estate and federal insurance of coastal developments. Why would we introduce that at scale?

Why should the collective pay for individual choices? It’s not like the society got together and made people move into fire prone areas.

I am not trying to draw parallels to health insurance which has many ethical questions that drive deep consideration, but I don’t understand why asking for the group to insure individual risk that is fundamentally founded in individual choice is in any way necessarily better?

Re: PG&E-friendly wildfire bill being prepared by lawmakers in wake of lethal fires

#73

Post by PeterisP »

Mikeb85 wrote: post #31
saltedonion wrote: post #21

Earlier quoted context omitted.

Can you explain why wild fire insurance is not tenable? Here in Canada all home insurance include wildfire insurance. All insurers have to do is to pool risk and diversify across geography. No way only California has homes near forests? There’s also reinsurers to pool even more risk.

> All insurers have to do is to pool risk and diversify across geography. Not all insurers are nation-wide.

Not a problem, that's why the very, very large business of reinsurance exists. You don't have to be nationwide to effectively pool risk and diversify across many industries and nations.

Re: PG&E-friendly wildfire bill being prepared by lawmakers in wake of lethal fires

#74

Post by edejong »

williamscales wrote: post #42
lacker wrote: post #2

It seems like an odd quirk of liability law that all of the fire damage is blamed on PG+E if the initial spark that started the fire was PG+E’s fault. Surely some blame lies elsewhere as well. I think homeowners need to be paying fire insurance costs proportional to fire risk to properly incentivize fire protection (and I say this as a California homeowner in a somewhat fire prone area). In the end, PG+E is regulated…

> Surely some blame lies elsewhere as well. I saw a picture of Paradise after it burned. It was remarkable, the houses were completely gone but the trees were still standing all around. There's something wrong with how we build and maintain our structures in fire prone areas.

The trees have evolved to withstand fires very well, using bark over 10cm thick, dropping the lower needles during fire. Perhaps it is possible to cover buildings in similar isolating material as well. However, people would still need to be evacuated due to the lethal smoke.

Re: PG&E-friendly wildfire bill being prepared by lawmakers in wake of lethal fires

#75

Post by michaelt »

Digory wrote: post #27
lacker wrote: post #2

It seems like an odd quirk of liability law that all of the fire damage is blamed on PG+E if the initial spark that started the fire was PG+E’s fault. Surely some blame lies elsewhere as well. I think homeowners need to be paying fire insurance costs proportional to fire risk to properly incentivize fire protection (and I say this as a California homeowner in a somewhat fire prone area). In the end, PG+E is regulated…

Isn't one theory of granting a government monopoly franchise that it allows pooling of risks related to that activity? PG&E is, in some sense, the government's insurance plan. Other general liability insurance is now priced for damages that cannot be assigned or recovered. But "no fault fire insurance" would shift cost from the government-backed-utility-rate-pool to private insurers. It's hard to imagine that such a…

  It's hard to imagine that such a shift would
  be more efficient
There was an article linked here the other day [1] that said homes can be designed to withstand wildfires through choice of materials and vegetation clearing.

If the intervention you want to incentivise is replacing wooden roofs and removing fuel near the house, raising insurance bills for people who don't do that could be one way of doing it.

Of course, there's also a case for incentivising not starting the fire in the first place.

[1] https://99percentinvisible.org/episode/built-to-burn/

Re: PG&E-friendly wildfire bill being prepared by lawmakers in wake of lethal fires

#76

Post by LanceH »

kozikow wrote: post #65
lacker wrote: post #2

It seems like an odd quirk of liability law that all of the fire damage is blamed on PG+E if the initial spark that started the fire was PG+E’s fault. Surely some blame lies elsewhere as well. I think homeowners need to be paying fire insurance costs proportional to fire risk to properly incentivize fire protection (and I say this as a California homeowner in a somewhat fire prone area). In the end, PG+E is regulated…

> "I think homeowners need to be paying fire insurance costs proportional to fire risk" Wildfires are already covered by property re/insurance. The problem is that risk is badly priced, as modeling for wildfires is currently very underdeveloped compared to hurricanes or earthquakes. There has been no wildfire event of a similar magnitude of property losses in recent history. Shameless plug: At tensorflight we are act…

A house is insured. PG&E is insured. My house burns down, my insurance pays for it. Then they sue PG&E to recover that payout.

As far as who is at fault: a fire needs a fuel, oxygen and a spark. It can be argued that a spark is going to happen somewhere, and mitigating it is more about not having the fuel so that it can chain and spread.

Re: PG&E-friendly wildfire bill being prepared by lawmakers in wake of lethal fires

#77

Post by michaelt »

happertiger wrote: post #72
saltedonion wrote: post #21

Earlier quoted context omitted.

Can you explain why wild fire insurance is not tenable? Here in Canada all home insurance include wildfire insurance. All insurers have to do is to pool risk and diversify across geography. No way only California has homes near forests? There’s also reinsurers to pool even more risk.

With all respect I don’t see how this changes anything but shifting who pays. How is it better to pool risks to the group rather than the individual paying a for that risk? The US already has a huge problem with coastal real estate and federal insurance of coastal developments. Why would we introduce that at scale? Why should the collective pay for individual choices? It’s not like the society got together and made p…

  How is it better to pool risks to the group rather
  than the individual paying a for that risk?
Imagine a population of 10,000 people, 1000 live in fire-prone areas, and 10 will have their $100,000 house destroyed by a wildfire for a total cost of $1,000,000.

(1) If the state pays for wildfire damage, the 10000 people will pay $100 each whether they're in a fire-prone area or not.

(2) With home insurance including wildfire insurance, insurers set individual premiums based on their best risk models, and the 1000 people in fire-prone areas will pay $1000 each, whether their home burns down or not.

(3). If there is neither (1) nor (2), the 10 people whose houses were destroyed will pay $100,000 each.

Some people would say that (2) is the morally correct level of cost distribution, as (1) unfairly subsidises risky behaviour, while (3) bankrupts disaster victims at random.

Re: PG&E-friendly wildfire bill being prepared by lawmakers in wake of lethal fires

#79

Post by [deleted] »

tathougies wrote: post #44
saltedonion wrote: post #21

Earlier quoted context omitted.

Can you explain why wild fire insurance is not tenable? Here in Canada all home insurance include wildfire insurance. All insurers have to do is to pool risk and diversify across geography. No way only California has homes near forests? There’s also reinsurers to pool even more risk.

Why would someone in Oregon (where there is abundant water) or Louisiana purchase wildfire (specific) insurance? Home insurance includes wildfires, but let's limit ourselves to wildfire-specific insurance, which was the issue at hand.

[deleted]

Re: PG&E-friendly wildfire bill being prepared by lawmakers in wake of lethal fires

#80

Post by bluejekyll »

happertiger wrote: post #71
bluejekyll wrote: post #26

Earlier quoted context omitted.

> The solution furthermore is to legislate to remove the barriers to competition that California has set up. While I think you’re generally on point, this misses the mark a bit. We don’t want more transmission lines running in CA, right? We don’t want lots of little companies increasing the risk of fire by managing lines independently and the one that’s losing then doesn’t have the means to maintain those lines. We m…

No that’s exactly what we want. We want the free market to create efficiency without entrenched regulation, which could lead to some short-term increase in risk. But what you really want is to price in the risk, and the only way to do that is to remove government protections of individual corporations so that the free market can operate. Little companies increasing the risks of fire is a misnomer because competition…

I did consider your point, and in general, I agree with it in most cases. To me though, it’s like the road system in US. The transmission lines are very much like the shared cost of maintaining the interstate highway system.

I agree that there are advancements in transmission needed. All of your points are correct, but I disagree that the risks of the free market are the way to get there.

I just drove from SF to LA to let my kids have some some fresh air (ironic, right?). It took us 4 hours, all the way to the grapevine (just past Bakersfield) to not see the smoke, to have more than a few miles of visibility. The cost of the risks from an improperly maintained grid would be horrendous.

I’m not an electrical engineer, and my knowledge of how the grid operates is limited, I’ll admit, I’m just incapable of seeing a free market solution here, where failure can result in a catastrophe like we’re experiencing here now. As I understand the interconnected nature of the grid, it needs centralized management to control the transmission system. I luckily have the means to get my family to safety (we came back yesterday as the air is finally starting to clear), but that’s not an option for many people. I don’t believe the free market you speak of could ever exist, and I don’t think it’s worth watching things deteriorate to find out.

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