Subcommittee reviews amendments to Senate Bill 2339 that limit utility liability and pin standards to mitigation plans

Energy and Natural Resources subcommittee members reviewed agreed amendments to Senate Bill 2339 on utility wildfire mitigation and liability, hearing from utility representatives, insurers and a cooperative that raised concerns about vegetation-management standards.

The amendments discussed would codify that power companies and electrical cooperatives are not subject to a strict-liability standard; create a rebuttable presumption of adequate care for utilities that have and comply with a wildfire mitigation plan; require plan resubmission every two years instead of every three; add a requirement to comply with the National Electric Safety Code; and change one reporting requirement for rural electric cooperatives from "shall" to "may." Committee members heard objections from Minnkota Power Cooperative about a mandatory reference to an American National Standards Institute vegetation-management standard.

Dennis Patheroff, representing the Power Companies in North Dakota (PCND), said the insurance industry and utilities had negotiated the changes after opposition testimony at a previous hearing. Patheroff summarized the drafting edits and the agreed items, including moving certain definition text, making plans subject to the National Electric Safety Code and shortening the plan resubmission interval. He also requested changing language on page 4, line 2 so that rural electric cooperatives "may" submit an annual report to their board, rather than "shall."

John Ward, attorney representing State Farm Insurance, said insurers and utilities had met "in the middle" on several points and recommended the subcommittee adopt the negotiated amendment. Ward described the legal-change at issue: "The rebuttable presumption is essentially just shifts the burden. So it places the burden on the person that's alleging that the power company was negligent to to show that that they were negligent." He also said adding the National Electric Safety Code into statute reflected an insurer request and that the rebuttable-presumption language has been used in other states.

Ward explained the effect of the bill on liability standards: the draft would codify that strict liability does not apply to power companies, and the rebuttable-presumption standard would operate in negligence claims only for companies that have and comply with a wildfire mitigation plan. "By placing the strict liability standard into the century code, you are now codifying that power companies do not have strict liability," he told the subcommittee.

Several legislators asked questions about scope and precedent. Representative Johnson asked whether other industries might seek similar liability carve-outs in future sessions; Ward said it was possible other industries could ask for protections. Committee members also asked for clarification about the practical effect of the "may" versus "shall" language for reporting and about whether utilities would be protected only if they implemented and complied with a plan.

Carly McLeod, representing Minnkota Power Cooperative, objected to a mandatory reference in the amendment to the American National Standards Institute standard A300 Part 7 for vegetation management. McLeod said utilities use different standards in practice and described ANSI A300 Part 7 as one of several best-practice documents. "By requiring this particular standard ... you're setting a new standard of what needs to be done," she said, warning that mandating that standard in statute could in effect change what is treated as negligence in litigation. McLeod proposed either removing the specific ANSI A300 Part 7 reference or changing the language to require that utilities "substantially comply" with applicable vegetation-management standards so that utilities could tailor plans to local risk profiles.

Committee members noted the language has appeared in prior drafts and that the bill has not yet been passed; the subcommittee agreed to take more time to review the amendments. The chair said the subcommittee would likely reconvene to consider the changes further and adjourned the meeting.

Votes and formal actions: No formal motions or recorded votes were taken at this meeting; the subcommittee ended the session with plans to meet again for further consideration of the amendments.