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Chelan PUD urges committee to allow public utility districts to use captive insurance amid rising wildfire premiums
Summary
House Bill 1842 would let public utility districts participate in or own captive insurance companies to manage utility liability risks, including wildfire reinsurance. Chelan County PUD testified it faces sharply rising premiums and limited market capacity and urged the Legislature to grant PUDs the same tool investor‑owned utilities already use.
House Bill 1842, which would authorize public utility districts to participate in or own captive insurance entities, received proponent testimony from Chelan County PUD representatives on Tuesday.
Alicia Kinney Claussen, staff to the committee, summarized that captive insurance allows an entity or group of entities to form a separate insurer to underwrite risks that commercial markets will not cover efficiently. A 2023 report from the Office of the Insurance Commissioner on utility liability insurance markets recommended captive insurance as an option for utilities.
Ron Gibbs, manager of insurance and risk management for Chelan County PUD, said his utility has seen premiums increase by more than 400% since 2019 despite not being responsible for an insured wildfire loss and that commercial markets are reducing capacity. Gibbs said captive insurance could allow PUDs to buy wildfire reinsurance and access coverage not otherwise available. Ryan Smolinski, staff attorney for Chelan PUD, said the proposed bill narrowly modifies state insurance statutes to allow PUD participation and that the PUD worked with the Office of the Insurance Commissioner to limit the changes to public utility districts.
Ending: Both testifiers asked the committee to adopt HB 1842 to give PUDs another tool to manage wildfire and liability risk. No committee action was taken on Tuesday.
