Can Gov. Newsom ‘lead from behind’ on wildfire legislation?

Gov. Gavin Newsom and his wildfire “strike force” surprised some with the vagueness of its most important recommendation: That it’s time to revise the “inverse condemnation” state law that holds energy utilities can be held fully responsible for fires that were caused by their equipment even if the equipment was properly maintained. The law appears to be an existential threat to Pacific Gas & Electric, the state’s largest investor-owned utility, which filed for bankruptcy protection in January after being blamed for fires that resulted in $30 billion in damages.

Newsom’s pointed deference to state lawmakers – saying he hoped they could hash out a plan by mid-July – is an example of the “leading from behind” management gambit, which has a mixed history. Just as the Obama administration did with aspects of its foreign policy, the Newsom administration is expecting its allies to take the helm. The governor said he believes progress is more likely with him in the background.

“I’m purposely not including my personal opinions because I actually want to accomplish something. And I believe it’s incumbent upon me to create the conditions where we can actually get something done, versus to assert a political frame,” Newsom told Capitol reporters.

The governor may also perceive political risk if he puts out his own specific blueprint for how PG&E, Southern California Edison and San Diego Gas & Electric can survive in a hot, dry era in which massive wildfires are common annual events.

Tactic seen as best for long-range causes

Leadership experts, however, think the “lead from behind” gambit works better for issues with low stakes or for long-term causes – for the most famous example, Nelson Mandela’s decades-long effort to end apartheid in South Africa – and isn’t necessarily right for addressing pressing problems.

Jack Dunigan, a longtime management consultant who runs The Practical Leader website, believes that “it works best in times and places of non-crisis. If a child is running into the street and into traffic, it is not the time to convene a focus group to discuss the threats of playing in the street. It is the time for action. Leading from behind, as [Harvard business professor Linda] Hill describes it, works best in non-threatening, non-urgent conditions.”

Given that PG&E emerged in 2004 after three years in bankruptcy and returned to regular operations, that may suggest that there is no urgent reason for Newsom to take a bolder approach. But the idea that the Legislature will be able to come up with a plan in three months or less is difficult to square with its recent history – and the intense dislike that many state lawmakers and Northern California residents have for scandal-scarred PG&E.

In January, after PG&E’s bankruptcy filing, state Sen. Bob Hertzberg told a Sacramento TV station, “Nobody in the Capitol wants to bail out PG&E, period, exclamation mark, end of story, full stop. They just don’t.”

While lawmakers don’t hold Southern California Edison and SDG&E in such contempt, any attempt to help them deal with wildfire liabilities that also protects PG&E would face tough sledding.

This background is why Newsom’s predecessor, Jerry Brown, got nowhere last year with his proposal to give state judges the flexibility to limit the amount of liability a utility has for wildfire damages based on circumstances – including consideration of the importance of a utility being able to continue to provide power to millions of customers.

Further complicating the prospects for relatively quick approval is that “inverse condemnation” is written into the California Constitution. Changing it would appear to require a vote of the public as well as two-thirds approval of both the state Assembly and Senate.