Insurers are turning up the heat on Jamie Court

With help from Blanca Begert and Wes Venteicher

GOING FOR THE JUGULAR: As fire season gets underway, insurers are declaring open season on their No. 1 nemesis.

A half-dozen trade groups this month took the unprecedented step of contesting Consumer Watchdog’s right to participate in proceedings at the Insurance Department — the firebrand ratepayer advocacy group’s main source of funding.

It’s the first time insurers have tried to get the group disqualified from proceedings at the department, and it comes as Insurance Commissioner Ricardo Lara is hearing requests for record rate increases stemming from wildfire losses.

The squabble shows the hold that a single group and its charismatic leader, Jamie Court, has over the debate over how to fix the state’s wildfire insurance problems — and the correspondingly growing frustration of an industry already on its heels.

Relations have been tense between the insurance industry and Consumer Watchdog since the group wrote and helped pass Proposition 103. The 1988 voter-approved measure required cuts in insurance rates and set up the intervenor system that the group is now the most frequent participant in, receiving 96 percent of the department’s payments to intervenors last year (which it bills to insurers).

Property insurers fleeing the rising costs of climate change have grown increasingly frustrated with Consumer Watchdog because of the group’s opposition to Lara’s proposed reforms to entice companies back to California, including faster rate hikes and the use of proprietary forward-looking climate models. The group helped tank an insurance deal between the Legislature, Lara and the industry last year by arguing it would cost customers.

Personal Insurance Federation of California President Rex Frazier, in his letter to the Insurance Department, blamed the state’s wildfire insurance crisis partly on Consumer Watchdog’s advocacy, which has contributed to keeping insurance rates in California among the lowest in the nation.

Other groups, including the National Association of Mutual Insurance Companies, the Western Insurance Agents, the American Property Casualty Insurance Association and the California Building Industry Association, echoed his arguments.

“I hope that we start to have expectations placed on them to be responsible participants in the system, rather than just bomb throwers who ignore the downsides of their bad behavior,” Frazier said in an interview.

Court, for his part, is blaming Lara for issuing a public notice alerting the industry of the option to challenge CW’s status.

“He’s willing to turn the helm of the insurance commissioner’s office over to the companies to muddy us up,” Court said in an interview. “That tells me everything about the fact that we need to be involved in these proceedings, because otherwise, the companies are gonna get rubber stamps on their rates.”

Lara spokesperson Michael Soller acknowledged the public notice was a new strategy but cast the effort as an all-sides push for more transparency and part of a “long-overdue and necessary” change.

“This is the Department holding all parties to the rate filing process accountable, including intervenors,” Soller said in an email. “We don’t want the intervenor process to continue to be a black box.”

Lara is planning to decide on the group’s status by Aug. 2, unless he decides a hearing is needed, according to a notice last week.

But there might be fireworks sooner: The Insurance Department is taking public feedback tomorrow afternoon on its plan to require insurers to boost their policy offerings in certain fire-prone areas. And the Assembly Insurance Committee tomorrow will weigh two Senate proposals to require underwriters to account for mitigation and to allow the state to give the insurer of last resort a loan in case of a big loss. — CvK

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FRACKING FOR RENEWABLES: Geothermal energy is making a big stride in California’s energy mix through a company’s new agreement with utility Southern California Edison, reports Benjamin Storrow of POLITICO’s E&E News.

Fervo Energy, a company that developed a novel technique of essentially fracking for heat and turning it into energy, will supply SCE with about 320 megawatts, which the company said was enough to power 350,000 homes.

The resource is an integral part of the California Public Utilities Commission’s clean energy transition plan because it can provide power when the sun isn’t shining and the wind isn’t blowing. That means it can help replace natural gas, which the state still depends on to keep the lights on particularly on hot summer evenings.

“This is key to ensuring reliability as we continue to transition away from fossil fuels,” California Energy Commission Chair David Hochschild said in a statement Tuesday.

Fervo is supplying the power from a Utah plant. The company says it could draw lots more power from the earth there if it only had more transmission, or a local customer like a data center. — WV

OZONE OVER: Sen. Lena Gonzalez’ first-in-the-nation bill to protect Californians from polluting air purifiers won’t move forward this session.

While it sounds like an oxymoron, certain varieties of air purifiers, like those that pull particles from the air through electrostatic attraction, also pollute the air by generating ozone, the main component of smog. Some air purifiers also intentionally emit ozone claiming that it cleans the air.

California became the only state in the country to regulate ozone from consumer electronic air purifiers in 2010. Gonzalez’ bill would have tightened the allowable emissions from .05 parts per million to .005 ppm.

But a group of scientists, including researchers from Stanford University, Columbia University and the Massachusetts Institute of Technology, petitioned her to exclude devices that use germicidal ultraviolet light, on the grounds that the bill would limit research into far-UV technology that could be uniquely powerful for stopping the spread of viruses like Covid. They argued the technology is worth further consideration, even if it generates ozone above the .005 limit recommended by California Air Resources Board and University of California, Davis, researchers.

Gonzalez decided the bill needed more time and pulled it ahead of Monday’s Assembly Natural Resources Committee hearing.

“My primary focus is to prioritize public safety while evaluating the essential regulations for technology designed to protect people’s health and well-being,” said in a statement. “At present, I have decided to hold off on advancing Senate Bill 1308 to address specific intricacies within the proposed legislation to ensure that goal is met.” — BB

AND THE RIVER FLOWS: A longtime stalwart in the multi-state negotiations over a dwindling Colorado River is retiring at the end of November. The Colorado River Board of California’s Executive Director Christopher Harris is stepping down after nearly 25 years with the board, Natural Resources Secretary Tony Andersen confirmed to POLITICO. — CvK

— Cruise’s rebranding efforts include appointing a former Xbox founding engineer as its new CEO.

— Climate policies could become more vulnerable this week if the Supreme Court decides against the Chevron deference.

— The Los Angeles Times profiled the University of Southern California’s Equity Research Institute Director Manuel Pastor as one of the influential people shaping LA.