Serious question - how can you hold such companies accountable when fines would be passed directly to consumers? What sane mechanisms exists for this?
You wipe out the equity holders at a minimum. And possibly break the company up Ma Bell style.
So PG&E is split into, let's say, 5 different equal, smaller companies. And Company C caused this fire. Now you have a company 1/5th the size and revenue having to pay the full load. How would that work?
The mind boggles. You cannot change behaviours/regulate infrastructure maintenance or safety through fines to shareholders (and, by proxy, consumers).
1. Stiff regulation for "natural monopolies," or for effectively state-monopolies. The state legislature then prevents the company from raising rates in order to pay back loans or pay off fines. Negligent behavior is punished by the state.
2. Competition, e.g. the Ma Bell breakup. Break up PG&E and have its small companies compete with each other. Any one company can't raise rates to pay off negligent behavior, because they'll lose out to their competition. Negligent behavior is punished by the market.
3. Ajit Pai yourself into a few monopolies with no regulation, and rejoice as you live with whatever Comcast deigns to give you. Actively malicious behavior goes unpunished, or is even rewarded.
a) reduce profitability b) issue more equity and use the proceeds to pay back debt c) increase efficiency/lower cost to deliver services.
This distributes the risk over the companies (useful financially, bad for risk mitigation), but also creates an incentive for the insurer to audit policies, practices, and procedures to minimise risks. Insurance is a pretty powerful business invention, and is unique amongst virtually all businesses in that it seeks out risks (and then tries to manage them).
There are smaller power companies within California (most of them are municipality-owned utilities), and they tend to be fairly accountable to their individual market-owners.
California statewide wildfire insurance claims nearly $12 billion
For Release: January 31, 2018
LOS ANGELES, Calif. — Insurance Commissioner Dave Jones today announced that insurers have received nearly 45,000 insurance claims totaling more than $11.79 billion in losses from the devastating wildfires that burned across the state in October and December 2017 damaging and destroying more than 32,000 homes, 4,300 businesses, more than 8,200 vehicles, watercraft, farm vehicles, and other equipment....*
https://www.insurance.ca.gov/0400-news/0100-press-releases/2...
Again, insurance companies internalise rather than externalise risks. They also manage risks.
This can mean changes to construction, landscaping, fire response, utilities operation, activities restrictions (including legal sanctions, e.g., restrictions on mowing or tilling during high-fire season), hydrants, and more.
There are of course limitations to what can be done. A wonderful concept comes from the field of marine navigation and seamanship:
"The Art of ship handling involves the effective use of forces under control to overcome the effect of forces not under control."
-- Charles H. Cotter
That is the essence of all engineering.
California has extensive experience with major catastrophic fires which have strongly influenced its insurance landscape. The morning of 18 April in 19 and 6 comes to mind.
And after all the capital and political fighting your goal is to make less money than the incumbent.
PG&E rates have to be justified to and approved by regulators; liability costs for wrongfully causing widespread devastation maybe shouldn't be considered a valid basis for rate increases.