California Electric Customers Face Increased Costs to Bolster Wildfire Fund
California electric customers are poised to contribute an additional $9 billion to teh state’s wildfire fund, pending a vote expected Saturday morning. Amendments to Senate Bill 254, necessary for the bill’s passage, require a 72-hour public review period, delaying the vote. The fund,established in 2019 via Assembly Bill 1054,aims to shield the state’s three major investor-owned utilities - edison International,Pacific Gas & Electric (PG&E),and Sempra (parent company of San Diego Gas & Electric) – from bankruptcy in the event of wildfire damages caused by their equipment.
The increased funding is driven by potential payouts related to the ongoing examination into the Eaton fire, with insured property losses estimated between $15.2 billion (state officials’ estimate) and $24-$45 billion (UCLA study). Under current law, Edison could be responsible for only a fraction, or even none, of the damages if its equipment is steadfast to have sparked the fire.A leading theory suggests a re-energized,century-old transmission line may have caused the blaze.
While the additional cost is unwelcome news for ratepayers – who already pay the country’s second-highest electric rates – some provisions within the bill aim to mitigate the financial impact. Utilities will be required to finance expensive transmission projects through lower-cost public financing, perhaps saving ratepayers billions of dollars.Furthermore, half of the $18 billion added to the fund will come from utility shareholders. the plan also mandates that the three utilities spend billions more on wildfire prevention measures without being able to profit from those investments.
Assemblymember Cottie Petrie-Norris (D-irvine), co-author of the bill, defended the late-stage amendments, citing the urgency of bolstering the fund as California’s wildfire season begins. She noted that many of the added provisions had been previously debated in public hearings.
Mark Toney, executive director of the Utility reform Network, a consumer group, expressed disappointment but indicated his institution would support the bill despite it “falling short of addressing the growing affordability crisis.”
Governor Newsom’s office shared an outline of the plan in July,and spokesman Daniel Villasenor confirmed the amendments will proceed through the standard legislative process. News of the plan led to a rise in share prices for Edison International, Pacific Gas & Electric, and Sempra on Wednesday.
It’s crucial to note that the wildfire fund only covers customers of Edison, PG&E, and San Diego Gas & Electric, and only these three utilities benefit from its protective measures. Damages from the palisades fire, which occurred on the same day as the Eaton fire, are not covered as the affected area is serviced by the Los Angeles Department of Water and Power, a municipal utility.
