California Electric โCustomers Face โขIncreased Costs toโ Bolster Wildfire Fund
California electric customers โare poised to contribute an additional $9โ billion to teh โคstate’s wildfire fund, pending a vote expected Saturday morning. Amendments to โขSenate Bill 254, necessary forโ the bill’s passage, require a 72-hour public reviewโฃ period, delaying the vote. The fund,establishedโฃ in 2019 viaโค Assembly Billโข 1054,aims to shield the state’s three major investor-owned utilities -โฃ edison International,Pacific Gas & Electric (PG&E),and Sempraโ (parent company of San โDiego Gas & Electric) – from bankruptcy in the event of wildfire damages caused by their equipment.
The increased funding is driven โขby potential payouts related to the ongoing examination into the Eaton fire, with insured property lossesโฃ estimated between โ$15.2 billion โ(state officials’ estimate) and $24-$45 billion (UCLA study). Under current law, Edison could be responsible for only a fraction, or even โฃnone, ofโ the damages if its equipment is steadfast to have sparked the fire.A leading theory suggests a โฃre-energized,century-oldโฃ transmissionโ lineโข mayโฃ have caused the blaze.
While the additional cost is unwelcome news for ratepayersโข – who already pay the country’s โคsecond-highest electric rates – some provisions within the bill aim to โฃmitigate the financial impact. Utilities will be required to finance expensive transmission projects through lower-cost public financing, โperhaps saving ratepayers billions โof dollars.Furthermore, half of the $18 billionโ added toโค the fund willโ come from utility shareholders. the plan โฃalso mandates that the three โขutilitiesโ spend billions more on wildfire โprevention measures without being able โtoโ profit fromโฃ those investments.
Assemblymember Cottie Petrie-Norris (D-irvine), co-authorโ of the bill, defended the late-stage amendments, citing the urgency of bolstering the fund as California’s wildfire season โคbegins. She โฃnoted that many โขof the โฃadded provisions had been previously debated โin public hearings.
Mark Toney, executive directorโ of the Utility reform Network, a consumer group, expressed disappointment but indicated his institution would โขsupport the bill despite itโฃ “falling short of addressing โthe growingโฃ affordability crisis.”
Governor Newsom’s office shared an outline of the โplan in โJuly,and spokesman โDaniel Villasenor confirmed the amendments will proceed through the standard โฃlegislative process. News of the plan led to a rise in share โprices โฃfor Edison International, โPacific Gas & Electric, and โSempra on Wednesday.
It’s crucial to note that the โคwildfire fundโข only covers customers of Edison, PG&E, andโข San Diego Gas & Electric, andโ only these threeโ utilities benefit from its protective measures. Damages from the palisades fire, which occurred on the same dayโข as theโ Eaton fire, are not covered โฃas โthe affected โขarea is servicedโฃ by the Los Angeles Department of Water and Power, a municipal utility.