Governor Newsom pursues $18 billion in funding to fortify the state's wildfire reinforcement program
California Governor Proposes $18 Billion Expansion of Wildfire Fund
In the aftermath of the devastating Eaton wildfire, Governor Gavin Newsom has proposed legislation to increase California's wildfire fund by $18 billion. This move aims to strengthen utilities' finances and protect consumers from massive wildfire liabilities.
The proposed expansion would see half of the additional funding financed through a monthly charge on electricity ratepayers, with the other half contributed by utility companies such as Edison International, PG&E Corp., and Sempra. This new fund, called the "Continuation Wildfire Fund," would not be created until the administrator of the state's original wildfire fund determines additional funds are needed.
The original $21 billion wildfire fund, established in 2019, provides compensation for wildfire victims caused by utilities while shielding these companies from large claims. The Eaton fire, which occurred in Altadena and resulted in 19 deaths and the destruction of thousands of homes and businesses, has the potential to drain the state's current fund. An estimate released by state officials suggests that the insured property losses from the Eaton fire could reach $15.2 billion, while a study by UCLA estimates losses at $24 billion to $45 billion.
The Eaton fire was sparked by an Edison transmission line that has not been in use since 1971. Despite this, the incident has highlighted the need for increased wildfire prevention measures and a more robust wildfire fund.
The proposal has been met with mixed reactions. Utility executives have criticized the plan for proposing that shareholders pay additional amounts into the fund. Pedro Pizarro, chief executive of Edison International, stated that any legislation to shore up the fund "would not have a shareholder contribution." On the other hand, Mark Toney, executive director of the Utility Reform Network, expressed disappointment about the proposal, believing there should be limits on the liabilities that the wildfire fund will pay for.
The investigation into the cause of the Eaton fire is still ongoing. However, the incident has underscored the importance of investing in tree trimming and other wildfire prevention measures. Since the creation of the $21 billion fund, spending on these measures by electric customers has totaled $27 billion.
The legislation is still in draft form and requires approval of the state Senate and Assembly. If passed, customers would pay an additional $9 billion by extending a surcharge on their monthly bill for 10 years beyond 2035. Edison has offered to pay damages to Eaton fire victims in an attempt to avoid litigation.
The proposed expansion of the wildfire fund is a significant step towards addressing future wildfire risks and liabilities in California. The increased financial inputs will help improve wildfire response and ensure financial stability, particularly as liability concerns rise after devastating fires like the Eaton fire.
- Governor Gavin Newsom's proposed legislation seeks to expand California's wildfire fund by $18 billion, with the aim of strengthening utilities' finances and protecting consumers.
- The proposed "Continuation Wildfire Fund" would receive half of the additional funding from electricity ratepayers and the other half from utility companies.
- The Eaton fire, which occurred in Altadena and resulted in significant loss, has the potential to drain the state's current wildfire fund, prompting the need for increased funding and prevention measures.
- The proposed legislation has gathered mixed reactions, with utility executives criticizing the plan for proposing shareholder contributions and environmental groups expressing concerns about liability limits.
- The investigation into the cause of the Eaton fire is ongoing, but it has underscored the importance of investing in wildfire prevention measures such as tree trimming.
- If passed, the legislation would require customers to pay an additional $9 billion over 10 years through a monthly surcharge on their bills.
- The expansion of the wildfire fund, if implemented, would not only address future wildfire risks and liabilities in California but also improve wildfire response and ensure financial stability, especially in the wake of devastating fires like the Eaton fire.
