GOP Lawmaker Proposes California Utility Companies Pay Into a New State Fund to Defray Wildfire Costs
With negotiations intensifying over how California’s electric utilities should help pay to fight wildfires, a prominent Republican lawmaker says the companies should contribute to a new multibillion-dollar fund that would help mitigate those expenses.
The proposal by Assemblyman Chad Mayes (R-Yucca Valley) would create the California Wildfire Insurance Fund, a pool of money collected from utility companies that could be used to cover some of the “extraordinary costs arising from wildfires,” according to the draft legislation.
The plan would help utilities that act prudently, while reducing the impact from future fires on utility ratepayers, Mayes said.
“This fund ensures victims of wildfires can quickly rebuild their lives, and utility investors have to help pay for that,” he said.
The proposal would create a state-governed entity to oversee the money contributed by investor-owned and municipal utilities. Exact contribution amounts are not outlined in the draft legislation and will be the subject of negotiations before the Legislature adjourns for the year at the end of August.
The wildfire authority would be governed by a nine-member board, with most of the directors chosen by the governor and some by legislative leaders.
The goal of the plan is to create something akin to an additional layer of insurance coverage for the utilities, given that utility company officials have found it difficult to increase coverage through traditional means. Mayes said his bill would require investor-owned utilities — a group that includes Southern California Edison, Pacific Gas & Electric Co. and San Diego Gas & Electric Co. — to use money from shareholders to help fill the wildfire fund’s coffers.
“It cannot all fall on the backs of ratepayers,” Mayes said. “This is an important piece of a comprehensive plan to ensure California’s energy utilities are financially stable.”
The proposal is being circulated among stakeholders involved in negotiations over a comprehensive wildfire liability plan, one of the most contentious issues left for legislators to resolve this month. Gov. Jerry Brown has proposed loosening the process by which utility companies are held liable for wildfire costs when their equipment contributes to sparking a blaze. Utility companies also support that proposal, along with potential regulatory changes that would incentivize wildfire mitigation efforts.