Gov. Gavin Newsom is preparing a bill that adds another $18 billion to the state fund for wildfire victims that warned that the deadly Eaton wildfire in January could exhaust staff.
Under Newsom’s plan, the state’s three largest for-profit utility customers will pay another $9 billion to supplement the state’s fund created in 2019, which holds $21 billion.
According to the draft proposal, the other $9 billion will come from shareholders of Edison, Pacific Gas & Electric and San Diego Gas & Electric in Southern California.
“We continue to work with Congress on policies that stabilize California’s wildfire funds, helping to recover wildfire survivors and protecting California’s utility consumers.
The three utility customers are already hooked to donate half of the original $21 billion fund through an additional fee of approximately $3 on their monthly bill. The proposal would result in customers paying an additional $9 billion when it expires by extending that extra fee to 2035 or later.
“We’re excited to see the company’s efforts to help people understand how they’re doing,” said Mark Tony, executive director of Utility Reform Network, a consumer advocacy group.
Utility executives criticized the plan previously reported by Bloomberg for its shareholders suggested paying an additional amount to the fund.
Edison International CEO Pedro Pizarro told Fund and Hawmakers that the company told Newsom and lawmakers that the fund-strengthening legislation “has no shareholder contributions.”
“We need to check the ultimate package balance,” Pizzaro said.
Newsom’s plans are circulating with legislative leaders and others, and will require approval from state senators and legislators. Under the draft proposal, $18 billion will enter the new “Continuous Wildfire Fund.” No new funds will be created until the state’s original Wildfire Fund administrator determines that additional funds are needed.
Newsom and lawmakers established a $21 billion fund in 2019 to protect the utility from bankruptcy if equipment caused a catastrophic fire.
Tony said state officials told him there was a 99% chance that the fund would last for 20 years. Now it could be wiped out in just one fire.
He said he believes there must be a limit to the debts the fund pays. “We can’t go back every three or four years and we can’t put more money in,” he said.
Since the fund was created, electric customers have also paid $27 billion for tree trimming and other work aimed at preventing wildfires.
Despite that spending, the fire lit by Edison’s equipment jumped from 90 in 2023 to 178 in 2024.
Investigations continue into the Eton fire that killed 19 people and destroyed thousands of Altadena homes and businesses. The video launched a fire under the Edison Transmission Tower on January 7th.
Pizzaro says the main theory is that a dormant Edison transmission line, which has not been used since 1971, somehow became electrified and caused a flame.
The loss of the property alone could be $15.2 billion, according to estimates released by state officials last week. That amount does not include uninsured losses or damage to property, such as illegal death claims. A UCLA study estimated losses of $24 billion to $45 billion.
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