California Proposes $900 Million Annual Collection From Ratepayers to Support Wildfire Fund

The California Public Utilities Commission issued a proposed decision on Sept. 23 that would authorize the state’s investor-owned utilities to collect from ratepayers a non-bypassable charge to support California’s wildfire fund, which is designed to help utilities pay for wildfire damages linked to their transmission equipment. Pacific Gas and Electric Company must emerge from bankruptcy by June 30, 2020, the deadline set forth by legislation enacted in July, for participation in the newly-established fund. The total annual revenue requirement for the fund would be set at $902.4 million.

The legislation, which created a $21 billion liability fund for the state’s utilities to pay for wildfire damages, directed the agency to consider providing ratepayer funding to support the financial stability of California’s electrical corporations. The fund will be financed equally by ratepayers and shareholders from the state’s three large investor-owned utilities.

PG&E filed to reorganize under Chapter 11 of the U.S. bankruptcy code to deal with billions of dollars in potential liability arising from the 2017 and 2018 Northern California wildfires. The company recently announced that it filed a reorganization with the U.S. Bankruptcy Court for the Northern District of California, proposing to pay nearly $18 billion for claims stemming from the wildfires. PG&E has also reached a $11 billion settlement representing about 85 percent of insurance claims associated with the 2017 and 2018 wildfires in California.