California lawmakers have come to an initial deal to boost the state’s wildfire utility fund by about $18 billion. This plan is expected to be formally introduced in legislation soon, after negotiators pushed back a Tuesday deadline to iron out the details.
The extra funds will be split evenly between utility ratepayers and utility shareholders. Lawmakers hope this will help stabilize utility companies’ finances and protect investors from heavy losses, especially after a series of costly wildfires earlier this year.
This move follows severe wildfires in January that caused major damage in the Los Angeles area and put the California Wildfire Fund in danger of running out of money. The fund was set up in 2019, after the devastating Camp Fire led PG&E to bankruptcy. Right now, the fund holds more than $13 billion, with a total capacity of $21 billion. It helps cover wildfire-related claims that go beyond $1 billion for companies like PG&E and Edison International.
By sharing the financial load between customers and shareholders, lawmakers aim to keep the utilities financially sound while continuing to cover wildfire costs. This agreement comes amid growing concerns about the risks utilities face from increasing wildfire liabilities across the state.