California legislators created a $21 billion “wildfire fund” to minimize risk to utility companies which could prove important if investigators find that such a company caused one of the recent major fires that have devastated Los Angeles County.
The fund permits Pacific Gas & Electric Co., San Diego Gas & Electric Co., and Southern California Edison to pay into it. If any of those utilities is found by investigators led by the California Department of Forestry and Fire Protection to be responsible for a fire, they are enjoined to pay for the first $1 billion of losses. After that, the wildfire fund will have to cover the costs.
In 2019, Pacific Gas & Electric declared bankruptcy after being found responsible for the Camp Fire, the deadliest fire in the state’s history. “The Camp Fire was caused by electrical transmission lines owned and operated by Pacific Gas & Electricity (PG&E) located in the Pulga area,” the California Department of Forestry and Fire Protection stated. PG&E later came out of bankruptcy.
Last month, the Biden administration gave PG&E a record $15 billion low-interest loan commitment to modernize PG&E’s hydroelectric infrastructure and upgrade power lines. “Officials with the Loan Programs Office said that because the loan is a legal contract, future administrations wouldn’t be able to claw back the funds,” The Wall Street Journal reported.
“The Los Angeles Department of Water and Power, the municipal utility that operates in Pacific Palisades, says it did not opt into the wildfire fund because it would have been too costly for its customers,” The Los Angeles Times reported. “If the large municipal utility was liable for the Palisades fire, the city of L.A. could face exorbitant financial costs.”
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The 2018 Camp Fire was caused by high-voltage transmission towers that had been in place for roughly a century; the 2019 Kincade Fire was caused by a line built roughly 50 years before. There is speculation that the current Eaton Fire near Pasadena, which has killed at least 17 people, may have started around a Southern California Edison electrical transmission tower.
Michael Wara, former wildfire commissioner for California and a member of the California Catastrophe Response Council, said, “If the wildfire fund did not exist today, Edison might be in real trouble. We would see something probably similar to what happened to PG&E after the Camp Fire.”
“If you are an investor in PG&E or Edison, you might look at this and think, ‘Hmm, I thought the fund was big enough. Maybe now I’m not so sure.’ The fund is there to provide confidence. If the fund isn’t big enough, there will be less confidence,” he added.
“If a large portion of the wildfire fund’s $21 billion was depleted, that could affect market perception of the fund, negatively affect utility company credit scores, and plunge investor-owned utilities — which cover about 80% customers across the state of California — into chaos,” The Times noted.
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[[{“value”:”
California legislators created a $21 billion “wildfire fund” to minimize risk to utility companies which could prove important if investigators find that such a company caused one of the recent major fires that have devastated Los Angeles County.
The fund permits Pacific Gas & Electric Co., San Diego Gas & Electric Co., and Southern California Edison to pay into it. If any of those utilities is found by investigators led by the California Department of Forestry and Fire Protection to be responsible for a fire, they are enjoined to pay for the first $1 billion of losses. After that, the wildfire fund will have to cover the costs.
In 2019, Pacific Gas & Electric declared bankruptcy after being found responsible for the Camp Fire, the deadliest fire in the state’s history. “The Camp Fire was caused by electrical transmission lines owned and operated by Pacific Gas & Electricity (PG&E) located in the Pulga area,” the California Department of Forestry and Fire Protection stated. PG&E later came out of bankruptcy.
Last month, the Biden administration gave PG&E a record $15 billion low-interest loan commitment to modernize PG&E’s hydroelectric infrastructure and upgrade power lines. “Officials with the Loan Programs Office said that because the loan is a legal contract, future administrations wouldn’t be able to claw back the funds,” The Wall Street Journal reported.
“The Los Angeles Department of Water and Power, the municipal utility that operates in Pacific Palisades, says it did not opt into the wildfire fund because it would have been too costly for its customers,” The Los Angeles Times reported. “If the large municipal utility was liable for the Palisades fire, the city of L.A. could face exorbitant financial costs.”
CELEBRATE #47 WITH 47% OFF DAILYWIRE+ MEMBERSHIPS + A FREE $20 GIFT
The 2018 Camp Fire was caused by high-voltage transmission towers that had been in place for roughly a century; the 2019 Kincade Fire was caused by a line built roughly 50 years before. There is speculation that the current Eaton Fire near Pasadena, which has killed at least 17 people, may have started around a Southern California Edison electrical transmission tower.
Michael Wara, former wildfire commissioner for California and a member of the California Catastrophe Response Council, said, “If the wildfire fund did not exist today, Edison might be in real trouble. We would see something probably similar to what happened to PG&E after the Camp Fire.”
“If you are an investor in PG&E or Edison, you might look at this and think, ‘Hmm, I thought the fund was big enough. Maybe now I’m not so sure.’ The fund is there to provide confidence. If the fund isn’t big enough, there will be less confidence,” he added.
“If a large portion of the wildfire fund’s $21 billion was depleted, that could affect market perception of the fund, negatively affect utility company credit scores, and plunge investor-owned utilities — which cover about 80% customers across the state of California — into chaos,” The Times noted.
“}]]
