Legislature, Governor Finalize $26 Billion Wildfire Liability Measure
This week, the California Legislature and Governor Gavin Newsom finalized a sweeping $26 billion wildfire liability measure aimed at protecting wildfire victims, creating additional safety and oversight processes for public utilities, and holding public utility companies accountable for safety of their infrastructure systems. After extensive negotiations between the Legislature, Administration, and relevant utility and wildfire victim stakeholders, AB 1054 (Holden) was passed by the Legislature this week and signed into law this morning by Governor Newsom.
Under the measure, a new safety and oversight division within the California Public Utilities Commission (CPUC) will be created to set forth safety regulations and ensure compliance with wildfire mitigation plans. Additionally, investor-owned utility companies will be required to pay $5 billion into a wildfire mitigation and safety fund over five years and meet new safety standards in order to access up to $21 billion in funds to pay out claims from damages in future catastrophic fire events caused by the equipment of participating electric utilities. Existing charges on consumer utility bills will be extended 15 years to raise $10.5 billion for the fund, and the state’s three largest investor-owned utilities could elect to contribute an additional $10.5 billion. The sweeping measure also includes rate payer protections and cost recovery by allowing recovery from ratepayers only if the utility’s conduct was reasonable and in accordance with specified safety standards.
Governor Newsom, in a statement on Thursday, expressed his gratitude for the Legislature and underscored the importance of the action, stating, “The rise in catastrophic wildfires fueled by climate change is a direct threat to Californians. Strengthening our state’s wildfire prevention, preparedness, and mitigation efforts will continue to be a top priority for my administration and our work with the Legislature.”