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With Fire Season Approaching, How Should California Fund Wildfire Liability For Utility Companies?

Santa Anna Winds Stoke Wildfires In Southern California
Santa Anna Winds Stoke Wildfires In Southern California
J. Emilio Flores/Getty Images

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Summertime means wildfire season in California, and after last year’s devastating Woolsey and Camp Fires, the latter of which destroyed the town of Paradise and is the deadliest wildfire in California history, stakeholders on all sides are exploring ideas for how to make sure that if another wildfire does start because of malfunctioning utility company equipment, that the utility has a financial safety net to prevent bankruptcy and that ratepayers are protected from steep increases in their monthly bills. But questions remain about how much money will be required for this fund, and who’s going to put it there.

Currently, state lawmakers are considering two models for a fund that would backstop utility companies financially in case of a question of liability. One is a so-called “liquidity fund,” which the state says would require $10 billion that would come from continuing a state Department of Water Resources charge to ratepayers that was created during the last energy crisis. The utilities would borrow the money from the state to cover liabilities and pay it back after it is determined how much the utility is liable. The other model would be a second insurance policy for utilities over the next decade and require $40 billion.

Today on AirTalk, guest host Kyle Stokes speaks with stakeholders about how utility companies are preparing for wildfire season and which, if either, of the liability fund models they would prefer to see implemented.

With guest host Kyle Stokes


Bryan Anderson, political reporter for the Sacramento Bee who covers legislature, the 2020 election, and the DMV; he is also host of the Bee’s “California Nation” podcast; he tweets @BryanRAnderson

Mark Toney, executive director of the consumer advocacy group The Utility Reform Network (TURN)