California Governor Gavin Newsom Proposes $18 Billion for Utilities' Wildfire Fund Amid Future Blazes Concerns

California Governor Gavin Newsom proposes an additional $18 billion for the state's wildfire fund to support utilities. The fund, which currently has $13 billion in assets, was established in 2019 to help stabilize utilities' finances and limit shareholder losses. The proposal aims to address uncertainty over liability linked to the deadly wildfires that struck Los Angeles County in January. Edison International, PG&E Corp., and Sempra would contribute half the money through a monthly fee, while ratepayers would contribute the other half. The fund's new sunset date would be 2045 instead of 2035, and a study would be conducted to examine how to spread the cost of utilities' wildfire risks across taxpayers.

California Governor Gavin Newsom has proposed an additional $18 billion for the state's wildfire fund to support utilities. The fund, which currently has $13 billion in assets, was established in 2019 to help stabilize utilities' finances and limit shareholder losses. The proposal aims to address uncertainty over liability linked to the deadly wildfires that struck Los Angeles County in January. Edison International, PG&E Corp., and Sempra would contribute half the money through a monthly fee, while ratepayers would contribute the other half. The fund's new sunset date would be 2045 instead of 2035, and a study would be conducted to examine how to spread the cost of utilities' wildfire risks across taxpayers.

The proposal comes amidst growing concerns over the potential exhaustion of the wildfire fund due to claims from the Eaton fire, which has been linked to Edison International. The utility has announced a Wildfire Recovery Compensation Program to quickly pay victims, including those who were insured, while avoiding lengthy litigation. However, the program has drawn skepticism from lawyers who argue that victims need to view the plan cautiously to avoid waiving their rights [1].

The proposal also seeks to extend the monthly surcharge imposed on customers of Edison and other utility companies to support the fund. Officials are considering extending the surcharge to help cover the costs associated with the Eaton fire and other wildfires. The extended surcharge could lead to higher utility bills for customers, potentially impacting their financial stability.

The wildfire fund was established to provide financial support to utilities and their shareholders in the event of wildfire-related liabilities. By adding $18 billion to the fund, the proposal aims to provide more financial stability to utilities and reduce the risk of shareholder losses. However, the proposal may also lead to higher utility bills for customers, which could impact their financial stability.

In response to the proposal, Edison International has stated that the new compensation program is not an admission of legal liability. The utility has hired consultants Kenneth R. Feinberg and Camille S. Biros to help design the program, which aims to provide an expedited process for paying and resolving claims fairly and promptly [2].

The proposal is currently under consideration by state lawmakers, who will determine whether to approve the additional funding for the wildfire fund. If approved, the proposal could have significant implications for utilities, shareholders, and customers in California.

References:
[1] https://www.latimes.com/environment/story/2025-07-25/edisons-program-to-pay-eaton-fire-victims-leaves-questions
[2] https://www.latimes.com/environment/story/2025-07-25/edisons-program-to-pay-eaton-fire-victims-leaves-questions