California Governor Gavin Newsom Proposes $18 Billion for Utilities’ Wildfire Fund to Stabilize Finances Amid Future Blazes Concerns.

California Governor Gavin Newsom proposes a plan to increase the state's wildfire fund by $18 billion, with half funded by electricity ratepayers and the other half by utilities Edison International, PG&E Corp., and Sempra. The move aims to stabilize the utilities' finances and protect consumers amid concerns over liability for deadly wildfires. The fund was established in 2019 to help stabilize utilities and limit shareholder losses.

California Governor Gavin Newsom has proposed a legislative plan to bolster the state's wildfire fund by an additional $18 billion. The proposal, which is still in draft form, aims to stabilize the utilities' finances and protect consumers amidst growing concerns over liability for deadly wildfires.

The California Wildfire Fund, established in 2019, is managed by the California Earthquake Authority. It currently has a $21 billion budget and is designed to provide faster and more substantial compensation for victims of utility-caused wildfires while protecting power companies from large claims. Under Newsom's proposal, half of the additional $18 billion would be funded by electricity ratepayers through a monthly charge, while the other half would be contributed by utility companies that benefit from the fund, including Edison International, PG&E Corp., and Sempra [1].

The proposal is emerging as a potential lifeline for utilities amid uncertainty over liability linked to recent wildfires, such as the Los Angeles fires that struck in January. Newsom's office stated that they continue to work with the legislature on policy that will stabilize the Wildfire Fund to support the recovery of wildfire survivors and protect California utility consumers [2].

Newsom's plan also includes extending the fund's sunset date from 2035 to 2045, and requiring state agencies to conduct a study on how to spread the cost of utilities' wildfire risks across a broader swath of California taxpayers. Additionally, the proposal seeks to cap the amount insurers can obtain from the fund through subrogation claims, which could potentially force insurers to raise rates or limit policies in the state [3].

The proposal has the potential to face opposition from utility executives who advocate for the replenishment of the fund to fall on California ratepayers rather than company shareholders. Insurers may also contest the proposed cap on subrogation claims, arguing that it will force them to raise rates or limit policies [3].

The California Earthquake Authority, which administers the wildfire fund, has described the rising transactions around subrogation claims as "opportunistic, profit-driven speculation." Newsom's office believes that settlements should be around 40 cents on the dollar, but they currently can top 50 cents [3].

The legislation under discussion may be introduced by a lawmaker in the state legislature when it reconvenes from summer recess on August 18 [4].

References:
[1] https://energynews.oedigital.com/electric-utilities/2025/07/30/bloomberg-news-california-governor-seeks-an-additional-18-billion-to-fund-utilities-wildfire-funds
[2] https://www.investing.com/news/economy-news/pge-misses-profit-estimates-hit-by-higher-operating-and-maintenance-costs-4162898
[3] https://www.bloomberg.com/news/articles/2025-07-30/newsom-wants-18-billion-in-wildfire-funds-for-edison-pg-e-and-sempra-s-sdg-e
[4] https://www.investing.com/news/stock-market-news/california-governor-seeks-additional-18-billion-for-utilities-wildfire-fund-bloomberg-news-reports-4161550