The three major investor-owned utilities (IOUs), PG&E, Southern CA Edison, and San Diego Gas and Electric, have chosen to contribute to the wildfire fund known as the Insurance Fund established by AB 1054, a decision that will provide greater protection to ratepayers against shouldering the costs for wildfire damages.
AB 1054 required the IOUs to select whether the Wildfire Fund would be a liquidity fund or insurance fund. If the IOU’s had chosen the liquidity fund model, ratepayers would have been responsible for contributing to the fund through the re-establishment of the DWR fee on electric bills AND for reimbursing the fund should fires be started by utility equipment where utilities were found to have acted reasonably. This was not a good option for ratepayers.
Under the chosen insurance fund model, ratepayers will still make a contribution to the fund through the re-established DWR fee, but the IOU shareholders must make a matching contribution. Further, under this model, ratepayers do not have to reimburse the fund for fires started by utility equipment.