There are plenty of critics on both sides of the aisle complaining about Gov. Gavin Newsom's plan to help PG&E and other utilities pay for wildfire costs by collecting $10.5 billion from rate-payers.
But according to Newsom, doing nothing would ultimately cost the little guy more.
"In absence of doing anything, the rate-payers, the taxpayers and the victims are going to be most impacted," Newsom said. "We need to protect the rate-payers, we need to protect the taxpayers and the victims. Everything in our strategy is predicated on that three-legged stool."
The proposal, which must be passed by Friday, was created at Newsom's behest by lawyers and investment analysts, aims to help utilities cover the costs incurred by wildfire damage without going belly up.
But some legislators think the state should be funneling some of its existing surplus into wildfire prevention and costs rather than charging rate-payers. Consumer advocates are concerned about utilities figuring out a way to make this fund profitable rather than protective.
The plan would add a monthly $2.50 surcharge to rate-payers' bills to raise the $10.5 billion. That amount would then be matched by the utilities to create a fund for the companies to dip into to pay for wildfire damages if their insurance policies become exhausted. Monies from the fund could also be used to cover costs that go beyond what their insurance policies cover, acting as a back-up plan of sorts.
Under the proposal, the utilities would pay claims for 2017 and 2018 before being allowed to access the fund. Whatever amount the utilities may use would be viewed as a loan to be paid by back to the state.
To use the fund, PG&E and the other utilities would have to toe the line.
"It's all about safety," Newsom said. "We focus on deep reforms at PG&E, we tie compensation to safety, and we put a timeline and a date on getting them out of bankruptcy as a predicate for entering in and engaging with any of these fund alternatives."
