Utilities agree to pay into wildfire mitigation fund

Pacific Gas & Electric Co. and Southern California Edison Co. said Thursday they would pay into a multi-billion-dollar wildfire mitigation fund created by the state of California.

The news was widely expected after Gov. Gavin Newsom signed AB 1054 on July 12. The bill calls for the state's three investor-owned utilities to pay $10.5 billion into the fund, an amount to be matched by ratepayers. Utilities can access the money to offset the costs of fires started by their equipment, but were required to pay in their shares before they could do so.

PG&E, the largest of the utilities and the one carrying the most fire liability, will pay roughly half the total. According to a news release, the company will pay $4.8 billion up front once it emerges from Chapter 11 bankruptcy. This will be followed by annual payments of $193 million.

Edison said it will make an initial contribution of $2.4 billion followed by annual payments of $95 million. San Diego Gas & Electric previously confirmed it will pay $450 million over a multi-year period.

The fund was created in part to offset threats by ratings agencies to downgrade the utilities, which in turn would affect their ability to borrow money and remain solvent. Under the terms of the bill, the utilities cannot make their fund payments from money paid by ratepayers.

-- Malcolm Maclachlan