Gov. Gavin Newsom proposes $21 billion fund to compensate future victims of California wildfires, stabilize utilities

Jun. 22--Gov. Gavin Newsom on Friday proposed creation of a $21 billion wildfire recovery fund to help PG&E and other California utilities pay for damages to victims from future wildfires, but the fund does nothing for the thousands of California residents burned out of their homes in 2017 and 2018.

Nearly 6,200 North Bay homes were destroyed and 40 people died in the October 2017 conflagrations, which exacted the heaviest toll in Sonoma County. No action by lawmakers last year or anything in the governor's new plan directly addresses losses by present fire survivors.

"It seems like we're getting left out," said Brad Sherwood, a block captain in Larkfield Estates, where 163 homes were lost to the Tubbs fire.

Newsom's plan would require utility investors and ratepayers to contribute to the fund, which would "provide ready dollars" to pay future claims and allow power companies to "stabilize their financial health" in order to provide safe and affordable energy, his proposal said.

"Financially unstable electric utilities will put wildfire victims in jeopardy and cause California families' electrical bills to skyrocket," the governor's statement said.

PG&E, the state's largest utility, would be prohibited from accessing the fund until it resolves claims from the 2017 and 2018 wildfires and exits bankruptcy with a reorganization plan that is "neutral to ratepayers" and concluded by June 30 of next year, the proposal said.

PG&E equipment was deemed responsible for causing 17 of 18 of the Northern California wildfires that broke out in October 2017, according to Cal Fire. The exception was the Tubbs fire, which destroyed more than 4,600 homes, mostly in Santa Rosa, but was linked to privately owned and maintained power equipment.

The utility filed for bankruptcy protection in January facing billions of dollars in liabilities from the past two years of wildfires, including the largest, deadliest and most catastrophic on record in California.

Of the state's top 20 most destructive fires, 13 have come in the past 12 years, and at least eight of those have been sparked by utility- or privately owned power equipment, according to Cal Fire.

"Climate change has created a new reality in the state of California," Newsom said in a statement. "It's not a question of 'if' wildfire will strike but 'when.'?"

In the past two years, more than 16,000 wildfires have charred nearly 3 million acres statewide. Nearly 1,400 fires have scoured about 12,000 acres so far this year, about half the number and acreage of the same period in 2018, Cal Fire reported.

The governor's plan also requires power companies to collectively spend at least $3 billion on safety improvements from which shareholders cannot profit.

Patrick McCallum, a Sacramento lobbyist and co-chairman of the wildfire victims group Up from the Ashes, said the governor's plan merits support.

"It protects future victims and their constitutional rights," said McCallum, who lost his Fountaingrove home in the Tubbs fire. The plan also "brings financial stability to the state's energy markets" and will in the long run reduce rates.

"It's very ratepayer friendly," he said.

Separately, however, PG&E and the state's two other investor-owned utilities have asked regulators to increase the profit they are allowed to make to cover wildfire costs.

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