LOS ANGELES, June 21 (Reuters) - California Governor Gavin Newsom has proposed a fund of up to $21 billion to help utilities pay for future wildfire damage, according to media reports on Friday.
The proposal by the state’s Democratic governor follows the bankruptcy filing of San Francisco-based utility PG&E Corp, which anticipates $30 billion in liabilities from wildfires in 2017 and 2018 that have been blamed on its equipment.
Newsom has proposed two models for the fund, according to media reports.
One model would place the reserve at $10.5 billion, to be funded by a surcharge on electricity bills, and the second model would raise the value to $21 billion fund by including a multi-billion dollar insurance policy paid for by utilities, the Wall Street Journal reported.
PG&E and California’s two other major utilities, Southern California Edison and San Diego Gas & Electric would have to spend a combined $3 billion on wildfire safety measures to qualify for the insurance component of such a fund, the Sacramento Bee newspaper reported.
Southern California Edison and San Diego Gas & Electric would decide if they prefer a $10.5 billion fund or the $21 billion fund and PG&E would be forced to join whatever option they chose, the Wall Street Journal reported, citing details from the governor’s aides.
A representative for Newsom could not immediately be reached for comment.
The proposed fund would need to be created by lawmakers in the state legislature.
Separately, Bloomberg reported that PG&E Corp has been proposing a $14 billion fund to deal with past claims from wildfires. (Reporting by Alex Dobuzinskis Editing by Susan Thomas)