An $18 billion proposal involves contributions from utility companies and ratepayers to a state fund. Current non-bypassable charges on utility bills, ending in 2035, would be extended to 2045. Utilities prefer ratepayers to shoulder the entire burden. The agreement introduces caps on insurance recoveries against utilities, lowering the maximum recovery from 70% to 40%. Recovery costs will shift from electric utility ratepayers to policyholders in high-risk fire areas. Legislation includes provisions for studying wildfire cost management.
"Currently, utility customers see a fee on their monthly bill, which is called 'non-bypassable charges,' that are set to end in 2035. The proposed legislation would extend these charges to 2045."
"A second, and possibly more significant aspect of the agreement being hammered out is that it places limits on how much money insurance companies can recover against fire-sparking utilities."
"If State Farm paid out $1 million to a policyholder for a loss on a utility-caused fire, they could recoup a maximum of $400,000 from that utility."
"The cost of recovering from wildfires will shift slightly from electric-utility ratepayers, who live everywhere in the state, to insurance policyholders, who pay more in areas with high fire risk."
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