View this article online: https://www.insurancejournal.com/news/west/2019/07/26/534041.htm
All three of California’s investor-owned utilities have now signed off on the creation of a $21 billion wildfire fund that any one of them could tap the next time a power line sparks a catastrophic blaze.
PG&E Corp., which was forced into bankruptcy in January amid crippling fire liabilities, said Thursday that it would kick in an initial $4.8 billion for the insurance-like pool. Sempra Energy said last week that it would commit $450 million. Edison International was the last to chime in, confirming late Thursday that it would participate and pitch in $2.4 billion.
The fund was a crucial part of legislation that California lawmakers rushed to pass earlier this month as the state heads into yet another wildfire season. Without it, utilities owned by both Edison and Sempra were facing junk ratings and PG&E faced the threat of more liabilities on top of the estimated $30 billion that it’s already dealing with. PG&E’s equipment has been tied to the Camp Fire — the deadliest blaze in state history that killed 85 people in November.
Edison’s Southern California Edison said it will put an initial $2.4 billion into the fund by September 10 and make additional annual payments of $95 million for ten years, according to a statement Thursday. Edison said the initial contribution will take a bite out of its profits with the company lowering its adjusted 2019 earnings-per-share guidance range to $4.61 to $4.81 from an earlier estimate of $4.72 to $4.92.
In total, the three utilities were required to provide $10.5 billion with an additional $10.5 billion coming from state bonds if they wanted an insurance fund.
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