photo credit: Flicker/Rex Hambly

PG&E will likely be the first utility to access California’s wildfire liability fund, after the company’s equipment started the massive Dixie Fire.

In 2019, California had a utility crisis.

The state’s biggest electricity providers were causing increasingly deadly and costly wildfires. PG&E had already declared bankruptcy as a result.

It was one of Governor Gavin Newsom’s first big tests in office.

“This is a serious moment," Newsom said at the time. "And as I’ve said, I’ll remind you, it’s not just about turning on your lights, it’s not just about paying your electric bills. It’s literally about the economy of this state.”

The governor and lawmakers had only a few months to figure it out. So they put together a $21 billion fund that would help cover the cost of wildfires caused by utilities.

The companies pay for half of it; customer rate increases make up the rest.

Michael Wara is a senior research scholar at Stanford University. He expects PG&E will be the first to tap into the pot of money.

“It's a good dry run, frankly, for the fund," Wara said. "Because there's a whole bunch of processes that need to be established and tested so that the fund is really ready.”

Utilities have to cover up to a billion dollars in damages before accessing the fund.

PG&E expects claims from the Dixie Fire, the second largest blaze in state history, to only slightly exceed that $1 billion threshold.