PG&E Corp., the state’s largest utility, tumbled into bankruptcy after its equipment sparked fires that killed more than 100 people and destroyed thousands of homes. The utility emerged from Chapter 11 last year, having settled claims for $25.5 billion that will be covered by the company’s shareholders. California’s three big investor-owned utilities could spend an estimated total of $40 billion on wildfire prevention over the next decade, according to a recent state report.
To pay for that work, the average California utility customer will see an additional charge on their bill this year that is estimated to be in the range of $96 to $144 a year, according to the state report. By 2030 those charges will likely rise by another $30.
Handling those costs through utility rates presents a small part of a big climate problem: inequality. Rates tend to be more regressive than taxes, with a larger impact on low-income households than wealthier families. “We’re not thinking systematically on this,” Wara said.
Considering the costs Americans already incur responding to climate-related disasters, spending more to prevent them or reduce their impact may seem a hard sell for politicians. Roy Wright, chief executive officer of the Insurance Institute for Business and Home Safety, says such investments can “absolutely save money,” just as pre-emptively strengthening a roof can help a home survive a major storm.
“They don’t eliminate the storm, they don’t eliminate the wildfire,” said Wright, who used to serve as the chief executive of the National Flood Insurance Program. “But they can narrow the impact.”
-With assistance from Brian Eckhouse.
This article was provided by Bloomberg News.