By Eliyahu Kamisher and Michelle Ma | Bloomberg
California lawmakers have reached an initial agreement to shore up the state’s wildfire utility fund.
The agreement was filed into legislative text on Wednesday after lawmakers suspended a Tuesday deadline. The move confirmed earlier reporting from Bloomberg News.
The boost will be around $18 billion, according to people familiar with the negotiations who asked not to be named because the information is private. The agreement would see ratepayers contribute half of the money and utility shareholders contribute the other half, according to the people. The proposal is aimed at stabilizing utilities’ finances and limiting shareholder losses.
The move comes after January wildfires that devastated the Los Angeles area put the California Wildfire Fund at risk of being depleted. Potential liabilities from fires in the state have increased risks for utilities such as Edison International and PG&E Corp.
Established in 2019 after liabilities from the Camp Fire and other blazes sent PG&E into bankruptcy, the $21 billion fund currently has more than $13 billion in assets, according to the state. The state’s investor-owned utilities can pull from the fund to cover fire-related damages exceeding $1 billion.
The deal will still need to be voted on by both state legislative chambers in Sacramento and signed by Gov. Gavin Newsom.
Shares of Edison International jumped as much as 3.1% on the news, before paring gains. PG&E rose as much as 7.5%, before trading up about 3% as of 12:54 p.m. in New York.
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