SACRAMENTO (CBS13) — The next big wildfire could mean more than major destruction to the communities in its path. Its costs could be felt by homeowners hundreds of miles away.
A new report predicts PG&E rates could double if the company is found responsible for another disaster. The math is pretty simple here — PG&E’s annual revenue is about $17 billion and the company is facing an estimated $30 billion in liability.
Rate increases of 100% are one possibility for PG&E customers, according to a new report now in the hands of Governor Gavin Newsom. The report describes recent wildfire costs as unsustainable with likely dire results for power customers.
Mark Toney heads the Utility Reform Network.
“Skyrocketing rates. We’re talking about rates that may double. It is absolutely untenable,” Toney said. “We are absolutely against any sort of ratepayer bailout. Let’s come up with other funds.”
Steven Weissman with the UC Berkeley Goldman School of Public Policy helped prepare the report for Governor Newsom.
“The money has got to pop out somewhere in the economy of the state of California,” Weissman said. “And it’s most likely that it’s going to hit all of us in one form or another.”
Weissman says wildfires have caused more than $36 billion in damages over just the past two years, and that cost is going to land somewhere.
Friday, the governor will lay out his plan for covering wildfire costs. One possibility is a statewide risk pool, but, like a rise in insurance rates, that will also cost Californians money. It’s hard to see these costs going away as long as we face fires that are this destructive.
“And the question is, what are the steps we can take to change the direction we’re going in now,” Weissman said.
In a statement Thursday, PG&E said: “It is clear that more needs to be done to adapt and address the threat of extreme weather and wildfires.”
The governor is expected to speak about this Friday.