BERKELEY (CBS SF) – An advisor to Gov. Gavin Newsom predicts PG&E bills could skyrocket if California continues to have devastating wildfires.
“If wildfires persist at the levels we have experienced recently, and all customers of the major electric utilities had to bear the burden, average rates throughout California would have to increase by 50 percent in the first year, alone,” Steven Weissman of the UC Berkeley Goldman School of Public Policy said in a memo to the governor’s office.
Weissman said that wildfires in the state in just the past two years have caused more than $36 billion in damages.
“Those kinds of wildfire losses are unsustainable for utility customers,” Weissman said.
In an interview with KPIX 5, Weissman said it comes down to simple math.
“If PG&E currently collects about $13 billion in revenue and could potentially face as much as $15 billion in liabilities in a particular year from the fire, there’s obviously not going to be a lot of room within existing revenues to pay that off and still provide service,” he said.
Weissman added that rising electricity costs could have a ripple effect across California’s economy and even harm the state’s ambitious efforts to reduce dependence on gasoline.
“It’s going to be much more of a challenge to convince people to switch from using gasoline to use electricity for their cars,” he said.
In a statement to KPIX 5, the San Francisco-based utility said, “It is clear that more needs to be done to adapt and address the threat of extreme weather and wildfires. We welcome this constructive dialogue and are open to a range of solutions that will make the energy system safer and safeguard California’s clean energy future.”
“This is a complex issue and we will continue to work with our regulators, policymakers and the Commission on Catastrophic Wildfire Cost and Recovery to identify comprehensive solutions to address this ever-increasing threat and safeguard our customers and communities,” PG&E went on to say.
Ratepayer advocates are decrying the possibility of such rate increases. “We are absolutely against any sort of ratepayer bailout. Let’s come up with other funds,” says Mark W. Toney, head of The Utility Reform Network. “We’re talking about rates that may double. It is absolutely untenable.”
Toney says the costs should be covered by insurance, not ratepayers. As for power companies like PG&E, Toney says shareholders should have to cover any fire liabilities. “If the shareholders cry and complain that they don’t have enough money, let them have a payment plan that lets them pay over 10, 12, 20 years.”
Newsom’s office is expected to roll out a plan to deal with wildfire costs on Friday.
“We’re going to have these fires and the question is can we find ways to keep the fires from spreading and lasting as long as they have been lately,” Weissman said.