Gov. Newsom has one last chance to rein in wildfire costs on our electric bills

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OPINION — Electricity bills have skyrocketed over the past few years for residential and business customers of Pacific Gas & Electric, SoCal Edison and San Diego Gas & Electric — in large part because of the $40 billion customers have paid to cover California’s wildfire costs.

Two electricity affordability bills sitting on the Governor’s desk — Senate Bill 905 and Senate Bill 1098 — would deliver real relief on wildfire costs. The failure of a larger effort to reform wildfire costs in the final hours of session only raises the stakes: this may be Gov. Newsom’s last chance, in his final year in office, to act on the single largest driver of rising electricity rates.

The core problem is simple: California utility customers are covering unchecked and ever-increasing wildfire costs through their monthly bills. Customers pay for the cost of making the grid safer — including undergrounding power lines at up to $6.1 million per mile — as well as the cost of rebuilding after catastrophic wildfires. One in every five dollars PG&E customers pay on their bills now goes toward wildfire-related costs.

The pace of these increases is unsustainable. Ultimately, California lawmakers will need to adopt a wildfire reform package to distribute costs more fairly, so that ratepayers aren’t the insurer of last resort. But we can still make progress this session — and with costs still climbing, we can’t afford not to.

SB 905 would help ensure utilities don’t get overpaid for work that already benefits the company by requiring the California Public Utilities Commission to examine whether the profit margins utilities earn on wildfire-related spending — like undergrounding power lines — are justified. This work already protects utilities from costly wildfire lawsuits, and that protection shouldn’t come with an extra reward: outsized profit margins billed to customers who are struggling to keep the lights on.

SB 905 would also guard against grid overspending by requiring utilities to make full use of infrastructure customers have already paid for, instead of charging them again for new, costly upgrades that aren’t yet necessary.

SB 1098 takes on a different piece of the same problem. California should close the loophole that lets utilities bill for wildfire costs through so-called “memorandum and balancing accounts,” treating customers like a credit card with unlimited charges and little regulatory oversight. There’s already $9.31 billion in wildfire-related costs sitting in these accounts across the state’s three investor-owned utilities — costs that could still land on customers’ bills. SB 1098 would close this loophole by limiting these accounts to truly unforeseeable expenses, forcing utilities to stick to their budgets.

This session can still be a win for California electricity customers, who already pay the highest rates in the continental United States — even without a larger wildfire reform package — but only if Gov. Newsom signs SB 905 and SB 1098 into law to start protecting utility customers from runaway costs. This is California’s opportunity to provide the real relief ratepayers urgently need. We can’t miss it.

Mark Toney is the executive director at The Utility Reform Network (TURN).