California built a roughly $20 billion fund to keep its utilities solvent after their equipment burns down towns. Last year, the Los Angeles inferno nearly drained it — and a few weeks ago the state government's scramble to amend the wildfire liability system itself ended in collapse. A last-minute compromise bill, SB 492, fell apart on the Assembly floor, leaving some of the biggest questions in American disaster finance unanswered heading into a new governor's term.
To unpack the full story of the Golden State's wildfire liability mess, Dave Jones — former California Insurance Commissioner and current director of the Climate Risk Initiative at UC Berkeley's Center for Law, Energy and the Environment — joins the pod, sharing his expert insights from years within and outside the system.
At the heart of the problem is California's strict liability standard. This means when a utility ignites a fire, it owes the damages, whether or not negligence was to blame. It's this standard that pushed PG&E into bankruptcy after the 2018 Camp Fire, and it's the reason behind the current backstop fund, paid for by utilities' ratepayers and shareholders alike.
Dave walks through how the fund works, how it sits within the broader system, and what's missing in the current debate on financing wildfire recovery and prevention.
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Louie Woodall
Editor
