Paying for Wildfire Resilience in California

A client project for California's Office of Energy Infrastructure Safety on how to fund utility wildfire mitigation without overburdening ratepayers.

Client project for the California Office of Energy Infrastructure Safety (OEIS), supervised by Steve Weissman of the Goldman School of Public Policy, UC Berkeley, 2024

At a glance

Client California Office of Energy Infrastructure Safety
Role Team of three; I wrote the analysis of current ratemaking reforms and the executive summary
Methods Review of legislation, regulatory proceedings, and utility wildfire mitigation plans; comparison with other states' approaches
Skills Utility ratemaking, cost allocation, affordability analysis, client writing

The question

California’s investor-owned utilities recover most of their wildfire mitigation spending through customer rates. As wildfires grow more frequent and severe, those costs keep rising, and they fall hardest on households that already struggle to pay their bills. OEIS asked how the state could fund a more resilient grid without making electricity less affordable.

Residential rates and the wildfire share of utility revenue, from CPUC and Cal Advocates reports.

What I did

  1. Ratemaking reforms. I assessed the reforms already under way to how wildfire costs are built into rates, weighing their strengths, weaknesses, and effects on affordability.
  2. Alternative financing. With my teammates, I compared other ways to share the cost, including taxes, municipal fees, public-private partnerships, insurance adjustments, and federal and state grants, and looked at what California could learn from other states.
  3. Executive summary. I wrote the summary that distilled our recommendations for the client.

What it shows

California's largest pools of wildfire money and who pays into them. SB 254 was enacted in 2025, after our report.
  • Customers carry the grid work. Mitigation spending is recovered through rates; shareholders mainly share the cost of the damage funds.
Options for sharing the cost, with examples from California and other states. Some examples postdate our 2024 report.
  • Every alternative moves the bill somewhere. Shifting costs off rates helps low-income customers but competes with other public spending; keeping them on rates works only if the financing gets cheaper.

The final report was prepared for OEIS. Contact me to discuss the analysis.