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Lawmakers probe securitization, state funds, biomass and liability limits as alternatives to ratepayer funding
Summary
The Assembly heard a range of funding and liability options — from securitization and expanded use of the Greenhouse Gas Reduction Fund to vehicle‑miles‑traveled mitigation credits and a biomass economy — and discussion of possible liability‑limiting legislation for utilities.
The committee’s second panel focused on how to finance wildfire prevention and whether liability rules should change to stabilize utility borrowing costs and rate impacts.
Helen Christine, principal fiscal and policy analyst at the Legislative Analyst’s Office, summarized state funding to date. She told lawmakers that state wildfire resilience spending has increased in recent years — including a $200,000,000 annual continuous appropriation from the Greenhouse Gas Reduction Fund (GGRF) created in SB 901 and additional one‑time packages — but that state resources are limited and the general fund faces projected deficits in coming years.
Nathaniel Skinner of the Public Advocates Office urged tools that lower financing costs and reinforce fiscal discipline. He said broader use of securitization for large, long‑lived capital projects could reduce customer costs over time: on previously authorized undergrounding recoveries totaling roughly $6,000,000,000, securitization could reduce customer costs in the near term and produce hundreds of millions in savings over multiple years. Skinner warned against securitizing routine yearly expenses such as annual vegetation management, which he said should continue to be paid in the normal revenue cycle rather than capitalized.
Sam Uddin of Net Zero California described longer‑term alternatives the committee might consider. He estimated statewide vegetation management and related resilience needs at roughly $6–7,000,000,000 per year and proposed a mix of options that could scale: increasing GGRF appropriations for wildfire resilience, creating vehicle‑miles‑traveled mitigation credits to preserve open space in the wildland‑urban interface (a potential late‑stage demand source for preventive projects), and building a timber/biomass processing economy so treated forest residues could generate products and revenue to finance future treatments.
Several witnesses and members raised liability and permitting as policy levers. Randy Howard and other POU representatives urged expedited approvals on state and federal lands for vegetation management and rights‑of‑way work and said legislatures in several other western states have pursued liability frameworks that cap certain utility exposures in exchange for compliance with mitigation obligations. Howard argued that clearer liability rules could help reduce insurance and borrowing costs that ultimately are reflected in rates.
Committee members asked detailed follow‑ups about tradeoffs, where state money would go, how securitization affects investors, and how credits or biomass markets would be administered. No single funding approach was endorsed; members said the hearing offered multiple options to evaluate in the coming months.
