State commissioners meet in Santa Rosa to discuss how to pay for future fires

State officials wrestled Wednesday at a meeting in Santa Rosa to find ways for homeowners to afford insurance in fire-prone areas and for PG&E and other utilities to survive liability from devastating wildfires that threaten to worsen with climate change.

One option they discussed is the creation of a new state catastrophe fund backed by tens of billions of dollars.

The North Bay wildfires in 2017 and the deadly Camp fire in 2018 partly prompted PG&E to file for bankruptcy protection and led to the creation of a five-member board that is considering who should pay in the future for increasingly destructive wildfires.

Officials have until ?July 1 to make recommendations.

Gov. Gavin Newsom plans to outline his plan to address the problem by mid-April.

California’s recent past “is fraught with wildfires,” Chief Deputy Insurance Commissioner Joel Laucher told board members gathered at the Sonoma County government administrative campus. “This is the world that insurers are looking at.”

The danger is making it harder for people to get or afford home insurance, frustrating residents who may have moved decades ago to rural areas in search of cheaper housing in a natural setting.

Courts and regulators have piled the financial burden of the fires on utilities, leading Moody’s Investors Service to downgrade credit ratings for California’s three big investor-owned utilities.

Courts have ruled that utilities are entirely liable for damage caused by their equipment, even if they followed all safety precautions. Regulators, meanwhile, have saddled utility investors with the legal burden for fires caused by mismanagement of electrical equipment.

Before the Camp fire last year, legislators also approved a new law, signed by Gov. Jerry Brown, that allows PG&E to pass on some of the costs from the 2017 fires to ratepayers.

A fund could help stabilize utilities, but the extent of the help depends on “unresolved questions” including the size of the fund and how it addresses wildfire costs, Moody’s said.