California’s wildfires are adding as much as $41 a month to residents’ utility bills, according to a new government report.

“Wildfire risk is not just an occasional catastrophe, but a recurring cost embedded in the state’s economy,” the California Earthquake Authority said in the report, released April 7. The authority manages a $21 billion wildfire fund that helps pay claims against utilities.

According to the report, customers of Pacific Gas & Electric, the state’s largest utility, now pay an average of $41 a month in wildfire-related charges, equal to about 19 percent of a typical bill.

Customers of Southern California Edison and San Diego Gas & Electric, the state’s second- and third-largest utilities, pay an added 17 percent and 14 percent, respectively—about $27 a month for Edison customers and $21 for SDG&E customers.

This report is not the first to show the high cost California customers are bearing for wildfire-related expenses. From 2019 through 2023, the California Public Utilities Commission authorized the three utilities to recover a combined $27 billion in wildfire prevention and insurance costs through customer bills, according to the commission’s 2024 report to the state legislature.

Those wildfire-related costs add to what is already one of the nation’s most expensive electricity markets. The most recent federal data show that, as of January, California’s average residential electricity rate stood at 30.29 cents per kilowatt-hour—among the highest in the continental United States and almost double the national average.

Californians have seen their energy bills rise 39 percent over the past six years, by far the largest increase of any state, according to an analysis published in February by University of California Berkeley’s Haas Energy Institute. The study partly attributed the surge to destructive wildfires that have swept through Los Angeles and other parts of the state in recent years, as well as California’s costly transition away from fossil fuels in favor of renewable energy.

That transition has included rooftop solar subsidies, upgrades for electric vehicles, and other policy-driven costs that have largely been passed on to ratepayers.

Proposed Overhaul of Wildfire Liability and Insurance

In its report, the California Earthquake Authority recommended ending utilities’ liability for accidentally starting wildfires and creating new programs to help property owners reinforce and rebuild their homes after major fires. Under current state law, utilities can face billions of dollars in damages if their equipment is found to have sparked a wildfire.

The report also proposes creating a new state-chartered entity backed by $25 billion to serve as the insurer of first resort for catastrophic wildfire coverage. That entity would replace the FAIR Plan, which was once a last resort option for homes in high-risk fire zones but is now increasingly covering properties in lower-risk urban neighborhoods as private insurers continue to pull back.

Since 2017, a series of major wildfires, including last year’s in Los Angeles, has caused tens of billions of dollars in damage. Those disasters have prompted many insurers to restrict coverage or stop doing businesses in California altogether, leaving the FAIR Plan the most viable option for hundreds of thousands of homeowners.

Under the report’s proposal, private insurers could continue offering standard homeowner policies in fire-prone areas, while the state-backed entity would assume the most severe wildfire risk. The report’s authors said the change is not expected to lower premiums but could help stabilize the market and expand access to coverage.