Who Pays for Wildfire Prevention? If You’re in California, You Do — in Your Power Bill.

California now has the most expensive electricity in the continental United States. It also has expensive housing … and an increasingly broken home insurance market.

Are the three phenomena linked? They might be. Due to a peculiarity in the state’s constitution, electricity utilities are incentivized to pay for a huge amount of wildfire prevention, above and beyond what would be seen as economically reasonable in another state. Fixing that constitutional peculiarity could help bring down energy costs and heal the home insurance market, but it will be complicated — and a number of policies will need to get passed at the same time.

That’s what Lauren Teixeira argues in her new report, “Rewiring Risk.” Teixeira, a senior climate and energy analyst at the Breakthrough Institute, joins Rob for today’s episode of Shift Key. They discuss how California found itself in this situation, how it might be fixed, and why the state treats utilities as a sin-eater for wildfire risk.

Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.

You can find a full transcript of the episode here.

Mentioned:

Lauren’s report: Rewiring Risk

Rethinking Utility Wildfire Risk in California

Previously on Shift Key: How California Broke Its Electricity Bills

Previously on Shift Key: How Wildfires Destroyed California’s Insurance Market

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This episode of Shift Key is sponsored by ...