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This post is part of a series examining Enhancing California’s Resiliency to Natural Catastrophes, a report prepared by the California Earthquake Authority in response to Senate Bill 254. The report presents policy options for addressing California’s interconnected wildfire, insurance, and electric utility challenges. In this blog, we assess the report’s insurance-related proposals and consider how California can strengthen the connection between wildfire risk reduction and insurance.
California’s homeowner’s insurance market has come under significant strain as growing wildfire risk drives more frequent and costly insurance claims. The impacts of rising wildfire risk have led insurers to raise premiums, limit coverage, and withdraw from high-risk areas, making insurance harder to find and less affordable.
Insurance is the single most important tool to help households rebuild and recover after a disaster. Insurance helps households recover and recover more quickly, making it essential to building financial resilience in a changing climate. Insurance also underpins the rest of the economy, particularly real estate. It is required for your mortgage when you buy a home. When insurance is harder to find and less affordable there are spillover impacts into the housing market and direct impacts on the ability of communities and households to recover after a disaster.
Between 2025 and 2022 California insurance premiums in high-risk areas rose by 80%. Additionally, as more insurers reduce coverage in high-risk areas, more and more Californians are turning to the state’s insurer of last resort, the CA FAIR Plan, for coverage. From 2019 to 2025, the CA FAIR Plan grew by more than 200%. In recent years, the California Department of Insurance has taken important steps to stabilize the market through the Sustainable Insurance Strategy (SIS) and continuing to advance the SIS remains an important north star for the state’s future. But, unless steps are taken to reduce the underlying risk, costs will continue to grow and coverage will become harder and harder to find through the private market.
EDF’s work on insurance continues to demonstrate that the only long-term solution to improve insurance access and affordability is through risk reduction. Home hardening and defensible space can reduce the vulnerability of an individual property, community-scale mitigation can limit ember and structure-to-structure spread, and landscape treatments can alter a fire’s behavior before it reaches a neighborhood. Coordinated investment in risk reduction across these scales – homes, communities, landscapes – is necessary to meaningfully reduce risk and improve insurability. By helping to reduce future claims, risk reduction can pave the way for insurers to offer more coverage and reduce costs to policyholders.
Safer homes and communities should also be more insurable homes and communities. When mitigation reduces losses, that reduction should be reflected in insurance availability and cost. Too often, however, homeowners and communities invest in wildfire risk reduction without seeing a clear improvement in insurance cost or availability of coverage. And, despite the importance of risk reduction too often insurance underwriting and pricing fail to consistently recognize the full range of home and community mitigation measures.
The California Department of Insurance, as part of the SIS, has taken the important step of requiring insurers to consider a variety of wildfire mitigation strategies in their pricing, including home hardening and defensible space, as well as offering community-wide discounts for those in a Firewise USA Community. The SIS mandate, however, does not establish specific discounts for these activities and research shows that mitigation is unevenly rewarded from insurer to insurer. There also remains limited transparency for policyholders about what discounts are available and how they may impact their insurance costs.
This uncertainty makes it difficult for households and communities to prioritize mitigation actions and have confidence those investments will both risk reduction and improve insurance outcomes. The SB 254 report rightly calls for a tighter, more reliable connection between risk reduction and insurance.
Californians need more definition around which property- and community-scale actions qualify, how their effectiveness will be verified, and their associated discounts. To help communities better plan and prioritize mitigation investments that reduce risk and improve insurability, the California Department of Insurance must consider ways to ensure insurers consistently, predictably, and transparently recognize mitigation known to reduce wildfire losses. Deepening this connection is a win-win for insurers and Californian homeowners because it can ensure that mitigation reduces damages and insurance costs.
Insurance should recognize mitigation before a disaster, but it can also help households reduce future risk during the rebuilding process. After a wildfire, the rebuilding process is an important opportunity to make homes more resilient to future disasters. But too often post-disaster rebuilding just replaces the exact structure that was there before the disaster, perpetuating future losses and further straining the insurance market.
The SB 254 report proposes Build-Back-Better insurance endorsements, an idea researched and supported by EDF, as a way to help households cover the costs of wildfire-resistant materials and increase their likelihood of rebuilding to this more resilient standard. A Build-Back-Better endorsement provides additional funding as a part of the claims process to help policyholders with the costs associated rebuilding to wildfire resilient standards. Endorsements are a commonly used tool by insurers to provide additional coverage not included in standard insurance policies. And Build-Back-Better endorsements already being used in other parts of the country to support extreme weather retrofits such as the installation of hurricane-safe roofs. Given the effectiveness of driving change and lowering insurance losses, some states now require insurers to offer endorsements to all policyholders. But, these do not yet exist for wildfire. California could be a leader in advancing this solution for wildfire by requiring insurers to offer Build-Back-Better endorsements that provide additional money at the time of the claim to cover some wildfire-related home hardening activities that are also eligible for premium discounts.
Deploying this solution could lower future losses, improve insurability, and lower insurance costs for homeowners.
The SB 254 report includes some deeply problematic concepts that could jeopardize any hopes of a stable more affordable insurance market in California. Bold and creative solutions are going to be essential as we take steps to stabilize the California insurance market. But, any overhaul should be carefully evaluated to minimize future problems or create new undue burdens are residents and the state.
In particular, the SB 254 report contemplates pulling wildfire out of homeowners insurance and placing it into a state-backed insurance program. Insurance works best when risks are diversified. Concentrating a risk doesn’t shrink it, and as the report notes, putting wildfire into its own insurance program could result in higher costs for policyholders and more expensive reinsurance. Such a program would not be cheap, the SB 254 report’s own analysis estimates that a state-sponsored wildfire insurer could require up to $25 billion in capital.
Addressing gaps and affordability in California’s homeowners insurance market driven by growing wildfire risk is a must, but we should reflect on the cautionary tales from other single-hazard insurance programs. Both the federal National Flood Insurance Program –the main source of flood insurance for Americans—and the California Earthquake Authority face significant challenges around debt and policy uptake. It remains extremely challenging to design this type of state-backed insurance program in a way that avoids mounting debt and the political pressures that prevent insurance from being offered at a cost that reflects the actual risk. And, even when actuarial pricing is possible, without diversification of the risks, the price tag can quickly become cost-prohibitive for policyholders. We also continue to see low-enrollment in many of these similar programs, with households often confused or unaware they are required to purchase a separate policy. Without careful design and consumer outreach, instead of filling a gap, it can leave people without the coverage they need to meaningfully recover after a disaster.
Another idea that needs to be considered carefully is eliminating insurance subrogation as this step could threaten the stability and affordability of homeowner’s insurance. This is a process where insurance companies can seek reimbursement for claims paid from utilities if the utilities are at-fault for a wildfire. Eliminating subrogation could reduce some of the financial burdens placed on utilities, but as the SB 254 report indicates it could cost the insurance industry billions of dollars. It’s likely this would translate into more expensive policies and limited coverage, imposing greater insurance affordability and access issues for Californians.
Building Californians’ wildfire resilience and insurability is best done through investment in mitigation. For those that may continue to struggle with the cost of insurance, piloting a targeted means-tested assistance program could help address affordability challenges. We must avoid the pitfall of creating a program meant to improve protection that instead raises costs and leaves families exposed when the next major wildfire hits.
Addressing the state’s insurance crisis will not happen overnight. California has already taken important steps through the SIS and other actions to improve coverage and affordability of insurance for Californians. Continuing to advance the SIS is imperative, but it must be paired with investment in mitigation and improved transparency and clarity around the risk reduction that is reflected within insurance costs. By reducing expected wildfire losses, California can build a more stable insurance market, that expands access to affordable coverage, and helps communities become safer and more resilient.
Expert contributors to this blog series include Jenna Knobloch, Katelyn Roedner Sutter, Michael Colvin and Katie Roback from Environmental Defense Fund and Jeremy Sokulsky and Brynn O’Donnell from Environmental Incentives.
By Ben Jones & Veronica Ung-Kono
The Western power grid is increasingly strained by rapid load growth, surging demand to interconnect new power sources, extreme weather and pressure to deliver affordable electricity. Proactively planning interstate electric transmission lines –the high voltage wires that transport cost-effective and clean power across long distances – is essential to addressing these challenges.
Unfortunately, the West’s transmission system is antiquated, and transmission expansion throughout the region has largely remained limited to small, local projects that connect utilities’ generators to population centers inside their own service territories. The piecemeal nature of such projects prevents them from realizing the cleaner, more affordable and more reliable power that regional transmission can bring.
To address nationwide shortfalls in regional transmission planning, the Federal Energy Regulatory Commission (FERC) issued Order No. 1920 in 2024. This order requires each transmission planning region to initiate long-term, scenario-based regional transmission planning, using transparent criteria to identify the most valuable regional transmission projects. Environmental Defense Fund is protesting the compliance filing submitted to FERC by the Southwest region’s planning entity, WestConnect, arguing that it contains several violations of Order No. 1920 and would hinder efforts to expand much-needed transmission in the region.
Regional transmission lines spanning multiple utility service territories, along with interregional lines connecting otherwise separate electricity markets, allow power to be delivered from where it is produced to where it is needed most. Long-distance lines enable power to be shared from areas with cheap, excess supply to far-away areas of high demand, reducing the need to build costly new generation locally. A robust regional and interregional transmission network can also route power around damaged or congested portions of the grid, which could help as disasters like wildfires and floods become more common and damaging around the region. Optimizing this network could unlock the West’s abundant clean energy resources, enhance grid reliability, and reduce inefficiencies in the delivery of electricity that contribute to higher costs.
However, the current financial and regulatory structure around transmission incentivizes utilities to avoid regional planning for several reasons, like less regulatory oversight for local projects than regional ones. That’s resulted in a fragmented planning landscape that has failed to develop the regional infrastructure the Western grid increasingly requires. Modest projections indicate the West must build 12,600 miles of new regional and interregional transmission by 2035 with a cumulative price tag of approximately $12.6 billion dollars to meet projected demand from new economic development, population growth, and data center development.
Since 2007, FERC has required utilities to form planning authorities to better coordinate the development of regional transmission projects. WestConnect is the planning authority for the Southwest and is supposed to serve the region’s electricity needs. However, despite federal actions to require utilities to move beyond reactionary construction of local lines and proactively acknowledge the value of regional transmission solutions, the utilities that comprise WestConnect have skirted their responsibility. Instead, they’ve litigated around FERC rules, tried to present a bundle of local transmission plans as a true regional plan and continued to prioritize their own self-interest at the expense of customers facing rising costs and an increasingly unreliable system.
FERC required regional transmission planning authorities to submit their proposed plans for the next three years of projects back in June. EDF has reviewed WestConnect’s proposal, and is arguing that it violates Order No. 1920 in three key ways:
Taken together, these violations seriously undercut regional transmission planning and risk higher costs, unreliability and, ultimately, an electric grid that can’t handle the growing demands facing it. EDF will continue to urge FERC to reject this proposal and not settle for anything less than a plan that meaningfully powers the Southwest’s future.
WestConnect must submit a separate compliance filing to FERC on August 12, 2026, detailing its plans to coordinate interregional transmission planning with its neighbors.
Given the tremendous stakes for costs, reliability and future energy development, state energy offices, transmission developers and other stakeholders in the Southwest should follow WestConnect’s proposal closely as implementation progresses.
This post is part of a series examining ‘Enhancing California’s Resiliency to Natural Catastrophes’, a report prepared by the California Earthquake Authority in response to Senate Bill 254. The report presents policy options for addressing California’s interconnected wildfire, insurance, and electric utility challenges. In this blog, we consider how California can build a coordinated, long-term approach to reducing wildfire risk across homes, communities, and landscapes.
Wildfire risk in California is not confined to a few unlucky zip codes. Nearly a third of the state’s homes sit in the wildland-urban interface (WUI), where homes and other development intermingle with wildland vegetation. In the WUI, a single fire can quickly move from a forest into a neighborhood. Many wildfire-related structure losses have come from urban conflagrations ignited by a wildfire, when structure-to-structure fires spread like those experienced in the Palisades and Eaton Fires in January 2025.
The SB 254 report describes the necessary response as “whole-of-society,” which means that no single agency, industry, or homeowner can reduce this risk alone. Wildfire mitigation must work at three interconnected scales at once. Individual property adaptation, like home hardening and cleared defensible space, is essential to limit a home’s exposure to embers and flames. Community-scale planning and mitigation, such as coordinated vegetation management and scaled home hardening, determine whether a dense neighborhood avoids ember- and structure-to-structure spread while improving the risk-reduction return on investment. Landscape treatments, such as prescribed fire and thinning, can alter a fire’s behavior before it reaches a community.
Taken together, work across these three scales reduces risk at each stage of a fire’s path, from the surrounding landscape, through the community, and to the individual home. Although all three are necessary, community-scale mitigation is relatively underfunded and plays an especially critical role.
Individual action is critical, and homeowners need clear guidance on what effective mitigation looks like. For example, keeping the first five feet around a structure clear of combustible material (i.e., ‘Zone Zero’) can address the most common point of ignition.
Yet homeowners have to navigate multiple standards and recommendations, such as those developed by the Insurance Institute for Business and Home Safety (IBHS), Firewise, and California’s own state standards, each with different requirements. As a result, it can be difficult to know which actions to take and when mitigation is “done.” While mitigation at the individual property level is necessary, it cannot fully protect a home from risks created beyond the property line. Uncertainty about how community standards differ, and what implementation requires, also makes it difficult to estimate the potential cost and impact of mitigation in priority areas statewide. This is an important point, because home retrofits can be expensive.
Fundamentally, community wildfire risk should be considered across a neighborhood, not individual homes. Even a home with hardened siding, ember-resistant vents, and cleared defensible space can remain exposed to considerable risk if nearby properties have taken no action and can contribute to structure-to-structure spread. This is particularly true in areas where structures are less than 25 feet apart.
Because wildfire risk is shared across neighboring properties, meaningful risk reduction requires coordinated action at the community scale. That is challenging to implement, as it means convincing – or compelling – a large number of property owners, parcel-by-parcel, to spend money on work whose benefit depends in part on their neighbors also taking action. High participation levels are often required to significantly reduce neighborhood wildfire risk, and voluntary participation can mean such levels are difficult to achieve. Targeted interventions that consider how fire spreads, not just individual property vulnerability, benefit whole neighborhoods and can improve efficacy of risk reduction investment. However, it is often unclear who is responsible for determining which actions are needed, who pays for them, what workforce is qualified and available to implement them, and whether they will improve insurance outcomes. These challenges make statewide coordination and streamlined administration especially important. The SB 254 report advances both ideas, which merit urgent attention from policymakers.
Strategic, coordinated, and science-informed mitigation is what increases effectiveness and lowers the cost of mitigation activities. This up-front coordination will pay off, not only for action within neighborhoods and communities, but across California. The SB 254 report models the potential savings: a concerted, statewide effort focused on the highest-risk neighborhoods would reduce the amount of catastrophe financing needed by the CA Wildfire Fund by approximately 33%, dropping the total from approximately $36 billion to under $24 billion.
But targeting at that level of precision requires better information about community-level risk. California’s hazard maps capture where a wildfire is likely to start or spread, but they do not fully capture how fire may behave once it enters a developed area. In particular, the maps may underestimate how far a fire travels once structures begin to burn and contribute to structure-to-structure spread. Identifying where mitigation reduces the most risk and tracking progress over time will require building on the existing data and analytical infrastructure across the state. We support action to address the SB 254 report’s proposal to build that statewide capacity.
Landscape-scale treatments can reduce the intensity and spread of wildfire before it reaches developed areas. Practices such as prescribed fire, forest thinning, and fuel breaks can change fire behavior and create safer conditions for communities and firefighters. But landscape treatments cannot eliminate wildfire risk or substitute for mitigation within neighborhoods and around individual homes; the effectiveness of their implementation depends on where and how they are applied, how well they are maintained, and whether they are coordinated alongside community and property-level action. Landscape treatments need to be part of an integrated approach to reduce risk along the whole path a fire may travel.
Coordination across scales should not mean applying the same intervention everywhere. A dense urban neighborhood faces different risks than a home at the edge of the wildland-urban interface. California’s diverse vegetation types create very different fire conditions across the state. Mitigation strategies must reflect those differences.
Shared data and science-informed standards should determine the right combination of home, community, and landscape action for each place. The SB 254 report advances the approach to have science-informed standards for directing resources where it reduces the most risk per dollar, and California should move quickly to put it into practice.
Implementation must also account for differences in local capacity. Standards or programs that assume local technical and administrative capacity will inevitably concentrate mitigation resources where that capacity already exists. The system must ensure that under-resourced communities are not left behind.
Mitigation funding in California is fragmented, competitive, and often tied to short budget and grant cycles typically ranging from 1-5 years. Local governments, organizations, and homeowners must navigate multiple programs, each with its own application process, while roles across the local, regional, and state levels remain unclear.
As a result, the current funding structure makes it difficult to build the capacity needed to deliver mitigation at scale. Local organizations cannot reliably plan beyond the next grant cycle, invest in developing a stable and skilled workforce, or establish efficient supply chains with associated cost efficiencies. They also cannot make the sustained investments needed to implement and maintain mitigation over time. Putting more money into the same system will not solve these problems on its own.
Predictable funding over a 10-year period, with clear coordination across planning, implementation, monitoring, and ongoing stewardship, would allow communities to scale their work and make each dollar go further.
The SB 254 report calls for stronger statewide coordination. This is important to get right, as effective mitigation touches the policies and expertise of many different parts of the State of California. Coordination and alignment between programs is important; however, that coordination should be designed carefully to avoid adding another layer of complexity or bureaucracy. In some cases, this may be better achieved by integrating programs under a clear co-management structure that includes relevant agencies. Existing pathways, like the California Joint Powers Authority, could be leveraged more to improve alignment. For example, the California Wildfire Mitigation Program was created through the Joint Powers Authority between the Office of Emergency Services (CAL OES) and CAL FIRE. Clearly defining the role of each state program involved in wildfire mitigation and resilience, assigning decision-making authority, and addressing gaps between these programs, will be important to coordinate funding effectively.
Once risk reduction is achieved within a community or landscape, ongoing stewardship is necessary to maintain vegetation and defensible space. Although the SB 254 report calls for durable, long-term funding for wildfire mitigation, it does not fully address how ongoing community and landscape stewardship should be financed after initial risk reduction is achieved. California should explore models that link community commitments to maintaining low risk conditions with durable funding sources, including local taxes or homeowner’s associated fees. This approach could strengthen community buy-in while helping communities capture a share of the long-term savings associated with reduced fire suppression, recover, and insurance costs.
Establishing a long-term statewide funding and financing strategy for community wildfire mitigation is among the SB 254 report strategies that we most want to see advanced. Funding should be durable enough that communities can plan against it, and it has to be fair, so communities least able to pay aren’t the ones left with the greatest risk.
We encourage the State to consider real innovations in funding that tie progress toward defined milestones to long-term funding commitments. Funding should also incorporate outcome-based incentives that reward measurable reductions in wildfire risk, rather than acres treated or completion of an activity checklist. This approach would encourage municipalities, contractors, and homeowners to take strategic action while giving local implementers flexibility to select the approaches best suited to local conditions. It would also reward verified reductions in community wildfire risk and make public investments more accountable to measurable results. Clear standards and guidance, along with technical support for planning, can help local communities draw the connection between mitigation actions and achieved risk reduction.
Science must remain central not only to targeting mitigation strategies, but also to evaluating and improving the effectiveness of funding and programs over time. California should fund ongoing monitoring to determine whether investments are reducing risk as intended and use those findings to adapt standards, priorities, and implementation approaches.
Mitigation costs are currently shared among individual property owners; local, state, and federal governments; utilities; and private companies. But California has no consistent framework for allocating those costs. Projects are instead negotiated and assembled one at a time based on available funding and political will, which makes long-term planning difficult.
That leaves the hardest question: who pays for wildfire mitigation?
The answer must involve sharing responsibility across public and private actors that benefit from reduced wildfire risk. California is already answering this question now by default. Today, the costs show up in homeowner insurance bills, electricity bills, taxes, disaster costs, and devastating losses borne by wildfire survivors.
We should be more deliberate in how these costs are shared and start by reducing risk before disaster strikes.
Expert contributors to this blog series include Katelyn Roedner Sutter, Talley Burley, Michael Colvin and Katie Roback from Environmental Defense Fund and Jeremy Sokulsky and Brynn O’Donnell from Environmental Incentives.
If you live in California, you’re already paying the cost of catastrophic wildfire three times: in your homeowner insurance bill, in your electricity bill and through your taxes. Survivors pay a fourth time through the damage and destruction of their home and community. Sadly, the bills will only keep climbing because the fires driving them keep getting worse.
I am working closely on this issue with my expert colleagues on wildfire, insurance, electricity and public policy. Together, we are examining the recent report Enhancing California’s Resiliency to Natural Catastrophes (the so-called “SB 254 report”). This is the first in a series of blog posts defining the wildfire-insurance-electricity challenge, assessing options presented in the SB 254 report, identifying tradeoffs, and making the case for urgent action.
Catastrophic wildfires have become a sobering reality of life in California. While fire is an essential part of the ecosystem in most of the state, catastrophic wildfires burn with greater severity than these ecosystems have evolved to withstand. These more extreme wildfires devastate human communities, destroy forests and other landscapes, threaten water supplies and produce poisonous smoke that is hard to escape. This new reality is driven by the convergence of climate-driven extreme weather, woody accumulation from the decades of suppression of ecologically necessary fire and housing development into wildlands.
The impacts and escalating costs from wildfires are creating dangerous failures in markets that are essential to daily life: insurance and electricity.
The growing magnitude of wildfire losses has destabilized the homeowners insurance market, causing insurers to stop offering coverage in high-risk areas, making insurance bills more expensive for everyone and leading to an increase in the number of homeowners reliant on the CA FAIR Plan — the state’s insurance market of last resort.
At the same time, catastrophic wildfires also impact our electric bills because utility equipment is a common cause of catastrophic fires. In California, state regulators order utilities to spend billions to reduce that risk, cover liability and recover from past events. Those wildfire-related costs add an average of $21 to $41 a month to residential electricity bills, in a state where the cost of living is already high. California needs an electric grid that is affordable, clean, safe and reliable — and the high costs of reducing wildfire risks make it harder to afford the clean energy transition California needs.
No single actor created this problem, and none can solve it alone: the state, utilities, insurers and communities each hold part of the answer. California needs long-term investments and short-term actions that do not simply move liability and costs around.
The only solution to addressing the wildfire crisis is to reduce the risk itself through significant, sustained investment in wildfire mitigation. Science-backed mitigation strategies that reduce losses will improve the lives of Californians while easing the pressures destabilizing the electricity and insurance sectors. These include land management strategies like fuel breaks and community strategies like home hardening. By targeting the highest risk areas, California can achieve the greatest risk reduction possible for the lowest shared cost. Policy that engages communities, utilities and the private sector can enable innovations and efficiencies that make limited dollars go further.
This work is substantial, but the costs of inaction are even greater. The 2025 Los Angeles wildfires alone are estimated to have caused up to $130 billion in losses. By comparison, the cost of fuel treatment in all high wildfire hazard areas in California is projected to cost $9.7 billion in total. These costs, along with home and community hardening, are a relatively small investment compared with the estimated $140 billion in capital losses, health costs, and indirect economic impacts caused by California’s wildfires in 2018 alone.
Mitigation not only reduces loss, it lowers fire suppression costs — which can be staggering. Nationally we are spending almost $3 billion every year on suppression, with CAL FIRE’s recent average over $800 million per year. One study focused on the Pacific Northwest found that every dollar invested in fuel treatments results in $5-6 less spent on firefighting expenditures. Across the Western U.S. as a whole, a dollar spent on fuel treatments saves about $3.75 in damages.
While California scales up long-term risk reduction, it also needs near-term measures to stabilize utilities, insurance and communities recovering from wildfire. California is unusual because investor-owned utilities can be held responsible for property damage caused by their equipment — even when they were not found to be negligent. Those utility payments help survivors rebuild and allow insurers to recover some of what they have paid out in claims. But wildfire liabilities have already pushed a major utility into bankruptcy, delayed survivor payments, raised borrowing costs and limited the utility’s ability to invest in grid safety, reliability and clean electricity.
Reform should make the utilities’ financial responsibility for wildfire more predictable and fairly shared across stakeholders without reducing the compensation survivors urgently need. California must also better connect utility, property and community mitigation to insurance pricing and coverage. This is important so that mitigation investments that measurably reduce risk actually improve insurability and increase insurance affordability. But these steps will provide only temporary relief unless they are paired with meaningful, sustained reductions in the underlying risk.
The SB 254 report (Becker, 2025) tasked the California Earthquake Authority with developing a comprehensive assessment to analyze and develop long-term reforms that could preserve access to insurance, strengthen wildfire and natural catastrophe mitigation while improving community safety and resilience. The resulting report offers a range of policy options for addressing California’s interconnected insurance, utility and wildfire challenges. Importantly, it recognizes that reducing wildfire risk will require a “whole-of-society” effort — from front doors to mountain tops.
We will always pay for wildfires. The choice is whether we pay for a more costly response and recovery, or for adequate risk reduction and resilience beforehand.
The following areas are critical to get right:
In upcoming pieces, we’ll dive deeper into these topic areas, reflect on the options in the SB 254 report, and explore policy changes needed to make California wildfire resilient, insurable, and affordable.
Expert contributors to this blog series include Jenna Knobloch, Talley Burley, Michael Colvin and Katie Roback from Environmental Defense Fund and Jeremy Sokulsky and Brynn O’Donnell from Environmental Incentives.
Electricity prices are rising across the U.S. Demand for electricity is going up for the first time in 20 years. And more extreme weather and heat waves are causing blackouts.
Yet instead of expanding access to low-cost, clean power, the Trump administration is making the problem worse. Since Day One, the administration and its allies in Congress have pushed policies that restrict the supply of affordable, homegrown clean energy – creating a self-inflicted rate hike just as the country needs more power.
The consequences are apparent: According to research from EDF and Atlas Public Policy, 21 gigawatts of clean power have been cancelled in that timeframe – or about 10 Hoover Dams’ worth of generating capacity.
Wind and solar offer some of the cheapest – and fastest – ways to provide electric power today. In contrast, the cost to build natural gas plants has soared in recent years and a shortage of turbines is delaying construction, while coal remains one of the most expensive and dirtiest ways to generate power. To put it simply: Blocking cheap, clean energy while doubling down on outdated fossil fuels makes no economic or environmental sense.
The attacks on clean energy are not only raising our electricity bills, but they are unleashing more pollution in our water and air, killing thousands of jobs and making our electric grid weaker. Here are major ways the Trump administration is obstructing clean energy – and how EDF and allies have been fighting back:
When Duke Energy Carolinas (DEC) initially submitted its 2025–2026 general rate case, customers faced the prospect of an 18% rate hike — a crushing burden at a time when North Carolina families are already struggling with high costs of living. As an intervenor in the proceeding before the North Carolina Utilities Commission (NCUC), Environmental Defense Fund stepped in with clear goals: stop the unfair shift of massive infrastructure costs onto working families, and accelerate the transition to a clean, resilient electric grid.
The comprehensive settlement reached between Duke Energy, the Public Staff, EDF and key partners represents a critical course correction. It cuts the amount Duke is allowed to earn on grid infrastructure investments, reduces the utility’s request for excessive revenue guarantees by more than half, and makes meaningful, targeted cuts to some of the utility’s proposed capital investments. Altogether, this agreement spares household electric customers a lot of unnecessary financial pain.
However, this settlement doesn’t solve all issues and isn’t yet final. In particular, the question of what happens to the state’s critical Customer Assistance Program for residents struggling to pay their power bills remains unresolved. A final Commission order on this and the pending Duke Energy Progress (DEP) rate cases will be issued this fall, which may or may not accept this settlement’s provisions.
While we expect other advocates, and leaders like Attorney General Jackson, will rightly continue to push for lower rate increases, the proposed settlement also includes a significant win in the fight over who pays for the infrastructure costs from soaring energy demand in North Carolina.
North Carolina is facing unprecedented electricity demand growth. Driven by an explosion of hyper-scale data centers, peak energy use across Duke’s Carolinas system is projected to surge over the coming decades, largely driven by “computational load.” Historically, when large commercial users enter a utility’s territory, the utility builds expensive new generation and transmission infrastructure, socializing those capital costs across all customer classes. Under Duke’s original proposal, ordinary residential customers were on track to continue subsidizing power-hungry tech giants.
EDF and clean energy allies challenged this dynamic directly. Through expert analysis, we demonstrated that large load expansion must not come at the expense of everyday consumers. In the hearing, commissioners agreed that, for example, the cost of building a new power line from a power plant to support a data center shouldn’t go on “grandma’s light bill.”
In response, we secured a vital concession from Duke Energy: supporting a separate, expedited regulatory proceeding dedicated to establishing a formal Large Load Tariff (LLT) before new rates go into effect.
A properly structured Large Load Tariff is essential for customer protection and, if done correctly, will provide relief to future residential power bills, remove risk for other customers, and potentially offer a pathway towards the financing and expedited deployment of new, affordable, clean energy solutions. By establishing rules such as minimum monthly billing requirements, multi-year power purchase commitments and exit fees, an LLT ensures that data center developers carry the full financial risk and cost of their grid connections.
A properly designed LLT enforces a simple principle: the data center energy giants must pay their fair share.
The proposed settlement agreement does not set the details of a LLT, which are key, but it does commit Duke and Public Staff (North Carolina’s professional ratepayer advocacy agency) —with input from stakeholders like EDF — to submit a special tariff covering large data centers by the end of September.
While establishing a Large Load Tariff prevents unfair cost-shifting, it only solves half the equation. If data centers satisfy their massive energy needs by expanding centralized fossil fuel generation, North Carolina’s climate progress and public health will suffer. The next frontier is ensuring that new large-scale demand is paired with dedicated, zero-carbon energy.
To achieve this, EDF is championing “Bring Your Own Clean” (BYOC) frameworks. Under a BYOC structure, large commercial operations are required to directly procure, co-locate or contract for their own clean energy, battery storage and demand-response resources. By pairing data center expansion with new clean energy capacity, incoming tech operations can meet their own power needs without driving up system-wide peak prices or adding new sources of climate- and health-harming air pollution to the grid.
The momentum for BYOC policies is rapidly building. Governor Josh Stein’s Energy Policy Task Force, established under Executive Order 23, highlighted this exact priority. The Task Force’s interim report called for BYOC options, load flexibility (when data centers temporarily reduce their power use from the grid), and grid-enhancing technologies to manage load growth from data centers responsibly.
Implementing BYOC framework in North Carolina will most likely require legislative action. To this end, EDF is actively collaborating with Task Force stakeholders, state regulators and industry leaders to translate these recommendations into concrete policy proposals. Looking ahead to the 2027 legislative session, our focus will be on codifying statutory protections that enable data center developers to bring their own clean energy.
Legislative action in 2027 will be vital to safeguard grid reliability, better protect customers’ wallets, and ensure that any future data center development in North Carolina powers all of us toward a clean, affordable energy future — rather than a retreat to outdated, expensive fossil fuels that further strains North Carolina families’ budgets and health.
