(Photo by lightasafeather via Getty Images)
NV Energy is asking the Public Utilities Commission of Nevada to allow it to establish a $500 million self-insurance fund in order to have adequate liability insurance in the event of a catastrophic wildfire alleged to “have been caused or exacerbated by utility equipment.” The fund would bring the utility’s coverage to close to $1 billion.
The self-insurance policy would be funded by customers, based on their electricity usage.
The average Southern Nevada customer would pay an extra $.50 per month, while customers in Northern Nevada, where wildfires pose a greater risk, would see their monthly bill increase by about $2.40. Customers in the north would finance about three-quarters of the cost, with Southern Nevadans paying about a quarter.
Shareholders would commit to a 10% co-insurance payment for the amounts funded – up to $50 million for the $500 million policy, but only if the fund is depleted by claims.
During the last century, three wildfires in the U.S. were classified as super-catastrophic, meaning they resulted in more than $250 million in economic damage, NV Energy’s application says. Since 2001, the number of super-catastrophic events has increased to 26. At least 19 caused damage of more than $1 billion.