The California Public Utilities Commission (CPUC) on Monday proposed a $45 million shareholder-funded penalty against Pacific Gas and Electric Company (PG&E) for its connections to the destructive 2021 Dixie wildfire.

California's second-largest wildfire, ignited after a tree fell on the state's main utility's electrical distribution wires in July 2021, burned more than 963,000 acres in multiple counties.

The proposed penalty, pending CPUC Commissioner's approval, consists of a $2.5 million fine to the California General Fund, $2.5 million payment to tribes impacted by the fire for remediation, and $40 million for capital expenditures to transition records to electronic format.

CPUC enforcement staff is recommending this penalty under an Administrative Consent Order (ACO) and Agreement, as per a release on the state regulator's website.

The proposed settlement will be on the CPUC's voting meeting agenda on Nov. 16.

PG&E was not available for comment outside regular business hours.

(Reporting by Anjana Anil and Swati Verma in Bengaluru; editing by Miral Fahmy)