Utilities are natural monopolies.
Not exactly the best fit for a market solution, especially when, as in this case, they are negative externalities borne by the public that the company is trying to avoid paying for.
The company will pay for nothing. Its a powerco not a mint. Their only significant revenue stream is electric bills (pole rental for telco fiber optics, pole rental for cable TV cables, all small amounts of money)
What we have here is a decision between one group of accountants getting electricity users to pay, vs a different group of accountants getting taxpayers to pay. The fraction of the population that are net positive taxpayers is much smaller than the fraction of the population that uses electricity, so in a democracy it would be surprising NOT to see the people deciding the few people who are net positive taxpayers will get the bill. The large chunk of the population that pay electric bills while being net negative taxpayers are not going to volunteer to pay more.
A counterpoint might be that binding private enterprise by strict liability rules might coerce it to be extra cautious not to cut corners that lead to fires -- as opposed to a state owned company which might have less to fear from lax practices.
Although, it's debatable how avoidable starting fires is in the bone-dry tinderbox of 21st-century California, even if you stick closely to best practices.
What you describe is exactly what PG&E is today. Those strict liability rules did not prevent them from cutting corners. They estimate damages at 15B and their insurance and assets are worth $5B. So do the math.... taxpayers will have to pay for rebuilding and if PG&E survives will they pass costs on to rate payers (aka the same people whose houses burnt down) or will they tax PG&E more or ?. Maybe PG&E will become insurance company owned since they will owe the insurers tons of money since they can't pay out for liability.
What we have here is a decision between one group of accountants getting electricity users to pay, vs a different group of accountants getting taxpayers to pay. The fraction of the population that are net positive taxpayers is much smaller than the fraction of the population that uses electricity, so in a democracy it would be surprising NOT to see the people deciding the few people who are net positive taxpayers will get the bill. The large chunk of the population that pay electric bills while being net negative taxpayers are not going to volunteer to pay more.