I can see a derelict grid and wildfires increasing power outages but how does it increase the cost of electricity itself?

Those costs include grid fees?

Grid fees pay for damage caused by wildfires.

That's all? California has the economic might to not have that problem.

I'm not sure excatly what you mean by "that problem," but economic might means having the ability to maintain massive infrastructure in sparsely populated, difficult terrain. It means paying massive amounts of money to inspect, clear brush, and replace 100 year old equipment piecemeal.

Additionally, that economic might means that we have very high labor costs, and the ways of fixing things that are cheapest may be different for California than other parts of the country. But the utility is incentivized to spend as much as possible on these efforts (they take a fixed percentage of costs as profit), and the regulators have no clue what's going on. So proposing a method that's the cheapest elsewhere will get a rubber stamp.