Key facts
- California lawmakers will vote on a bill to aid wildfire survivors.
- Governor Gavin Newsom's plan to limit utility liability for wildfires was not passed.
- The new bill aims to expedite payments to fire victims.
- The legislation includes a ban on hedge funds profiting from wildfire claims.
- Utility executives will be barred from bonuses if their equipment causes a large wildfire.
- Pacific Gas & Electric criticized the bill for not offering long-term solutions.
California lawmakers are expected to vote on legislation designed to assist wildfire survivors, following the rejection of a more comprehensive proposal by Governor Gavin Newsom. Newsom's plan, which sought to reduce the financial liability of electric companies for fires caused by their equipment, failed to gain sufficient support in the Legislature.
Newsom acknowledged that the compromise bill offers some advantages for wildfire victims, including faster compensation, but expressed disappointment that it does not enact the sweeping reforms needed to address the core issue of cost allocation for utility-sparked fires. He noted that walking away from the issue entirely would have been a disservice to the state's residents.
The governor's inability to secure legislative backing for his full proposal represents a notable setback, particularly as he approaches the end of his term in January. Fire survivors had strongly opposed Newsom's plan, protesting that it prioritized utility interests over victim needs. Insurance companies also voiced concerns, warning that shifting more of the damage costs to them would likely lead to increased policyholder rates.
Joy Chen, executive director of the Every Fire Survivor’s Network, stated that the compromise deal was a victory for survivors, emphasizing that their voices were heard by lawmakers. The governor's original proposal aimed to stabilize California's high electricity rates by shielding utilities from the full financial burden of wildfires, which have become more frequent and intense due to climate change. California law holds utilities responsible for damages from fires ignited by their equipment, regardless of negligence.
The question of responsibility for utility-sparked fires has been a persistent challenge throughout Newsom's governorship. He previously signed legislation in 2019 establishing a $21 billion fund, financed by shareholders and ratepayers, to help utilities manage wildfire damages, and an additional $18 billion was agreed upon last year. Newsom's latest initiative came as Southern California Edison faces significant claims from a major 2025 wildfire.
The bill scheduled for a vote introduces a program to expedite payments to fire victims, prohibits hedge funds from profiting from wildfire claims, and prevents utility executives from receiving bonuses if their company's equipment is responsible for a fire that damages over 500 buildings. The California Catastrophe Response Council would appoint an administrator to oversee a faster claims resolution process.
The American Property Casualty Insurance Association supported the deal, asserting it protects Californians and maintains the affordability and availability of insurance by keeping costs with responsible parties and aiding the stabilization of the state's insurance market.
However, Pacific Gas & Electric expressed dissatisfaction, arguing the bill would not stabilize rates and lacked durable, long-term solutions for victim compensation, wildfire fund sustainability, or utility financial risk management. Assemblymember Rick Zbur described the failure to reach broader reforms as a "disaster," indicating that the current approach only addresses superficial issues. Katelyn Roedner Sutter of the Environmental Defense Fund echoed this sentiment, stating the bill was merely "fine" and did not sufficiently reduce fire risk or stabilize rates.