A legislative deal aimed at reforming California's wildfire liability system collapsed in the State Assembly due to opposition from insurance companies, wildfire victims, local governments, and trial attorneys. Governor Gavin Newsom expressed disappointment but indicated readiness to continue negotiations.
The failure of this legislative deal leaves California's complex wildfire liability system unresolved, potentially impacting the financial stability of utility companies and the compensation available to wildfire victims.
A legislative deal intended to overhaul California's wildfire liability system collapsed in the State Assembly on Monday, facing significant opposition from key stakeholders. The proposed agreement, which aimed to reduce the financial exposure of power companies for fires sparked by their equipment, did not garner enough support to pass.
Governor Gavin Newsom had championed elements of the deal, including measures to prevent hedge funds from profiting from wildfires, to stop utility CEOs from receiving bonuses after their companies ignite blazes, and to expedite payments to wildfire victims. However, the final version of the deal was criticized for not including the most transformative aspects of Newsom's initial proposal, which could have saved power companies billions of dollars.
Opposition came from insurance companies, wildfire victims, local governments, and trial attorneys, who were concerned about limitations on their compensation from power companies. Newsom attributed the deal's failure to these "outside groups," including "Big Insurance" and hedge funds, and warned that the news had already caused the stocks of Pacific Gas & Electric and Southern California Edison to decline.
Assembly Speaker Rivas indicated that Governor Newsom had not requested a delay in the vote. Members of the Assembly Democratic caucus, initially prepared to vote for the compromise, convened a meeting where many expressed a preference for continued work on the issue over a longer timeline and in a more comprehensive manner, leading to the collapse of the deal.