California wildfire liability bill dies in Assembly without a vote

By Richard Ramos

California lawmakers killed a scaled-back wildfire liability bill Monday, allowing the measure to die in the Assembly without a vote as the legislative session came to a close.

The development comes just days after lawmakers reached a compromise on the legislation, which was designed in part to speed payments to wildfire survivors while addressing some of the financial risks facing California’s investor-owned utilities.

The latest proposal, Senate Bill 492, never received a final Assembly vote before the legislative deadline.

Assemblymember Pilar Schiavo said the abbreviated timeline made it difficult to reach a meaningful agreement on such a complex issue.

“Unfortunately, in such an expedited timeframe, it’s very difficult to land something like this,” Schiavo said.

The legislation centered on a contentious question: how much financial responsibility should utility companies face when their equipment causes a catastrophic wildfire?

Gov. Gavin Newsom had pushed for broader changes that would have shielded utilities from some of the costs associated with fires sparked by their equipment.

Newsom argued those protections were necessary because another catastrophic wildfire could put utilities under enormous financial pressure, potentially threatening their financial stability and the state’s power grid.

Utility leaders have also warned lawmakers that without additional protections, Californians could face higher electricity bills and utilities could have a harder time attracting the investment needed to build a safer and more resilient power grid.

But Newsom’s original proposal faced opposition from wildfire survivors, consumer advocates, insurers and lawmakers who argued it could shift more costs onto people who lost their homes and businesses.

A compromise was reached over the weekend, but the proposal ultimately failed to advance before the Legislature adjourned.

One of the key provisions of the compromise was the creation of a “Fast Pay” program intended to get money to wildfire survivors more quickly.

But wildfire survivor advocates said the proposal would have come at too high a cost, arguing it could undermine victims’ ability to pursue full compensation.

Will Abrams, a wildfire survivor and organizing advocate with the Utility Wildfire Survivor Coalition, said survivors support getting financial assistance quickly but not if it means giving up legal rights.

“This Fast Pay was smoke and mirrors. And what was behind the smoke and mirrors was an erosion of victim rights,” Abrams said.

Abrams said the legislation did not put wildfire survivors first, despite lawmakers’ stated intentions.

“I think everybody who is in the room, in these hearing rooms and at the Legislature talks about putting wildfire survivors first. But this legislation certainly did not do that,” Abrams said.

The compromise had already represented a significant change from the proposal Newsom was pushing the previous week.

His administration had sought to reduce utilities’ exposure to wildfire claims, including by limiting or ending insurers’ ability to sue utilities to recover money they paid to policyholders after fires.

The latest version of SB 492 did not include the proposed limits on insurers’ ability to pursue utilities for wildfire losses. It also preserved survivors’ ability to pursue lawsuits and did not impose the proposed cap on damages that had been part of Newsom’s broader plan.

The bill also would have restricted the ability to sell or transfer wildfire claims to third parties, including private-equity firms.

It also addressed utility executive compensation, prohibiting certain bonuses for utility CEOs and senior executives when their company is responsible for a wildfire that damages or destroys at least 500 structures.

Newsom has raised concerns that claims stemming from the Eaton Fire, which state officials have attributed to Southern California Edison equipment, could put significant pressure on the state’s $18 billion Wildfire Fund, potentially leaving fewer resources available for future disasters.

Newsom acknowledged the compromise Saturday, calling it progress while making clear he did not believe it went far enough.

“We reached a compromise that blocks hedge funds from profiteering off wildfire survivors, bars utility executives from taking bonuses when their company ignites a fire, and gets money into survivors’ hands faster,” Newsom said in a statement released by his office.

But the governor also said California still needs broader changes to the system, particularly to strengthen the long-term stability of the state’s Wildfire Fund and address electricity rates.

“This system needs full structural reform — not a partial one,” Newsom said.

Now that the legislation has died, Newsom is signaling that the broader issue remains unresolved.

The governor has called for lawmakers to address the “entire” problem rather than settling for a partial solution, potentially setting the stage for another legislative effort, including the possibility of a special session focused on wildfire liability.

Wildfire survivor advocates say they would support bringing lawmakers, utilities and other stakeholders back to the table for longer-term discussions.

They argue the failure of SB 492 could provide an opportunity to develop a more comprehensive plan that protects wildfire victims’ rights while addressing the financial risks facing California’s utilities.

Meanwhile, utility advocates continue to argue that lawmakers need to address the financial risks facing companies such as Southern California Edison and PG&E.

The utilities have warned that without changes to the current system, the cost of capital needed to invest in grid safety could increase, potentially putting additional pressure on electricity rates.