Gov. Gavin Newsom on Saturday backed off his proposal to reduce costs for electrical utilities after their equipment sparks wildfires, agreeing instead to a narrower deal after homeowners, insurers and fire survivors argued his original plan would have shifted those costs onto them.
Instead, Newsom and Senate and Assembly leaders agreed on a narrower package of wildfire policies, including prohibiting private equity groups from investing in wildfire claims and denying utility CEO bonuses in the years their companies cause fatal fires.
Click Here to Subscribe to the California Political Review
The deal is a victory for lawmakers who refused to reduce damages to victims and shift costs away from utilities. Opponents included insurance companies, consumer advocates and survivors of the January 2025 Eaton Fire caused by Southern California Edison equipment that killed 19 people in Altadena.
Under the agreement announced Saturday, the state would create a “fast-pay” program for survivors’ property loss, pain and suffering in the wake of a utility-caused fire. It would include deadlines for determining which claims are valid within 60 days of receipt, and settlement offers within 30 days after that, but survivors could still pursue the long process of suing utilities if they choose.
The state also commits to improving its local wildfire mitigation efforts and sharing more data on insurance coverage in areas with fire risk.
The final agreement, which lawmakers will vote on next week in Senate Bill 492, caps a contentious series of closed-door negotiations between Newsom’s office and legislative leaders on how much utility companies should pay after fires.
Newsom wanted utilities to have to pay less to insurance companies, some wildfire survivors, local governments and corporations claiming damages after a fire. His administration is concerned the mounting costs threaten investor confidence in the state’s three major for-profit utilities: Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric. He said that could lead to higher borrowing costs for the companies and higher electricity bills for Californians.
Newsom also argued his plan would prioritize paying survivors who lose their homes. In past fires, investors have funded lawsuits or claims have been sold to hedge funds, increasing the number of third parties seeking to profit from wildfire payouts, Newsom’s office has said.
