Vote scheduled on scaled-back wildfire liability package
California lawmakers are set to vote Tuesday during a special session on a scaled-back wildfire liability package, after Gov. Gavin Newsom's push to shield utilities from some costs associated with fires sparked by their equipment failed to gain enough support, CBS News reports.
The latest proposal, Senate Bill 492, focuses largely on speeding up payments to wildfire survivors and limiting some practices surrounding wildfire claims, while leaving in place insurers' ability to pursue utilities for losses tied to fires. The measure is expected to come before lawmakers for a final vote Tuesday morning, after the Legislature's scheduled end-of-session deadline Monday. Because SB 492 includes an urgency clause, lawmakers can vote on it after the regular session concludes.
Newsom's original proposal and its fate
The developments mark a significant change from the proposal Newsom was pushing last week. His administration 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 governor argued the changes were necessary to protect the state's utilities from potentially crippling liabilities and help stabilize electricity rates.
But the proposal faced fierce opposition from wildfire survivors, consumer advocates, insurers and lawmakers who argued it could shift more costs onto people who lost their homes and businesses.
That provision is not included in the latest version of SB 492, according to CBS News. The bill instead preserves survivors' ability to pursue lawsuits and does not impose the proposed cap on damages that had been part of Newsom's broader plan.
Key provisions of SB 492
One of the biggest changes would be the creation of a 'Fast Pay' program intended to get money to wildfire survivors more quickly. The measure also would restrict the ability to sell or transfer wildfire claims to third parties, including private-equity firms, CBS News reports.
It also addresses 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.
Reactions from officials
Newsom acknowledged the compromise on Saturday, calling it progress while saying it does not go 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," he said, as quoted by CBS News and Politico Europe.
The governor said California still needs broader changes, particularly to strengthen the Wildfire Fund and address electricity rates. "This system needs full structural reform — not a partial one," he said.
Insurance Commissioner Ricardo Lara said SB 492 advances efforts to improve wildfire preparedness, accountability, insurance availability and community resilience. "This year's compromise reflects the complexity of the challenges before us. It advances important efforts..." he said in a statement.
Assembly decision puts vote in doubt
Despite the scheduled vote, the Assembly decision not to vote on the compromise bill placed it at odds with the Senate, according to Politico Europe. Senate President Pro Tempore Monique Limón said during a Tuesday press conference: "For our house, the votes and the members were there, so there certainly is a sense of disappointment."
State Sen. Sasha Renée Perez, a Democrat who represents Altadena, expressed dismay: "I think we're really surprised to see the outcome today."
Newsom said he had sought the changes in part to prevent a major wildfire from bankrupting another utility or draining a multibillion-dollar fund, calling the status quo "untenable."
Market reaction and criticism
Newsom warned that the compromise bill caused Pacific Gas & Electric and Southern California Edison stocks to tumble, blaming "outside groups" including "Big Insurance," hedge funds and trial attorneys. Edison International dropped 23 percent and PG&E fell 20 percent, according to Politico Europe.
The CEOs of PG&E and Edison International sent a joint letter saying the bill "fails to provide a durable, long-term solution for compensating wildfire victims, sustaining the Wildfire Fund, and managing the financial risk."
Lobbyist Scott Wetch said: "We'd be better off not passing this bill and sending the signal that we understand that it doesn't get us there."
Joy Chen, executive director of Every Fire Survivor's Network, said: "If Wall Street does not trust Edison and PG&E to stop causing catastrophic fires, California should not solve that problem with another bailout."
Assembly Speaker Robert Rivas said Tuesday that Newsom did not ask him to hold off on the vote, and that Wall Street's reaction did not influence his decision to cancel the vote. "If the governor chooses to call a special session, we're ready to stand up and serve," Rivas said.
Assemblymember Chris Rogers said in an interview that the caucus "was united in people feeling like you could pass this bill."