Newsom and Sacramento Politicians Push Hasty Wildfire Deal, Burdening Taxpayers and Undermining Utilities
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Governor Gavin Newsom and California lawmakers have rushed through a last-minute agreement on wildfire liability reforms, prioritizing political optics over sound policy. The deal, which weakens protections for utilities and fails to address root causes of wildfires, threatens to increase costs for ratepayers and exposes taxpayers to greater risk, while caving to trial lawyers and activist groups.
California Governor Gavin Newsom and Democratic leaders in the legislature have announced a last-minute deal on wildfire liability, once again prioritizing political expediency over responsible governance. Crafted behind closed doors, this agreement tinkers with liability rules in a way that threatens to further burden utilities and, by extension, California taxpayers and ratepayers. The deal bans hedge funds from extracting settlements from utilities after wildfires and blocks utility executives from receiving bonuses when their equipment is involved in fires—measures that may sound good in headlines but do little to address the real causes of California’s wildfire crisis.
State Senator Josh Becker, the bill’s author, touted the legislation as "one of the most consequential pieces of legislation for victims and survivors of wildfires that we’ve ever done," but in reality, the bill is another example of Sacramento politicians bowing to pressure from trial lawyers and activist groups. Senate Bill 492 creates a program to accelerate claim payments for wildfire victims but fails to fully protect utilities from costly litigation. Instead of blocking insurers from suing utilities, the deal merely restricts them from selling subrogation rights to private-equity firms—a half-measure that does little to curb the legal feeding frenzy that drives up costs for everyone.
Newsom called the reforms "real progress for future fire survivors," but even he admitted this is only a partial step. The urgency clause allows the bill to be rammed through with a two-thirds vote in both chambers, giving the public little time to review the consequences. Under current law, utilities like PG&E and Southern California Edison are held liable for fire damage even without negligence—a deeply flawed policy that led to PG&E’s 2019 bankruptcy and continues to drive up costs for ratepayers, who now pay an extra $41 per month on PG&E bills and $27 on SoCal Edison bills.
UC Berkeley Energy Institute’s Meredith Fowlie noted that the reforms do not eliminate fire risk for residents near power lines, but the real issue remains unaddressed: the state’s failure to invest in proper forest management and infrastructure hardening. Meanwhile, California’s insurance market is collapsing, with carriers fleeing high-risk areas and leaving residents dependent on the state’s FAIR Plan. Instead of real reform, Sacramento politicians are content to shift liability around, exposing taxpayers and survivors to even greater financial risk.
Survivor groups and trial attorneys, emboldened by the political climate, have pushed for more aggressive action, with Every Fire Survivor’s Network executive director Joy Chen boasting about their influence. The deal also imposes a 30-day pause on lawyer contacts and caps attorney fees at 10 percent, but these measures are unlikely to stem the tide of litigation. Former insurance commissioner Dave Jones warned that shifting more liability to insurers could increase costs for survivors and taxpayers, while Republican leader-elect Senator Roger Niello rightly questioned whether the rushed process allows for meaningful public input or sound financial solutions.
The legislation will be voted on before the session ends Monday, capping off Newsom’s term with yet another example of Sacramento’s failure to deliver real solutions as California heads into another dangerous wildfire season.