California Assembly Blocks Sensible Wildfire Liability Reform, Caving to Political Pressure
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The California Assembly failed to vote on a wildfire liability bill, stalling much-needed reforms as Governor Newsom pushes for more government control, while utilities face mounting regulatory threats.
California's Assembly has once again delayed a vote on a wildfire liability bill that was the product of negotiations with Governor Gavin Newsom and legislative leaders. Assembly Speaker Robert Rivas claimed the proposal 'does not yet deliver the relief, accountability or meaningful reform that Californians deserve,' reflecting the Assembly’s unwillingness to move forward with practical solutions.
Governor Newsom, speaking at the Capitol, dismissed the bill as insufficient, demanding 'comprehensive structural reform.' His calls for more government intervention to 'protect the state from catastrophic fires, support survivors, hold utility executives accountable and ensure reliable, affordable power' signal a push for even more regulation and bureaucracy. Newsom argued that the bill 'did not address the underlying structural problems driving this crisis,' insisting on broader, more intrusive measures.
The decision came after heavy lobbying from the state’s two largest investor-owned utilities, PG&E and Southern California Edison, whose stocks rose after the announcement—a sign that investors see hope for rational policy. Both companies have been unfairly scapegoated for recent major fires, including the 2018 Camp Fire and the 2023 Eaton Fire, despite complex contributing factors. The legislation, which would have capped attorney fees and executive bonuses tied to wildfire incidents but left subrogation unchanged, required a two-thirds majority in both legislative chambers—a high bar that protects against hasty lawmaking.
Newsom indicated he may call a special session to push for even more aggressive measures targeting utilities, warning that the state’s wildfire liability fund could be depleted by ongoing claims. He stated that the issue 'is not going away' and pointed to the market reaction as evidence of the stakes for investors, ratepayers, and California’s economy, which could be jeopardized by overregulation and punitive policies.