California Assembly stalls wildfire liability reform amid utility opposition

California's Assembly postponed a vote on a wildfire liability bill that had been negotiated with Governor Gavin Newsom and legislative leaders. Assembly Speaker Robert Rivas said the proposal "does not yet deliver the relief, accountability or meaningful reform that Californians deserve."

Newsom, speaking at the Capitol, said California cannot accept "half measures" and called for "comprehensive structural reform" to protect the state from catastrophic fires, support survivors, hold utility executives accountable and ensure reliable, affordable power. He added that the bill "did not address the underlying structural problems driving this crisis" and that a broader solution is needed.

The decision came after intense lobbying from the two largest investor-owned utilities, PG&E and Southern California Edison, whose stocks rose following the announcement. Both companies have been linked to recent major fires, including the 2018 Camp Fire and the 2023 Eaton Fire. The legislation, which would have limited attorney fees and executive bonuses tied to wildfire incidents but left subrogation unchanged, required a two-thirds majority in both legislative chambers.

Newsom indicated he may call a special session to address how utilities should bear costs when they cause future fires, noting that the state's wildfire liability fund could be depleted by ongoing claims. He warned that the issue "is not going away" and that the market reaction underscores the stakes for investors, ratepayers and the state's economy.