In Sacramento, Governor Gavin Newsom is pressing the state legislature to adopt a new package that would limit how much electric and gas utilities must pay victims of wildfires sparked by their equipment. The proposal comes as the $21 billion wildfire fund, created in 2019 and financed by utility shareholders and ratepayers, is expected to run out soon.
Background on the fund
The fund was established after the 2018 Camp Fire – the deadliest blaze in California history – which killed 85 people and destroyed more than 18,000 structures. Investigators traced the fire to Pacific Gas & Electric (PG&E) equipment. Facing tens of billions in potential liability, PG&E filed for bankruptcy weeks after Newsom took office. In response, Newsom signed legislation that required utilities to contribute to a dedicated fund, provided they adopt certain safety measures.
New proposal details
Newsom’s latest plan would further protect utilities by capping the amount they must pay victims and their attorneys. It also seeks to shift more of the cost of property damage onto insurance companies, which currently can seek reimbursement from utilities after paying policyholders. The governor says the change would speed up payments to survivors and help keep electricity rates – already among the nation’s highest – from climbing further.
Key provisions include:
- Limiting utility liability for wildfire damages, with a greater share of costs borne by insurers.
- Requiring utility CEOs to forfeit bonuses if a fire caused by their company results in more than $1 billion in damage.
- Allowing fines of up to $10 million for utility shareholders who violate wildfire‑prevention requirements.
Reactions from stakeholders
Utility companies – PG&E, Southern California Edison, and San Diego Gas & Electric – have formed a coalition urging lawmakers to pass the plan, arguing it will stabilize rates and preserve the fund for future emergencies.
Insurance industry representatives warn the shift could raise premiums. Rex Frazier, president of the Personal Insurance Federation of California, said, “Being responsible for your actions is something that parents tell children. Hopefully the Legislature will tell this to the utilities.”
Fire‑survivor advocates are skeptical. Joy Chen, executive director of Every Fire Survivor’s Network, called the proposal “a massive transfer of liability for the three for‑profit utility monopolies that have continued to burn down communities across California.” Survivors fear reduced payouts and a slower path to compensation.
Legislative timeline
The state legislature has until August 31 to act. If no agreement is reached, Newsom could reconvene a special session. Democratic leaders have expressed a need to address the issue but have not detailed what a final deal might contain.
Broader context
California law already requires utilities to pay wildfire damages regardless of negligence, based on the principle that they provide a public service. However, climate change has intensified fire frequency and severity, prompting calls to rethink how costs are allocated. Economist Meredith Fowlie of UC Berkeley noted that while utilities can start fires, “they don’t by themselves create catastrophe.” Other factors such as vegetation management and home hardening also play critical roles.
Newsom, who is considering a 2028 presidential run, framed the effort as a responsibility to future governors: “I’m not going to walk away and hand a real mess to the next governor.” The outcome of this legislative battle could shape his legacy on one of California’s most persistent public‑policy challenges.
Original reporting: Alexandria, VA News – WTOP News — read the source article.
