By Tony Saavedra, ORANGE COUNTY REGISTER
After months of negotiations and a last-minute compromise, a once-vaunted wildfire liability plan was killed in the Assembly on Tuesday, with leaders citing its inability to meaningfully address needed state reforms in the wake of disastrous blazes.
Assembly Speaker Robert Rivas said in a statement that efforts to determine who pays for massive wildfires initiated after the Eaton and Pacific Palisades fires would be handled down the road, but that Senate Bill 492, introduced by state Sen. Josh Becker and Orange County Assemblymember Cottie Petrie-Norris, was effectively dead.
“We will continue to tackle the difficult but critically important issue of wildfire reform. Sacramento
shouldn’t settle when wildfire survivors lost everything,” Rivas, D-Hollister, announced on his website. “Over the past several weeks, we have spent hundreds of hours at the table with Californians from every side of this fight, and the verdict is clear: The proposal before us does not yet deliver the relief, accountability or meaningful reform that Californians deserve.”
That proposal which Gov. Gavin Newsom backed over the weekend would have had some benefits for future wildfire victims, and was touted as a win just a few days ago by survivors of the Eaton fire.
The catastrophic blaze in Altadena killed 19 people in January 2025. Los Angeles County fire investigators found that one of Southern California Edison’s transmission towers sparked the inferno.
Under the proposal, a “fast-pay” program for fire survivors would draw from the California Wildfire Fund established in 2019 to keep privately owned power companies from going bankrupt from fire damages. The fund was created with $21 billion, with lawmakers recently adding another $18 billion, all paid for by shareholders and customers.
But even Newsom said it did not go far enough. Critics lamented the deal’s failure to grapple with the long-overarching question of who bears the burden of the cost of fires ignited by utility equipment.
A vote on the plan was required by the end of the legislative session on Tuesday and will now await a new session, possibly after Newsom is termed out of office.
The bill’s death came a day after California’s three investor-owned power companies wrote letters to legislative leaders decrying a compromise measure, which they said would lead to higher energy rates. The companies had lost more than $20 billion in value between the end of trading Thursday and Monday morning, after the deal was announced over the weekend.
Shares of Rosemead- based Edison International and PG&E rebounded Tuesday after news broke that lawmakers had shelved the proposed legislation. Edison stock gained 7.3% after a dramatic crash of more than 20% Monday.
Before the compromise, Newsom’s plan would have reduced the amount utilities had to pay some victims and barred insurance companies from suing electrical companies to get reimbursed for damages paid out to homeowners.
Fire victims intensely rallied against that plan. There were heavy caravans to Sacramento, where they demonstrated against it. A postcard campaign rooted in the Eaton fire burn zone railed against potential “backroom deals.”
Their bottom line was that Newsom’s plan would have given preference to utilities over victims.
But in a statement Tuesday, Newsom pointed to the market reaction as evidence utilities cannot face more liability pressure, and called again for full structural reform.
“If we are to maintain our status as one of the world’s great economies, California cannot settle for half measures,” Newsom said. “The reforms in this bill, while important, did not address the underlying structural problems driving this crisis, as the initial market reaction this week demonstrates. Simply put, this measure did not meet the gravity of this moment. The only solution is to return to fix the entire problem, not part of it.”
Newsom had eyed this legislative battle as a crucial piece of his California legacy as he ends his eight years in office. He brokered the failed compromise among the three utility companies, wildfire survivors who labeled Newsom’s original plan as a bailout to big power companies and insurance companies afraid they would have to pay more for damages.
Said Newsom: “The chaos we have seen was clearly laid out in the SB 254 report, which said: ‘Failure to act, or a conscious decision not to act … will have large near-term and severe long-term adverse consequences for Californians.’ That is why we have been working for two years to enact comprehensive reform.”
Edison, the parent company of SCE, and Pacific Gas & Electric, were specifically concerned that the compromise deal would still allow insurance companies to sue the utilities to recoup claims paid to fire survivors.
SCE spokesman Scott Johnson said Tuesday the bill needed much work.
“Meaningful policy remains urgently needed to put wildfire survivors first and deliver a durable, comprehensive solution,” Johnson said. “We will continue to work with policymakers to advance solutions that support wildfire recovery, reduce wildfire risk and help maintain safe, reliable, affordable energy.”
The compromise agreement was hailed as a “win” for future wildfire survivors, mostly for what was left out of the bill, such as limits on what survivors could collect on noneconomic damages such as pain and suffering.
On Tuesday, some survivors cast the agreement’s death as the inability of the utilities to follow the compromise brokered over the weekend.
“Wildfire survivors fought the utility bailout and won,” read a joint statement from the Every Fire Survivors Network and Consumer Watchdog. “Legislators heard us, stood up to enormous pressure from the Governor and the utilities, and rejected the biggest bailout protections they demanded.
“SB 492 was a negotiated leadership compromise. Now it is dead because the utilities wanted even more. They would rather kill the bill than accept a compromise that rejected the bailout they sought.”
Joy Chen, of Every Fire Survivors Network, said the Assembly shelving SB 492 sets the stage for the governor “to call a special session to revive the utility bailout he wants.”
When asked explicitly whether Newsom would call a special session which would convene legislators back to Sacramento to tackle just this issue Tara Gallegos, a spokesperson for the governor, simply said: “Stay tuned.”
Newsom calling a special session to reintroduce his proposal may not be welcome news to many legislators, especially those running for reelection and eager to return to their constituents and campaigns.
On the line too are many pieces of legislation on Newsom’s desk that he can sign or veto until Sept. 30.
“What we would ask, if he calls a special session is, he should wait until the bill-signing period,” Chen said, to avoid the appearance of the governor holding his signature over lawmakers hoping to get other laws passed.
Whatever happens, “we’ve shown that legislators will stand with survivors,” Chen said. “I would be surprised if he comes back on victim’s rights attacks.”
Chen, whose grassroots group organized rallies and Sacramento lobbying trips with consumer groups and civil rights nonprofits, said “EFSN will continue partnering with legislators to fend off any further utility bailouts and to protect survivors.”
Staff writer Ryan Carter contributed to this report.
