By Rob Nikolewski, MERCURY NEWS
A hectic legislative session ended Tuesday with lawmakers in Sacramento withdrawing a last-minute and controversial wildfire liability bill.
Stitched together as part of the much-criticized “gut and amend” process that often occurs at the tail-end of lawmaking sessions, Senate Bill 492 was supposed to come to a vote before the Senate and the Assembly on Tuesday — the last and extra day of this year’s session.
The crux of the bill centers on who pays when wildfires sparked by equipment owned by the state’s big three investor-owned utilities — San Diego Gas & Electric, Pacific Gas & Electric and Southern California Edison — cause massive damage to homes and property.
SB 492 was introduced last Saturday, after weeks of closed-door negotiations between Gov. Gavin Newsom and legislative leaders.
But after Democrats caucused for more than an hour Tuesday, Assembly Speaker Robert Rivas, D-Hollister, and Sen. Josh Becker, D-Menlo Park, told lawmakers in their respective chambers that no votes would be cast.
“The verdict was clear that the proposal before us from our governor, it did not deliver the support, the accountability or the meaningful reform that wildfire victims deserve and that Californians deserve,” Rivas said.
“While I’m disappointed we cannot deliver these reforms today, we will not stop working on behalf of survivors” of wildfires, Becker said on the Senate floor.
Newsom, in a statement, said the bill had productive elements but did not address underlying problems needed to effectively deal with the issue.
“If we are to maintain our status as one of the world’s great economies, California cannot settle for half measures,” Newsom said. “We need comprehensive structural reform to protect the state from catastrophic fires, prioritize wildfire survivors, hold utility executives accountable, and provide reliable, affordable power to all Californians.”
Newsom’s press office did not respond to a question from the Union-Tribune about whether the outgoing governor will call the Legislature back for a special session later this year to tackle the issue. Leadership in the Assembly vowed to hold hearings on the issue this fall.
The bill’s sudden death came just one day after CEOs of Edison and PG&E sent a joint letter to legislative leaders, asserting that SB 492 “worsens affordability for utility customers and challenges the state’s clean energy goals.”
Saying California utilities “must attract tens of billions of dollars in private investment each year,” the letter referenced “the financial consequences” of how the market reacted to SB 492.
Stock prices for Edison International and PG&E dropped more than 20% on Monday. Stock in Sempra — the parent company of SDG&E — dropped almost 3%.
“You saw what happened today in the markets … This is a consequential moment, and you see the consequences playing out in real time,” Newsom told reporters Monday evening.
Two groups that supported the bill took aim at the state’s power companies.
“SB 492 was a negotiated leadership compromise. Now it is dead because the utilities wanted even more,” Joy Chen, executive director of Every Fire Survivor’s Network, and Jamie Court, president of Consumer Watchdog, said in a statement. “They would rather kill the bill than accept a compromise that rejected the bailout they sought.”
They pointed to Sempra stock prices, which did not drop as steeply Monday as Edison and PG&E. SDG&E, a subsidiary of Sempra, has spent more than $6 billion of ratepayer dollars to avoid a repeat of a string of deadly wildfires in 2007 in its service territory.
“If Wall Street does not trust Edison and PG&E to stop causing catastrophic fires, California should not solve that problem with another bailout,” Chen and Court said. “Edison and PG&E should solve it by stopping the fires.”
California has been ground zero for a series of disasters, including the 2019 Camp Fire that killed 85 people and led PG&E into bankruptcy proceedings and the January 2025 Eaton Fire in Altadena that investigators said was caused by an out-of-service Edison transmission line.
SB 492 included provisions that would have:
Created a “fast-pay program” that would speed up the process for wildfire survivors to receive payments on their claims.
Restricted utility executives from receiving bonuses during a year in which their companies cause a wildfire that damages or destroys 500 or more structures.
Prohibited individuals and businesses from selling or transferring wildfire claims to private equity firms.
The bill was a slimmed-down version of what Newsom asked for.
It included a measure aimed at blocking insurance companies from suing utilities over wildfire-related legal claims — a legal maneuver known as “subrogation” that helps put a lid on rising insurance rates, but utilities oppose it because they say it leads to customers paying higher rates on their power bills to cover wildfire liabilities.
Even though SB 492 was put on ice, “this work was not for nothing,” Becker said. “We’ve advanced new ideas and discussions that will be the foundation for future progress to deliver for the people of California.”
“We cannot and must not ever continue to allow the perfect to be the enemy of the good because all elements desired (in SB 492) were not landed by the parties,” said Sen. Steve Padilla, D-San Diego.
He said the three-party agreement “had real benefit to help Californians today — here, today, now. And it is unfortunate that they did not muster the political will to do just that.”
Humberto Gurmilan, an SDG&E spokesperson, told the Union-Tribune that “California’s climate-driven wildfire challenges are too important to leave unresolved, and it is critical that policymakers develop a sustainable structure for wildfire survivors, customers and communities across the state.”
The withdrawal of SB 492 underscores a difficult issue: Trying to prevent insurance companies from charging sky-high rates to customers living in fire-prone areas (or leaving the California market altogether) while at the same time keeping already-burdensome utility rates that customers pay from soaring even higher.
Average residential electricity rates in the Golden State have grown faster than inflation, and the Public Advocates Office reported that SDG&E rates have swollen 97% in the past 10 years. Southern California Edison’s average residential rate has climbed 101%, and PG&E’s has risen 69% during the same time frame.
Furthermore, according to a study from the California Earthquake Authority, wildfire-related charges — which include the costs of efforts to reduce fires plus the costs of liability of fires that have already happened — add about 14% to an SDG&E customer’s total bill, or $21 per month. In PG&E’s service territory, wildfire charges add 19%, or $41 per month. For Southern California Edison customers, wildfire charges account for about 17%, or $27 per month.
“We have a real problem (with wildfires in California), and the chickens are coming home to roost — and that’s not going to be inexpensive to deal with,” said Michael Wara, who has served on the Commission on Catastrophic Wildfire Cost and Recovery.
Wara, whose titles include director of the Climate and Energy Policy Program at Stanford, said policymakers face a set of bad choices.
The questions, he said, include, “Do the people that live in the places with a lot of fire risk pay more? Or do people who don’t live in high-risk places but happen to live in hot places pay more?”
In 2019, Newsom and the Legislature passed Assembly Bill 1054 that created a $21 billion wildfire insurance fund — with half the money coming from the investor-owned utilities and half from ratepayers — that power companies could tap in the event of catastrophic fires. At the tail-end of last year’s legislative session, another $18 billion was earmarked to supplement the fund.
But with damages related to the Eaton Fire estimated at the high end of $45 billion, concerns have been raised that the money could be quickly drained if another big fire breaks out.
