Newsom, Lawmakers Reach Last-Minute Deal on Wildfire Fallout

Key Points:

• California Governor Gavin Newsom and legislative leaders reached a last-minute agreement on wildfire liability rules aimed at lowering electricity rates and improving compensation for wildfire survivors, focusing on limiting hedge fund profits and utility executive bonuses related to fire damages.
• The legislation, Senate Bill 492, authored by Sen. Josh Becker, creates a program to speed up payments to wildfire victims but stops short of banning insurance companies from suing utilities, instead restricting the sale of subrogation claims to private equity firms.
• California utilities, held strictly liable for wildfire damages caused by their equipment, have passed billions in wildfire-related costs onto customers, contributing to some of the highest electricity rates in the nation; wildfire-related charges add about $27-$41 monthly to customer bills.
• The deal includes protections for survivors by capping attorney fees in subrogation cases and limiting law firm communications post-disaster, but it faced criticism from some survivor groups and trial attorneys concerned about limiting claims and perceived utility bailouts.
• Lawmakers will vote on the measure under an urgency clause shortly after the legislative session ends, with concerns raised about the short timeframe for reviewing complex wildfire legislation amid ongoing wildfire risks and insurance industry challenges in California.