Look, I want to walk you through what Governor Newsom is working on in these final weeks of his time leading California, because it's going to affect all of us who live and work here. According to CalMatters Housing, the governor is pushing lawmakers to pass legislation that would reduce how much the major utility companies have to pay out after wildfires. We're talking about Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric, the three companies that power about three-quarters of the state. The argument from the governor's office is that these companies are being held responsible for too much damage, and that if a really catastrophic fire hits and damages are too high, a utility bankruptcy would actually hurt fire survivors even more because there wouldn't be money to compensate them.
Here's where it gets complicated though. There are a lot of people pushing back on this proposal, and they all have legitimate concerns. Insurance companies are worried they'll be stuck holding the bag and won't be able to recover their costs from the utilities. Fire survivors and the lawyers representing them are concerned the proposal will keep them from being made financially whole for what they've suffered. Local governments want to make sure they still get paid to rebuild their infrastructure. And when you look at what just happened with the Eaton Fire in January 2025, which killed nineteen people and destroyed nearly nine-thousand-five-hundred buildings, people are understandably angry. Southern California Edison was found responsible for that fire, so asking us to give utilities more financial protection right now feels pretty tone-deaf to a lot of folks.
According to the reporting, the governor wants to do a few things at once. He's proposing to limit who can make claims to the state's wildfire fund and limit what they can get. He also wants to help homeowners get off the state's insurer-of-last-resort program so they can get back into the regular insurance market, tie executive pay at utilities to safety performance, and require shareholders to help reduce customer rates. The problem is, the details are still really vague, and that's causing some real alarm. One Los Angeles wildfire survivor leader said you can't complain about bad actors taking advantage of the system and then push through what amounts to a secret bill.
The backdrop here is important for understanding the whole situation. When Governor Newsom took office in 2019, PG&E was dealing with massive liability from wildfires and declared bankruptcy. The governor signed legislation creating a twenty-one-billion-dollar wildfire fund, half paid by utility shareholders and half by customers through surcharges on their electricity bills. But that fund is expected to be drained when you add up insurance claims, Edison's settlements with survivors, and all the lawsuits that are still pending. Meanwhile, California already has the second-highest electricity rates in the country, and people are worried that if utilities have trouble borrowing money, those bills will just keep climbing.
The legislative calendar is tight here, with the session ending in a few weeks, so things are moving fast. Some lawmakers, particularly in the Assembly, seem willing to go along with the governor's approach, but Senate members are less certain. Fire survivors are urging lawmakers to slow down and have this debate in public instead of moving quietly behind the scenes.
What I am seeing locally is that people are caught between two real problems. On one hand, if utilities keep getting stuck with impossible bills and can't borrow money, that will drive up electricity costs for everyone and could destabilize the companies that keep the lights on. On the other hand, the trust is broken right now, and folks who lost everything in these fires don't believe a quiet fix in Sacramento is going to look out for them. In the Bay Area and throughout the East Bay, my clients in both camps are watching this closely because they know their insurance costs and electricity bills hang in the balance, and so does whether they can actually get fairly compensated if disaster strikes their home.
