California Democrats kill bill to hold wildfire-starting utility companies accountable

California Democrats are punting on a bill to hold utility companies responsible for deadly wildfires across the state.

Assembly Speaker Robert Rivas announced on Tuesday that lawmakers will not move forward with Senate Bill 492, a major wildfire reform proposal, before the end of the legislative session — saying the measure falls short of providing enough relief for survivors or accountability for utilities.

“We will continue to tackle the difficult but critically important issue of wildfire reform,” Rivas, a Democrat from Hollister, said in a statement. “Sacramento shouldn’t settle when wildfire survivors lost everything.”

SB 492 is at the center of an increasingly contentious fight over California’s wildfire liability system and how much financial responsibility utility companies should bear when their equipment causes catastrophic fires.

Gov. Gavin Newsom pushed lawmakers to reach a deal on wildfire reforms before the end of session, prompting weeks of negotiations involving lawmakers, utilities, wildfire survivors, consumer advocates, trial lawyers and labor groups.

Newsom faced criticism for attempting to shift more costs for utility-caused wildfires to insurers, which had the potential to raise premiums across the state.

The Democrats’ decision to not pass SB 492 effectively ends the bill’s chances of advancing before lawmakers leave Sacramento this week.

Joy Chen, leader of the Eaton Fire Survivor’s Network, and Consumer Watchdog president Jamie Court issued a joint statement ripping legislators.

“SB 492 was a negotiated leadership compromise. Now it is dead because the utilities wanted even more,” the statement says. “Corporate special interests and utility lobbyists would rather kill the bill than accept a compromise that rejected the bailout they sought.”

Pacific Gas and Electric Company and Edison International shares plunged Monday by 20% and 23%, respectively, after California Democrats gutted Newsom’s proposal, which sought to change who pays when utility equipment sparks catastrophic wildfires. They rebounded initially Tuesday after it was reported SB 492 would not be moving forward.

Rivas said talks failed to produce legislation that lawmakers were prepared to approve.

“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,” Rivas said.

The collapse represents a significant setback for consumer watchdogs as well as Newsom’s end-of-session push, leaving the debate over wildfire costs and utility accountability to next year.

“We should not privatize the profits and socialize the risk,” Chen and Court said in their joint statement.

“California does not need to restore Wall Street’s confidence in Edison and PG&E. Edison and PG&E need to earn it by making California safer.”

The fight may not be over quite yet, though.

On Monday, Newsom said he could call a special legislative session to resume the debate, according to KCRA 3. His office did not respond to a question on whether or not he would attempt to call a special session.

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But in a statement Tuesday afternoon, Newsom said the state needs “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.”

“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,” Newsom said. “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.

He added, “Californians are relying on us to keep the lights on — they cannot afford for us to fail.”