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2d ago

California Compromise on Wildfire Liability Collapses as Assembly Declines to Vote

The failure leaves utilities subject to California’s strict liability rules and heightens questions about the Wildfire Fund’s durability.

Senate President pro Tempore Monique Limón, right, listens to speakers with, from right, state Senators Aisha Wahab, Sabrina Cervantes and Laura Richardson during a floor session in the Senate Chambers at the Capitol, Monday, Aug. 31, 2026, in Sacramento, Calif. (AP Photo/Jeff Chiu)
Assemblymember Jacqui Irwin, right, talks with Assemblymember Steve Bennett during an Assembly session at the Capitol, Monday, Aug. 31, 2026, in Sacramento, Calif. (AP Photo/Jeff Chiu)
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Overview

  • The negotiated package known as SB 492 was not brought to a vote by the Assembly and effectively died on Tuesday, leaving the compromise from week‑end talks unresolved.
  • Gov. Gavin Newsom’s bid to limit insurer subrogation rights — the ability of insurers to sue utilities to recoup wildfire payouts — was blocked by lawmakers during negotiations.
  • The scaled‑back SB 492 would have created a Fast Pay program to speed survivor payments, banned hedge funds and private‑equity buying of claims, capped some attorney fees, and barred certain executive bonuses after major utility‑caused fires.
  • Investors reacted sharply this week as utility stocks plunged when the deal failed to include limits on liability and then moved on news the bill stalled; utilities and regulators warn the unresolved liability rules raise borrowing and rate pressures.
  • The collapse returns the core question of who pays for utility‑started fires to next year and increases the likelihood of further action, including a possible special legislative session and renewed debate over stabilizing the Wildfire Fund.