Archive · 29 Aug 2026
California Lawmakers Block Newsom Utility Wildfire Liability Shield
California Governor Gavin Newsom wanted to change how utilities handle wildfire costs.
His plan would have stopped insurers from suing utilities to recover some money paid to wildfire victims.
State lawmakers blocked that part of the plan.
They worried it could make homeowners’ insurance more expensive.
The proposal could have helped utilities such as PG&E, Edison International and Sempra avoid very large bills.
Talks about a bigger wildfire policy package also broke down, according to reports.
Lawmakers still had a deadline to finish any changes before the legislative session ended.
Newsom continued supporting faster payments for victims.
He also supported stopping certain executive bonuses and speculative investments connected to wildfire claims.
California lawmakers blocked Governor Gavin Newsom’s proposal to limit insurers’ ability to recover wildfire payouts from utilities.
The measure would have protected PG&E, Edison International and Sempra from potentially substantial liabilities tied to fires caused by equipment.
Legislators expressed concern that restricting insurer lawsuits could lead to higher homeowner insurance premiums.
Negotiations on a broader wildfire-response overhaul reportedly broke down before a Friday legislative deadline.
Newsom still supports faster victim payments, executive-bonus restrictions and a ban on speculative wildfire-claims investments.
- Who
- California Governor Gavin Newsom, state lawmakers, insurers and publicly traded utilities including PG&E, Edison International and Sempra.
- What
- Lawmakers blocked Newsom’s proposal to restrict insurers’ ability to recover wildfire payouts from utilities through subrogation.
- When
- The proposal was blocked before a Friday legislative deadline, with a legislative vote scheduled for Monday.
- Where
- California.
- Why
- Newsom’s administration sought to contain utility wildfire liabilities and costs, while lawmakers raised concerns about higher homeowner insurance premiums.
Consumer and Insurance Concerns
Utility Liability Relief
Insurer recovery lawsuits
Consumer and Insurance Concerns
Lawmakers were concerned that blocking insurers from recovering wildfire payouts could lead insurers to raise already-increased homeowner premiums.
Utility Liability Relief
Newsom’s administration sought to bar insurers from suing utilities through subrogation, which would shield utilities from potentially massive liabilities.
Broader wildfire overhaul
Consumer and Insurance Concerns
Negotiations reportedly broke down, and lawmakers did not advance the broader changes aimed at containing utility costs.
Utility Liability Relief
Newsom and members of the wildfire-liability working group sought a broader overhaul of California’s wildfire response before the legislative deadline.
- Proposal blocked
- The Senate blocked the subrogation plan backed by Gavin Newsom, according to an official in the governor’s office.
- Utilities affected
- The proposal could have protected PG&E, Edison International and Sempra from potentially massive wildfire liabilities.
- Insurance concern
- Top legislators worried limiting insurer recovery actions could cause further homeowner premium increases.
- PG&E share decline
- PG&E shares fell as much as 11.75%, the sharpest drop since March 2020, according to Bloomberg.
- Edison share decline
- Edison International shares fell as much as 6.4%, the company’s largest decline since July 31.
- Remaining proposals
- Newsom continued supporting accelerated victim payments, restrictions on bonuses for executives of utilities that start wildfires, and a ban on speculative wildfire-claims investing.
- Legislative timing
- Lawmakers had to finalize policy details on Friday before a vote on Monday, when the legislature adjourns for the year.