Wildfire victim compromise bill killed in California Assembly

SACRAMENTO, Calif. - A compromise plan intended to assist California wildfire survivors collapsed in the state Assembly on the final day of the legislative session following intense pushback from major utility companies.

Expedited payment for victims

What we know:

Senate Bill 492, co-authored by Democrats Josh Becker and Cottie Petrie-Norris, would have established an expedited payment system for wildfire victims while holding major utilities, including Pacific Gas and Electric Company and Southern California Edison, liable if their equipment sparked a catastrophic fire. 

The proposal also would have allowed insurance companies to seek reimbursement from the utility providers to recoup financial losses.

Early celebrations by advocates

Why you should care:

Over the weekend, advocate groups including Consumer Watchdog and Every Fire Survivor's Network celebrated the announcement of the compromise deal between Gov. Gavin Newsom and state lawmakers. However, the proposal triggered a drop in stock prices for both PG&E and Southern California Edison.

Companies push back after stock drop

Following the market drop, chief executive officers from the utility companies sent a letter to state leaders warning that the agreement could push their companies into bankruptcy. They argued a bankruptcy would harm shareholders and shift financial burdens to the state and utility ratepayers through higher energy bills.

Bill killed

The backstory:

Assembly Speaker Robert Rivas chose not to call the bill for a final vote before the session concluded, effectively killing the measure. Within minutes of the decision to pull the bill, PG&E's stock price rose 7%.

Gov. Newsom, who sided with the utility companies regarding the broader structural concerns, released a statement following the decision:

"We need 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," Newsom said.

While the current session ended without a vote on SB 492, Gov. Newsom did not rule out calling a special legislative session to draft new wildfire legislation.