California lawmakers fail to pass wildfire liability reform bill

The California Legislature has adjourned without passing Senate Bill 492, a controversial measure intended to overhaul the state’s wildfire liability framework. The bill, which sought to address the financial risks faced by major utilities, failed to gain support from lawmakers due to disagreements between the Governor, utility companies, and insurers regarding accountability and compensation for wildfire victims.

PG&E CEO Patti Poppe warned that the current liability system, which includes the doctrine of inverse condemnation, is driving up financing costs and making it difficult to fund essential work. Poppe stated that the company may be forced to freeze approximately $2 billion in planned 2027 investments due to these mounting financial challenges.

Major utilities, including PG&E and Edison International, argued that the proposed legislation did not provide sufficient long-term solutions for managing wildfire-related financial risks. Following the failure of the bill, Assembly Speaker Robert Rivas indicated that lawmakers would continue working on reforms, while Governor Gavin Newsom has not ruled out calling a special session to address the issue.