California ended its 2026 legislative session without agreement on another major rewrite of financial responsibility when utility equipment causes catastrophic wildfires. Governor Gavin Newsom and investor-owned utilities sought structural changes that could reduce utilities’ exposure and protect their ability to borrow and invest, while fire survivors, insurers and consumer advocates resisted shifting costs away from utilities. A late compromise, SB 492, preserved uncapped survivor compensation and insurer subrogation, allowing insurers to seek reimbursement from utilities, but the Assembly did not take it up. The unresolved debate affects victim recovery, electricity rates, utility creditworthiness and investment in a safer electric grid. Someone ultimately pays after a utility-caused wildfire: investors, insurers, ratepayers, taxpayers or survivors. The real policy problem is assigning that risk without weakening either accountability or the grid investments meant to prevent the next fire.
Which balance should California strike between wildfire victims and utility financial stability?