Gavin Newsom wildfire plan faces revolt over warning it will spike insurance rates across California

Gov. Gavin Newsom’s latest proposal that could help private utility companies dodge liability for wildfires sparked by their own equipment is facing heat from survivor groups.

A coalition of insurers, local governments, fire survivors, attorneys and consumer advocates urged state lawmakers to reject the plan in a fact sheet titled “Wildfire Recovery Reform: Survivors First” — warning it would drive up insurance costs statewide while capping what fire victims and insurers can claw back from utilities.

“Wildfire survivors should not be asked to subsidize utility shareholders. Families who have lost loved ones, homes, businesses, and livelihoods because of utility-caused fires deserve full compensation and a clear path toward recovery,” the coalition wrote in an Aug. 11 letter to the legislature.

Newsom’s utility bailout push comes as California’s wildfire liability fund nears depletion after being drained by Southern California Edison’s payouts to victims of last year’s Eaton Fire, which has been blamed on sparks from a decades-idle Edison transmission line.

Utility equipment has caused seven of the world’s 20 most expensive wildfires, every one of them in California, the coalition said.

Existing liability rules put utilities on the hook for the disasters their equipment causes.

“The Legislature is now being asked to consider proposals that would instead transfer those costs to homeowners’ insurers, local governments, state taxpayers, and the very communities devastated by these disasters,” the groups added.

Californians would still foot the bill for utility-caused fires under Newsom’s plan, the coalition warned — through “higher insurance costs, higher taxes, diminished public services, or reduced compensation for wildfire losses.”

In his own fact sheet, Newsom blasts a “broken system that is not working for survivors, taxpayers, or ratepayers” — and blames insurance companies and hedge funds for making survivors fight for “money they deserve to rebuild their homes.”

Joy Chen, who leads the Every Fire Survivors Network, branded the proposal a multibillion-dollar bailout for big utilities — funded by the very victims they burned.

Chen said the plan would redraw payout eligibility by carving narrow “zones of danger” along fire lines — leaving anyone outside them without a dime, even if toxic smoke wrecked their homes.

“This is through and through a bailout for utilities on the backs of victims,” Chen told KCRA.

She added the plan would drag California down to dead last — 50th among all US states — in victim restitution for utility-caused fires.

Meanwhile, state Sen. Ben Allen — a Democrat whose district includes the area torched by the Palisades Fire — fired off letters to PG&E CEO Patti Poppe and Edison CEO Pedro Pizarro after the LA Times reported that both bosses signaled on recent earnings calls that, without a state bailout, they would protect shareholders by shifting capital into stock buybacks instead of infrastructure upgrades.

Allen told the companies he was “deeply troubled” by the threats, reminding them that wildfire liability is part of their “privileged license to operate in California.”

“While these threats are unclear as to their specific implications, it is imperative that California residents and businesses are not hindered in their reliance on the electricity and natural gas utility service they require for daily life,” Allen wrote in his Aug. 11 letter.

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