Governor Newsom proposes new limits on utility liability for wildfire damages

The proposed changes could alter how wildfire damages are paid, potentially increasing insurance costs for homeowners while limiting the financial responsibility of major utility companies for future fire-related destruction.

• •The proposal would limit the amount utilities must pay to wildfire victims and their attorneys.
• •Utility CEOs would be required to forfeit bonuses if their company causes a wildfire resulting in over $1 billion in damages.
• •Utility shareholders could face fines of up to $10 million for violating wildfire prevention requirements.
• •The plan aims to shift more property damage costs from utilities to insurance companies.
• •The state legislature has until August 31 to pass the proposal, or the Governor may call a special session.
• •California currently holds utilities strictly liable for damages caused by their equipment, even without a finding of negligence.
• •The state previously created a $21 billion wildfire fund in 2019, which the Governor expects to run out soon.
• •The legislature approved an additional $18 billion for the wildfire fund last year.
• •Six of California's 10 most destructive wildfires were caused by utility equipment.
• •The 2025 wildfire outside Los Angeles, which killed 19 people, was linked to a Southern California Edison transmission tower.