By: @Anthony Tannehill
CSDA successfully advocated to protect special districts’ ability to seek full restitution for wildfire damages from investor-owned electric utilities (IOU’s) as Governor Gavin Newsom’s proposed liability package was introduced over the final weekend of the 2025-2026 State Legislative Session without provisions opposed by CSDA and other key stakeholders.
SB 492 (Becker and Petrie-Norris), was introduced early Saturday morning, August 29 following a series of negotiations between legislators and the Newsom Administration. Following a brief informational hearing on Monday, August 31, the compromise legislation failed passage when it was not brought forward for a vote prior to the Legislature’s adjournment the next day.
The California State Constitution requires legislation to be made publicly available in print for at least 72 hours prior to its final passage. The Legislature intended to act on SB 492 after its August 31, 2026 end of session deadline because it included an “urgency clause,” requiring a two-thirds vote threshold. Ultimately, this higher threshold may have contributed to the inability of the Legislature to muster sufficient support for passage.
The Governor’s original proposal sought to shift IOU wildfire liability risks and costs to other segments of society, including local agencies and the people they serve. Four provisions that CSDA and other stakeholders successfully fought to remove included:
- Limitations on public entity claims against IOUs to diminution in value for public infrastructure
- Limitations on cost-recovery claims against IOUs for emergency response and mutual aid
- Limitations on claims against IOUs for lost local property tax funding
- Limitations on insurance subrogation from IOUs, a process where an insurance company pays the loss to its client and then seeks to recover that loss from the liable party
CSDA worked with the Governor’s administration, legislators, and key legislative staff, together with aligned stakeholders. Additionally, CSDA and its members issued public statements and media interviews to reinforce its message of rejecting the privatization of profits and socialization of costs.
The measure in its final form covered numerous other topics in the wildfire space, including a state-administered “Fast-Pay” program for individual claimants to quickly request a percentage of their likely financial award, restrictions on attorney’s fees for certain wildfire-related litigation, restrictions on third-party private equity purchasing claims, and reforms to statewide wildfire data platforms, data sharing, and county-level community wildfire protection plans, as well as limitations on IOU executive compensation following certain wildfires.
CSDA formally moved its position on the wildfire liability package to neutral in consultation with its ad-hoc working group after the legislation was made publicly available in print.
Governor Newsom was expected to sign SB 492 until the 11:00am hour of the final day of the legislative session. Just three days prior, his press office issued the following statement regarding the legislation:
“We reached a compromise that blocks hedge funds from profiteering off wildfire survivors, bars utility executives from taking bonuses when their company ignites a fire, and gets money into survivors’ hands faster. It also establishes a Statewide Community Wildfire Strategy to better coordinate prevention and preparedness efforts across the state. This is all real progress for future fire survivors.
“Nonetheless, this system needs full structural reform — not a partial one. I urge the Legislature to build on this progress next year and finish the work we started to secure the Wildfire Fund’s long-term durability, stabilize electricity rates, and ensure fire victims are never again turned into unsecured creditors in a bankruptcy proceeding.”
At this time, a special session has not been called and it is anticipated wildfire utility liability will re-emerge as a high priority in the 2027-2028 State Legislative Session.
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