Governor Newsom’s Secretive Legislative Moves on Wildfire Costs Draw Criticism

If you live in California, you might have noticed ads about surging home insurance rates and claims that the FAIR Plan is flawed. These ads encourage residents to contact state representatives to address the wildfire issue to make living in California more affordable. These ads connect with claims by Los Angeles fire survivors, consumer advocacy groups, and the insurance industry regarding Governor Gavin Newsom’s alleged attempts to ease utilities’ liabilities from wildfires.

As the legislative session resumes soon, Governor Newsom’s staff are in discussions with state lawmakers about solutions to the challenges of wildfire recovery and managing catastrophic risks in California. A spokesperson confirmed these talks, but the specifics of the legislative proposals remain undisclosed. Anthony Martinez, the governor’s spokesperson, refrained from detailing if the proposals would limit compensation for fire victims’ pain, eliminate insurers’ rights to recoup wildfire costs from utilities, or cap attorneys’ fees.

The Every Fire Survivor’s Network and Consumer Watchdog oppose these potential legislative changes. Both groups argue that the proposed bills could shift the financial burden from utility companies to insurance policyholders. Insurance industry representatives agree with this perspective, with all parties criticizing the late-stage political maneuverings known as “gut-and-amend.” This process involves stripping content from existing bills and inserting new language for different purposes.

“Californians deserve a government that operates openly,” said Joy Chen, leader of the Every Fire Survivor’s Network. She pressured the governor to prioritize democratic values over corporate interests.

Joy Chen, in an open letter, accused Newsom of previously assisting utilities in avoiding accountability for wildfires they cause. Major California utilities like San Diego Gas & Electric, Southern California Edison, and Pacific Gas & Electric hold significant sway in the state. Their donations surpassed $1.2 million in the 2025-26 legislative session.

Discussions between Newsom’s office and lawmakers are partly guided by a report from the California Earthquake Authority. Under Senate Bill 254, the report analyzed equitable methods for handling natural catastrophe costs. The bill, revised late last year, permits utilities to pass additional wildfire expenses to consumers if these expenses surpass a wildfire fund created in 2019. This fund’s $21 billion was funded equally by utilities and consumers through surcharges.

Eaton fire survivors sued Edison, attributing negligence to the fire. With claims potentially exceeding available fund resources, the April report recommended raising utility customer surcharges by $8.50 per month, totaling $11 monthly.

Wildfire Victims First advocates urged lawmakers to implement recommendations from the report. They argue payouts often prioritize trial attorneys over victims. This campaign lacks support from any wildfire survivor groups and instead comprises local chambers of commerce and business entities. Jennifer Gray Thompson, CEO of After the Fire, withdrew her organization’s support, realizing the coalition lacked fire victim representation.

Among campaign supporters, the Bay Area Council counts PG&E as a member. Their spokesperson emphasized support for policies balancing wildfire risk reduction with business and resident needs.

A Consumer Watchdog analysis revealed that 66% of the campaign-supporting organizations had utility-industry financial ties totaling $7.3 million. Despite this, some claim Consumer Watchdog acts as a trial attorney’s lobbyist, prioritizing their interests over victims’. Support from PG&E, Edison, and SDG&E continues for the Wildfire Victims First campaign.

State Lawmakers’ Reactions

Senator Ben Allen, who represents Palisades fire survivors, attended a press conference to hold responsible parties accountable. As chair of the Senate energy and utilities committee, Allen remains vigilant on proposals to ensure affordability and accountability during wildfire recovery.

Senator Sasha Renee Perez, representing Eaton fire survivors, expressed strong opposition to unexpected legislative proposals limiting victims’ compensation. Her constituency includes personal connections to the tragic consequences of fires. She criticized Senate Bill 254’s transformation from reducing utility profits to enabling them, expressing discontent with the legislative process.

CalMatters reached out to various lawmakers, though some declined comment. Those responding echoed concerns about the current system’s inefficiency regarding fire survivor support and addressed insurance policyholder interests.

Insurance Industry’s Stand

Insurance representatives insist that limiting subrogation, or recovery of costs from utilities, could lead to increased insurance premiums. Denni Ritter, from the American Property Casualty Insurance Association, argues that policyholders should not bear the cost of utility shareholder bailouts. Ritter refuted claims that insurance companies prioritize recovery from utilities before aiding policyholders.

Rex Frazier of the Personal Insurance Federation of California discussed the current campaign as another utility-led attempt to mitigate liability. Despite occasional discussions with utilities, he observes no current dialogue and questions the ads targeting the insurance market from Wildfire Victims First.