Time and time again, California’s big three investor-owned utilities have attempted to shift the cost of their own incompetence to ratepayers in the aftermath of wildfires they have been proven to cause. Now, state leaders in Sacramento have spent the final days of the eight-month legislative session racing against the clock to codify that financial dodge, and what is essentially a utility bailout, into law.
Democratic presidential hopeful and outgoing Gov. Gavin Newsom has devised the plan and shepherded it through closed-door negotiations. Based on what we know, it would limit claims that victims of utility-caused fires can bring against utilities, block insurers from recouping losses through a process of seeking payouts from liable third parties called subrogation, and make it harder for survivors to access representation by capping attorneys’ fees.
Newsom’s rationale for the bailout is that utilities are so weighed down with litigation and liability that they cannot invest in infrastructure and additional power resources, leading to squeezes in supply and higher prices. But a coalition of fire survivors, consumer advocacy groups, local governments, trial lawyers, and insurers who first sounded the alarm on the governor’s plan earlier this month have challenged this narrative.
A key actor among those taking a stand is Every Fire Survivor’s Network (EFSN), a survivor community that has proposed its own alternative to the governor’s wildfire utility bailout. Joy Chen, executive director at EFSN, has pushed back on the Newsom administration’s claim that the California Wildfire Fund, a statutory account that is supposed to be available to victims so they don’t have to wait for utility payouts, “will soon be depleted.” According to modeling cited by EFSN, the Wildfire Fund has $38 billion in payment capacity, and estimated claims of $10 billion to $15 billion. Chen said the Newsom administration has not produced any data or refuted that modeling. “There’s no financial emergency that justifies an eleventh-hour bailout,” she told the Prospect.
Newsom’s rationale is that utilities are so weighed down with litigation and liability that they cannot invest in infrastructure and additional power resources.
Lawmakers in Sacramento countered Newsom’s plan with their own legislative package this week. While there are still gaps, Chen commended the legislature for “standing up against the bailout.” According to EFSN, the package could be introduced as late as 11:30 p.m. tonight. The deadline for legislative amendments is at midnight.
“It is now past the eleventh hour [in] an eight-month legislative session,” said Chen. “It is so late now that if something does go into print, there will be no time to do any amendments at all.”
FOLLOWING THE CAMP FIRE in 2018, Pacific Gas & Electric Company (PG&E) voluntarily entered bankruptcy to shield itself from tens of billions of dollars in liabilities. Survivors found themselves in limbo, waiting years for compensation that would later come in the form of a $13.5 billion settlement. PG&E pleaded guilty to 84 counts of involuntary manslaughter and one felony count of unlawfully causing a fire, which was the deadliest in the state’s history and sparked by a downed transmission line.
In June 2021, the utility went before the California Public Utilities Commission (CPUC) seeking a rate increase. The two-year proceeding ended in November 2023, with billions of dollars in wildfire mitigation funding for PG&E. Customers saw their monthly bills increase by 13 percent.
More than a decade earlier, poorly maintained transmission lines owned by San Diego Gas & Electric (SDG&E) ignited the 2007 Witch Creek Fire, which caught up with a separate wildfire that was already blazing to the west. Two people died in the Witch Creek Fire, and over 1,000 homes were destroyed. SDG&E paid out roughly $2.4 billion to settle lawsuits brought against the utility for its role in sparking fires across the state that year. The company fought for years to stick customers with the bill, but the CPUC rejected its request to recover $379 million in losses through rates in 2017. (SDG&E unsuccessfully appealed the decision.)
Electric arcing on an out-of-service tower owned by Southern California Edison (SCE) caused the Eaton Fire, which killed 19 people and incinerated thousands of homes and small businesses, in January 2025. While the utility has yet to file an application with the CPUC to review the costs of the Eaton Fire, SCE’s latest Form 10-Q filing with the Securities and Exchange Commission indicates that it will. The utility, which exhausted its self-insurance coverage for the Eaton Fire in February, plans to seek recovery of uninsured losses “through electric rates.”
Across California, ads have been running for weeks in support of the proposed bailout. According to a report from the California-based advocacy group Consumer Watchdog, many of those ads were bought and paid for by Wildfire Victims First, a utility-funded front group whose spokesperson and director is Nathan Click, a former Newsom communications director. The media company behind the front group’s television ads, Polaris Campaign Media, is the affiliated media-buying firm of Bearstar Strategies, Newsom’s political consulting firm as well as the force behind Xavier Becerra’s unlikely nomination to replace Newsom.
“Sixty-six percent of Wildfire Victims First members receive direct utility funding, while dozens maintain governance ties through utility executives and government affairs officials serving in leadership positions,” the Consumer Watchdog report explains.
Consumer Watchdog found that PG&E, SDG&E, and SCE spent nearly $17 million lobbying state lawmakers in the first six quarters of the 2025-2026 legislative session, representing “the highest lobbying total of the Newsom administration and of all time.” The state’s big three for-profit utilities gave approximately $1 million to the governor’s campaigns and causes during his term.
Several utility-aligned environmental groups, including the Environmental Defense Fund and Natural Resources Defense Council, recently placed an ad outlining their vision for a potential wildfire package. As Consumer Watchdog observed, the common thread running through the different groups is the Energy Foundation. Alongside the Energy Action Fund, its 501(c)(4) counterpart, the Energy Foundation “dominated funding for activist groups, helping ensure that their lobbying on energy issues took a ‘pro-business, pro-deregulation and pro-private-utility stance.’”
Real fire survivors have lamented the distastefully named Wildfire Victims First front group, taking to the streets and even the governor’s mansion to make their voices heard. “We are the real fire survivors,” Chen told the Prospect.
On Tuesday, dozens of community members gathered in Sacramento, sharing survivor stories and meeting with state lawmakers. Assemblymember Isaac Bryan (D), who represents West and South Los Angeles, spoke to the long-standing trauma shared by victims of the Eaton Fire, pointing the finger at SCE for its role in sparking the blaze.
“We cannot forget about Altadena,” Bryan said. “We cannot forget about the people who lost their lives. We cannot forget about the Black homeownership that was lost and must be regained. And we have to remember who caused that fire. It was arson, but a different type of arson. Utility arson.”
The phrase ‘No Lines Between Survivors’ crystallized at Tuesday’s gathering. Chen, who was forced to evacuate with her family during the Eaton Fire, scrutinized a provision included in the legislature’s counterproposal that would arbitrarily preclude survivors from being eligible for compensation. That provision would use a fire perimeter to determine eligibility. “A fire perimeter maps a fire. It does not measure actual harm,” she said.
The Eaton Fire ripped through the backyards of row homes on the north side of Chen’s property, where she has a chicken coop. The perimeter line cuts directly through the property, meaning her house is outside the perimeter line, and the chicken coop is inside it. Under the aforementioned provision, Chen would likely not be eligible for compensation on damages to her home. Most smoke-damaged homes would be excluded as well, she said.
“Somebody 400 feet away from me died,” Chen told the Prospect. “We could have died or been injured, and my house could have burned down, but we just got incredibly lucky.”
California’s big three for-profit utilities have seen their profits and executive pay soar in recent years. In 2025 alone, PG&E, SCE’s parent company Edison International, and Sempra, which owns SDG&E, paid their CEOs nearly $60 million, issued more than $3 billion in dividends, and raked in over $10 billion in profits, according to EFSN.
“California does not have a wildfire liability problem. California has a catastrophic fire causation problem,” Chen said. “Three for-profit electric monopolies keep burning down California communities, and have now made California the world’s most dangerous place for catastrophic wildfires.”
