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In a late-night deal with lawmakers, Gov. Gavin Newsom agreed to drop his push for legislation that would have shifted more of the cost of utility-sparked wildfires to property insurers, sharply raising premiums across the state.

After weeks of closed-door negotiations with lawmakers and protests by wildfire survivors, the governor also backed away from a proposal that reduced amounts fire victims could receive and transferred more of the damage costs to local governments.

Wildfire victims and other critics had called the plan a corporate bailout.

According to a 96-page bill, published at 7:26 a.m. Saturday, Newsom and lawmakers agreed on some measures aimed at reducing the costs of future utility-sparked wildfires.

The bill would limit certain fees of attorneys representing insurance companies, while also stopping hedge funds and private equity firms from profiting on wildfire claims.

Last year, hedge funds were offering to buy claims that insurers had against Southern California Edison for the Eaton fire, leading to calls for reform.

The bill would also create a state program to get payments more quickly to wildfire victims.

“This is all real progress for future fire survivors,” Newsom said in a statement.

“Nonetheless, this system needs full structural reform — not a partial one,” he added. “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.”

The complex legislation — added by gutting and amending a bill known as Senate Bill 492 — was introduced less than three days before the legislative session was to end Monday.

The session must now be extended until Tuesday because of a 2016 voter-approved proposition that requires bills or amendments to be in print at least 72 hours before the state Senate or Assembly can vote on them.

Eaton wildfire survivors and other groups had been calling on Newsom for weeks to unveil the legislation so that they could see the details.

More than 50 Eaton fire survivors showed up to protest in front of the governor’s mansion on Monday night in Sacramento, where Newsom was holding an event for legislators.

“Who should pay?” they chanted. “Shareholders should pay!”

On Saturday, wildfire victims praised lawmakers who had stood up to the governor’s push for legislation benefiting the utilities.

“Survivors from across California came to Sacramento and asked our elected representatives to stand with the people whose homes, communities and lives have been devastated,” Joy Chen, executive director of Every Fire Survivor’s Network, said. “They listened. And in the face of extraordinary pressure from some of the most powerful interests in our state, they centered on survivors and California families.”

Edison and the state’s two other big for-profit utilities had been lobbying Newsom and lawmakers to further shield them and their shareholders from wildfire liabilities ever since last year’s Eaton fire caused some investors to flee and the price of their stock to tumble.

Government fire investigators said the fire, which killed 19 people and destroyed thousands of homes, was caused by electrical arcing on Edison’s out-of-service transmission line in Eaton Canyon. Edison kept the line in place despite not using it since 1971.

More than 11,000 households have filed suit against the utility, claiming it acted negligently, which the company denies.

Utilities asked Newsom to strengthen a framework that he and lawmakers created in 2019 to protect utilities from bankruptcy after their equipment ignites a catastrophic fire. The law created a $21-billion wildfire fund, which is now reimbursing Edison for the settlements it is making to victims who agree not to sue.

Last year, also in legislation revealed in the session’s last days, Newsom created a second fund of $18 billion to pay for future fires.

According to a confidential document Newsom’s staff sent to lawmakers, the governor also wanted to cap the amount the fund would reimburse a utility for wildfire damages at $6 billion and require electric customers to pay for costs above that amount. That would have limited utilities’ liability for the fire but increased electric bills.

That measure was not in the legislation published Saturday morning.

Newsom said in his statement Saturday that the bill would strengthen accountability for utilities that spark fires by stopping executives from receiving bonuses after a fire.

The fine print in the bill states that the company must have a plan that prevents top executives from receiving “short-term” bonuses after a fire that results in 500 or more structures damaged.

The governor had touted in 2019 that his legislation had tied utility executive pay to the company’s safety performance. But the language allowed the companies to decide how to do that.

Despite the deadly Eaton fire, bonuses awarded to Pedro Pizarro, the chief executive of Edison International and other executives soared last year. Pizarro received $16.6 million in cash, stock and other compensation last year, up 20% from 2024.

The new legislation applies only to Edison, Pacific Gas & Electric and San Diego Gas & Electric. Those three for-profit utilities have caused at least seven of California’s 20 most destructive fires, according to the California Department of Forestry and Fire Protection.

THURSDAY’S RESULTS

City Section
Bell 6, Maywood CES 0
GALA 7, Foshay 6

Southern Section
Camarillo 19, Ventura 7
Canyon Country Canyon 33, Saugus 6
Capistrano Valley 7, Segerstrom 6
Compton 35, Hawthorne 0
Eastside 47, Rosamond 0
El Segundo 13, West Torrance 0
Hart 34, Valencia 0
Hueneme 63, Del Sol 0
Irvine 13, Dana Hills 6
Mira Costa 35, Santa Monica 12
North Torrance 37, Peninsula 7
Oaks Christian 19, Simi Valley 13
Orange Lutheran 34, Trabuco Hills 0
San Marcos 36, Sherman Oaks Notre Dame 6
Santa Margarita 19, Edison 13
South Torrance 39, Wiseburn-Da Vinci 0
Thousand Oaks 21, St. Bonaventure 6
Torrance 20, Carson 19
Westlake 24, Oxnard 13
Woodbridge 40, Beckman 27

Intersectional
Agoura 28, Cleveland 0
North County San Marcos 41, San Clemente 13
Torrance 20, Carson 19

WEDNESDAY’S RESULTS

City Section
Los Angeles Roosevelt 18, Elizabeth 0
Narbonne 30, Maywood CES 0

Southern Section
Agoura 32, Royal 13
Alhambra 19, El Rancho 18
Aliso Niguel 19, Dana Hills 0
Anaheim Canyon 21, La Habra 13
Antelope Valley 73, Rosamond 0
Ayala 30, Laguna Beach 7
Azusa 27, Mountain View 6
Baldwin Park 48, El Monte 14
Beaumont 36, Palm Desert 0
Bell Gardens 20, Hawthorne 6
Bishop Amat 36, Montebello 6
Bonita 52, Rancho Cucamonga 0
California 20, Bellflower 0
Cathedral City 16, Desert Hot Springs 15
Cerritos 13, Villa Park 6
Cerritos Valley Christian 41, Oxford Academy 0
Chino 21, Charter Oak 14
Colony 25, La Mirada 0
Compton 25, Compton Centennial 0
Compton Early College 12, Dominguez 0
Corona Centennial 26, Murrieta Mesa 0
Corona del Mar 20, Huntington Beach 18
Corona Santiago 27, El Modena 12
Covina 28, Schurr 0
Crean Lutheran 7, Segerstrom 6
Cypress 15, Lakewood 0
Downey 37, Mayfair 6
Estancia 7, Costa Mesa 6
Fullerton 36, Laguna Hills 19
Irvine University 21, San Juan Hills 12
La Canada 18, Village Christian 13
La Serna 32, St. Paul 9
Loara 32, Saddleback 20
Long Beach Cabrillo 26, Whitney 8
Long Beach Wilson 47, Paramount 0
Los Alamitos 13, Fountain Valley 12
Newbury Park 33, Buena 0
Newport Beach Pacifica Christian 46, Capistrano Valley Christian 6
Newport Harbor 25, Edison 6
Northview 27, Pasadena Poly 0
Ocean View 16, Glenn 13
Ontario Christian 34, Pomona 0
Oxnard Pacifica 18, Fillmore 7
Palm Springs 6, Xavier Prep 0
Placentia Valencia 24, Garden Grove 12
Riverside Poly 13, Arlington 6
San Gorgonio 15, Arroyo Valley 0
San Marino 24, Ramona Convent 6
Sierra Canyon 40, Harvard-Westlake 6
Sonora 33, Brea Olinda 6
South El Monte 32, La Puente 7
St. Margaret’s 34, Buena Park 0
Sunny Hills 40, Long Beach Jordan 0
Tesoro 30, Foothill 19
Warren 32, Gahr 0
West Covina 19, Montclair 0

Intersectional
Bishop Montgomery 13, King/Drew 12
JSerra 52, Torrey Pines 26
Southwest EC 40, La Quinta 6

Insurance company executives warned Gov. Gavin Newsom in a letter Wednesday that his plan to shift utility wildfire liability to property insurers would raise premiums across California.

“The party whose equipment ignites a catastrophic fire should bear the economic consequence of that fire,” the 15 executives wrote. “Shifting those costs to policyholders does not reduce the cost of electricity but does make homeownership more expensive and insurance coverage harder to find.”

As the legislative session nears its end, Newsom’s staff and lawmakers have been negotiating behind closed doors on a deal to limit utilities’ wildfire liabilities.

According to a confidential document that Newsom’s staff sent to lawmakers and was obtained by Politico, the governor wants to stop property insurers from recouping their losses from homes destroyed in utility-sparked wildfires.

That could increase homeowners’ property insurance rates by as much as 50%, according to the Personal Insurance Federation of California. The highest hikes would be for those families living in severe fire risk areas.

“The proposal would shift billions of dollars in wildfire costs away from utilities and onto insurance consumers across the state, making coverage more expensive and harder to find,” said Denni Ritter at the American Property Casualty Insurance Assn.

Southern California Edison and the state’s two other big for-profit utilities have been lobbying Newsom and lawmakers to further shield them and their shareholders from wildfire liabilities ever since last year’s Eaton fire caused the price of their stock to tumble.

Government fire investigators said the fire, which killed 19 people and destroyed thousands of homes, was caused by electrical arcing on Edison’s out-of-service transmission line in Eaton Canyon. Edison kept the line in place despite not using it since 1971.

More than 11,000 households have filed suit against the utility, claiming it acted negligently, which the company denies.

Edison is offering settlements to victims of the Eaton fire. A $21-billion state wildfire fund that Newsom and lawmakers created in 2019 to protect the state’s three big utilities from bankruptcy after a fire is reimbursing Edison for its payments to victims.

At a press conference Wednesday, Newsom defended his plan, which also includes limiting the fees of attorneys in wildfire litigation and stopping hedge funds from profiting on the claims.

Newsom said that current law allows insurers to be paid before victims after a fire.

“The insurance industry is going to do everything to make sure they get paid first,” Newsom said.

No legislation has yet been filed to end what are called insurers’ subrogation claims. The legislative session ends Monday at midnight. The short time frame would allow for little public debate of a bill filed this week.

According to the document written by Newsom’s staff, the governor also proposed reducing amounts that local governments receive from utility-caused fires. The California State Assn. of Counties said that would shift costs to local taxpayers.

“Shifting wildfire costs to local governments is unjustified when utilities continue to generate significant profits and return billions to shareholders,” the association said in a brief recently sent to lawmakers.

Newsom also wants to reduce payments that fire victims can receive for non-economic damages including pain and suffering, angering victims of the Eaton fire.

More than 50 Eaton wildfire victims showed up to protest in front of the governor’s mansion on Monday night in Sacramento, where Newsom was holding an event for legislators.

They chanted, “Who should pay? Shareholders should pay!”

Recently revealed evidence from government investigators and court filings renewed questions about Southern California Edison’s claim that it operated its electrical grid safely before last year’s deadly Eaton fire.

Most records surrounding the fire’s cause have been sealed at the request of Edison and plaintiff attorneys. Yet new details revealed in court show that critical fire prevention equipment needed repair before the blaze and that vegetation under the tower where it ignited hadn’t been trimmed for years.

Los Angeles County and state fire investigators cited eight violations, including three of California’s criminal code, in their report released on Aug. 4. The details were blacked out as the district attorney continues an investigation into the devastating fire.

“We don’t believe there is a basis for criminal liability and we will cooperate with any review,” said Kathleen Dunleavy, an Edison spokeswoman.

The investigators said in the report that the Jan. 7, 2025 inferno, which killed 19 people and destroyed more than 9,000 homes and other structures, was caused by electrical arcing on an out-of-service transmission line in Eaton Canyon, which caused hot metal fragments to fall into the dried vegetation below.

Here are key takeaways from the investigative report and recent court filings by lawyers representing fire victims:

Edison didn’t turn off power on its Eaton Canyon transmission lines, despite emergency conditions.

Before the fire, the National Weather Service predicted a “life-threatening” windstorm, investigators wrote in their report released Aug. 4. Santa Ana wind gusts were forecast to reach speeds of 60 to 80 miles per hour, with peak gusts of 90 miles per hour in the mountains.

Earlier that day, Gov. Gavin Newsom declared a state of emergency because of an out-of-control fire that was burning homes in Pacific Palisades.

Despite those conditions, Edison kept power flowing through its high-voltage transmission lines built in the mountains above Altadena. Investigators noted that wind gusts at a weather station about a half-mile from the Edison tower where the fire started recorded gusts up to 68 miles per hour just before the first flames at 6:11 p.m. By 7, gusts were up to 85 miles per hour.

Dunleavy said the conditions did not meet the company’s internal standards for shutting off the lines.

“SCE was actively monitoring the transmission lines in Eaton Canyon on Jan. 7 and none of these lines met our de-energization criteria,” Dunleavy said.

Safety equipment on the out-of-service line was damaged before the fire but not fixed.

Edison had installed safety equipment at both ends of the out-of-service, unconnected transmission line in Eaton Canyon, including at the pylon known as Tower 208 where the fire ignited. But on the night of the fire, the equipment was broken, according to a June court filing.

The equipment was designed to send any unexpected power on the out-of-service line safely into the earth. The grounding equipment was necessary because the idle Mesa-Sylmar line ran parallel to 12 energized high-voltage lines, creating the danger of induction.

Induction happens when electromagnetic fields cause power on energized lines to jump to nearby idle equipment.

At Tower 208, a component known as a compression paddle was not securely bonded to the pylon, allowing debris to form and creating a dangerous air pocket, the filing said. The paddle was meant to be secured with four bolts, but only one bolt was used.

Government fire investigators also found broken equipment at one of the Mesa-Sylmar towers during a tour of the site with Edison after the fire. According to their report, investigators observed “the center conductor dangling free from the bridge section of the tower; it appeared that the remaining two conductors were not bored down to the tower bridge.”

The investigators said they discussed the equipment “abnormalities” with an Edison lineman and lawyer on the tour. “The Lineman said that they were not new and were like this last year; he was also unsure why they were not corrected when it was inspected,” the investigators wrote.

Asked why the equipment was not fixed, Dunleavy said, “We’re looking into that.”

She said the company strives to have a strong maintenance and inspection program and still was performing post-fire examinations and testing.

Edison kept the century-old, out-of-service Mesa-Sylmar line in place for decades, despite knowing idle lines could reenergize and spark fires.

Utilities have known for decades that unused lines can become energized from nearby electrified equipment through the induction process.

To teach employees about the danger, Edison created a training video featuring a 2007 incident in which a line known as the Kramer-Coolwater circuit was de-energized to allow work by a crew. The line became reenergerized while laying on the ground and started several fires, according to a retelling of the video in a July court filing by lawyers representing victims. Later that day, the crew’s foreman was injured when he touched the line.

Eleven years later, the Kramer-Coolwater circuit was unconnected from the grid, similar to the line in Eaton Canyon. Yet the line was electrified by induction from adjacent lines again in 2018, electrocuting a lineman who touched the conductor, the court filing said.

The company has said it kept the line in place even though it hadn’t carried power since 1971 because executives believed it could be used in the future.

Dunleavy said the induction event in the training video was different from what appears to have happened on Jan. 7 with the Eaton Canyon transmission lines.

“We had never seen an idle, de-energized transmission line cause an ignition,” she said.

Edison failed to clear vegetation below the tower where the fire ignited.

The investigators’ report said the fire ignited when electrical arcing on the idle line caused hot metal particles to fall into “the receptive fuel beds consisting of dry vegetation” below the tower.

The June court filing includes details from Google Earth images showing that the vegetation under Tower 208 had not been trimmed since at least 2021. Leaving the brush to grow violated Edison’s safety standard for “structure brushing,” the filing said.

Edison explained structure brushing in an article last year, describing how it cleared all vegetation around certain equipment, creating a 10-foot barrier to reduce the fire risk.

Asked why Edison let brush grow below the idle line, Dunleavy said, “We inspect and maintain all our equipment according to existing regulations and laws.”

Edison has sued L.A. County and other public entities, saying that their failures, including not clearing brush and delayed evacuation warnings, increased the fire’s destruction.

A fight over accountability

The first jury trial looking at whether Edison acted negligently in igniting the fire is scheduled to begin Jan. 25.

Later, state regulators will evaluate whether the company acted “prudently” in its actions related to the fire’s start.

Under a 2019 law brought by Newsom to protect utilities from bankruptcy, the companies automatically are deemed to have acted prudently if regulators sign off on their wildfire prevention plan.

Newsom’s safety regulators approved Edison’s plan just before the Eaton fire. That means Edison will be fully reimbursed for the billions of dollars in Eaton fire damages by a state fund that Newsom’s legislation created unless outside parties can prove Edison acted imprudently, negligently or worse.

“We continue to believe we will make a good faith showing of prudency,” Dunleavy said.

Newsom is working behind closed doors on legislation to further protect Edison and the state’s two other big for-profit electric utilities from the cost of wildfires caused by their equipment, the Times reported this year.

The three companies’ equipment ignited at least seven of the state’s 20 most destructive wildfires, according to CalFire. The Eaton fire was the state’s second-most destructive fire after the 2018 Camp fire, which killed 85 people and destroyed most of the town of Paradise. That fire, according to investigators, was ignited by an old transmission line owned by Pacific Gas & Electric.

The survivors of Eaton and other fires are fighting Newsom’s plan, saying it would leave California more vulnerable to utility-sparked fires.

“The real danger is what will happen to Californians if we further strip away these corporations’ financial incentives to prevent catastrophic fires,” Joy Chen, executive director of Every Fire Survivor’s Network, wrote in an analysis sent to state lawmakers this week.

“These are not innocent companies overtaken by climate change, nor is this an abstract problem of ‘wildfire liability,’” she wrote. “It is a continuing pattern of catastrophic corporate failure.”