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Legislation that would have helped wildfire victims receive compensation more quickly, but that utilities said didn’t do enough to reduce their financial risks, died in Sacramento on Tuesday after the Assembly declined to vote on it.

The failure of Senate Bill 492 disappointed wildfire victims and lawmakers who had negotiated the language in a last-minute deal with Gov. Gavin Newsom.

“It is unfortunate that SB 492 was not given a vote,” said Senate President Pro Tempore Monique Limon (D-Santa Barbara). “Thousands of survivors made their voices clear — they needed reform to ensure the next wildfire does not continue to cause the mental and financial stress that recent disasters have placed on Californians.”

The bill’s failure was a win for the state’s three biggest for-profit utilities. Lawmakers say they will now continue working on reforms that Newsom had been pushing for, including limiting how much utilities have to pay for fires sparked by their equipment.

Share prices of Edison International and Pacific Gas & Electric had plummeted Monday after their investors learned that SB 492 did not include transferring more of the cost of utility-sparked fires to property insurers, a measure Newsom had proposed.

Insurers had warned the proposal could raise premiums by as much as 50%.

On Tuesday, with the failure of SB 492, the two companies’ stock recovered. Edison’s share price climbed nearly 9% to close at $58.80. PG&E’s shares rose 6% to $14.06.

The top executives of the two companies had written to legislative leaders Monday, calling on them to do more. The executives said their companies needed additional protection from wildfire costs because utility investors faced higher financial risks from such disasters in California than in other states.

“Faced with those risks, investors demand a higher return or invest elsewhere,” they wrote.

The companies had 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.

With the help of those protections, even though investigators found Edison’s equipment sparked last year’s deadly Eaton fire, the company’s profit in 2025 soared by more than 200% — from $1.3 billion in 2024 to $4.5 billion

Some wildfire victims and consumer groups said Tuesday they were angry that lawmakers had backed away from the bill.

“If Wall Street does not trust Edison and PG&E to stop causing catastrophic fires, California should not solve that problem with another bailout,” said Joy Chen, executive director of Every Fire Survivor’s Network, and Jamie Court, president of Consumer Watchdog, in a statement. “Edison and PG&E should solve it by stopping the fires.”

The three utilities have caused at least seven of California’s 20 most destructive fires, according to the California Department of Forestry and Fire Protection.

Assembly Speaker Robert Rivas (D-Hollister) told reporters Tuesday that the final proposal had “some half measures” and “Californians expect a lot more than half measures.”

He said that Newsom didn’t ask him to abandon the bill.

“We’re going to tackle this issue in the best interest of our state, of residents, but certainly wildfire victims that expect a lot more from us,” Rivas said.

Newsom’s office declined to say Tuesday whether the governor would call a special session this year to debate the issue.

“The reforms in this bill, while important, did not address the underlying structural problems driving this crisis, as the initial market reaction this week demonstrates,” Newsom said in a statement. “Simply put, this measure did not meet the gravity of this moment. The only solution is to return to fix the entire problem, not part of it.”

Assemblymember Cottie Petrie-Norris (D-Irvine) said that the Legislature plans to hold a series of hearings this fall on how to deal with wildfire costs.

She acknowledged the rushed process of the last-minute proposal.

“It should come as no surprise to anybody that sometimes when policies get written at 6 a.m. perhaps we can do better,” Petrie-Norris said.

Democratic state Sen. Ben Allen, who represents the Pacific Palisades fire zone, said that he would have voted for the bill if it had cleared the Assembly.

“This bill package had a lot of good in it,” Allen said, adding that he understands “why a lot of colleagues felt as though it didn’t go far enough.”

The three utilities had been lobbying Newsom and lawmakers to further shield them and their shareholders from wildfire liabilities ever since last year’s Eaton fire.

Government fire investigators said the fire, which killed 19 people and destroyed thousands of homes in Altadena, 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.

The chair of the California Senate’s utilities committee said Tuesday that he was “deeply troubled” by electric company executives’ recent threats to take action to protect their shareholders if they don’t get legislation in Sacramento to limit their wildfire liabilities.

In a letter to Southern California Edison and Pacific Gas & Electric, Sen. Benjamin Allen (D-Santa Monica) wrote that he was considering calling the utility executives to an oversight hearing to have them explain their plans.

Allen sent the letter after the Times reported that the two companies’ top executives promised their investors in recent conference calls that they planned to respond if they don’t get legislation for which they have been lobbying. Gov. Gavin Newsom and lawmakers are working behind closed doors on a package of wildfire bills.

“While I understand that utility investors seek predictability for their invested dollars, and stable utilities are important to the state of California, we as legislators must balance the additional interests of wildfire victims and survivors, our residents’ ability to access affordable insurance, and the need to ensure affordable utility service,” Allen wrote.

“We are certainly not interested in being threatened as we seek a balanced path that is right for California,” he added.

In response to the letter, PG&E and Edison said Tuesday night that The Times had “mischaracterized” their executives’ comments to investors.

“PG&E’s objectives remain unchanged: safely and reliably serve our customers, ensure wildfire victims are compensated quickly and fairly, and protect customer affordability,” PG&E said in a statement.

Edison declined to comment further.

Besides chairing the Senate’s Energy, Utilities and Communications Committee, Allen also is running in November’s election to be the state’s next insurance commissioner.

Newsom and lawmakers already passed legislation that cut the state’s three biggest electric companies’ liabilities for wildfires. Edison’s shareholders, for example, may pay little of the billions of dollars of damage from last year’s devastating Eaton fire — which killed 19 people and left thousands of families in Altadena homeless — under current laws championed by Newsom to protect the utilities from bankruptcy.

The utilities say more needs to be done. Among the recommendations in a report ordered by Newsom is limiting the amounts that victims can receive for pain and suffering and capping the fees of attorneys who represent them.

The commissioned report also suggested that utilities should no longer reimburse property insurers for damage from fires sparked by electrical equipment. Although this would reduce utilities’ liability for fires, insurers say it would increase premiums for homeowners.

“If the Legislature does not act, or if they act and don’t actually solve the problem, then we’re going to have to take action,” Patti Poppe, PG&E’s chief executive, said on a July 23 call with Wall Street analysts.

Poppe did not specify what her company would do, but made it clear that any action would protect shareholders’ money.

In earlier conversations with analysts, PG&E executives had “alluded to the possibility of opportunistic share repurchases should the legislative process fail to deliver a more durable wildfire liability framework,” according to a report by the bank Jeffries.

Such buybacks could raise the company’s stock price and benefit shareholders while reducing money available for the utility’s California programs.

Last month, Pedro Pizarro, chief executive of Edison International, told Wall Street analysts on a conference call that he too was prepared to make financial changes if the Legislature does not pass a comprehensive bill to cut the utilities’ financial wildfire risk before the legislative session ends Aug. 31.

Any legislation that passes without a protective framework for utilities, Pizarro said, would “influence how we prioritize and deploy future capital.”

Pizarro declined analysts’ requests to say where the company would cut back, but said the utility would continue spending aimed at keeping its grid safe and reliable.

“We’re going to evaluate the totality of the package that comes to us and figure out our response that goes along with it,” Pizarro said.

This month, state and county officials released their investigation into the Eaton fire, blaming the deadly inferno on Edison’s century-old transmission line that the company kept in place even though it hadn’t carried electricity since 1971.

Utilities have long known that idle lines could spark fires. In 2019, the Kincade fire in Sonoma County, which destroyed hundreds of homes, was ignited by an old, unused transmission line owned by PG&E.

At least seven of the 20 most destructive fires in California history have been sparked by the three biggest for-profit utilities.