California lawmakers set to vote on scaled-back wildfire bill after Newsom's utility plan stalls

California lawmakers are scheduled to vote Tuesday on a wildfire relief bill, following the collapse of a more ambitious proposal from Governor Gavin Newsom that sought to cap the financial liability of utility companies for equipment-sparked blazes.

The governor, a Democrat, acknowledged the compromise offers some advantages, such as expedited payments to survivors, but conceded it falls short of the structural changes he had sought. His original plan, which failed to secure enough support in the final days of the legislative session, would have reduced the amount utilities owe some victims and barred insurance companies from suing electrical firms for reimbursement.

Newsom defended the deal, telling reporters he could have walked away but that would have been a disservice to the state. The setback marks a rare legislative defeat for the governor, who is in his final session before leaving office in January.

Fire survivors had vocally opposed the original proposal, staging protests outside the governor's mansion. They argued it prioritized utility interests over victims, while insurers warned that shifting costs onto them would force premium hikes. Joy Chen of the Every Fire Survivor's Network called the compromise a win, saying lawmakers listened to those whose lives were devastated.

The approved bill, which requires a two-thirds majority due to an urgency clause, creates a program to speed up claim resolutions, bans hedge funds from profiting off wildfire claims, and withholds bonuses from utility executives if their equipment damages more than 500 buildings. The California Catastrophe Response Council will appoint an administrator to manage the faster claims process.

Pacific Gas & Electric, which filed for bankruptcy in 2019 over wildfire liabilities, expressed disappointment, arguing the bill fails to stabilize rates or provide long-term solutions. Assemblymember Rick Zbur called the outcome a disaster, saying lawmakers are only "nibbling around the edges" of structural issues. Environmental groups also voiced tepid support, with one representative saying the bill is merely "fine."

The debate stems from a 2019 law that created a $21 billion fund, supplemented last year with an additional $18 billion, to help utilities cover wildfire damages. The issue has gained urgency as Southern California Edison faces claims from a 2025 fire that killed 19 people.