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 or not 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.
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