Common sense has prevailed in Sacramento, as Gavin Newsom has backed down from an effort to cap damages for wildfire victims — and to protect utility companies, who are among his donors.
As The California Post reported, Gov. Newsom’s plan would have helped utility companies avoid having to pay large sums to wildfire victims and their insurance companies to compensate them for blazes started by their aging infrastructure.
It was the governor’s latest attempt to protect the big utilities, after he signed AB 1054 in 2019, creating a $21 billion Wildfire Fund to pay damages when fires were caused by utility companies.
To be fair to Newsom, there is arguably a public purpose in all of this, which is to keep the utility companies in business, and avoid major rate increases for electricity.
But critics have also noted Newsom’s long, cozy relationship with the utility companies. And the state has been notoriously sluggish in doing its part to prevent and fight wildfires — such as clearing brush, and making more water storage available.
Moreover, Newsom’s plan would have passed the costs of wildfires to insurance companies and customers — meaning that home insurance rates, which are already climbing sky-high, would have risen even further.
Supporters of Newsom’s plan claimed that the current system benefits lawyers, who make money from wildfire-related lawsuits.
But that was hard to take seriously as a real concern, given that Sacramento has often bowed to the trial bar, allowing lawyers free rein.
Newsom’s plan met unusual opposition from the legislature. And for once, insurance companies and homeowners were on the same side of an issue.
In the end, the governor did the right thing, and backed down. Perhaps he didn’t want to head into a presidential primary with the burden of being known as the governor who hurt wildfire victims.
The resulting compromise is SB 492, which Newsom is likely to sign when it passes.
Critics say there are still several weaknesses in the bill. Attorney Trey Robertson — who is representing Palisades Fire victims — says that SB 492 exempts key agencies from public records laws, which means decisions about the Wildfire Fund could be made behind closed doors.
Moreover, the state still has to deal with the problem that wildfire costs pose for utilities, and their customers.
But for once, the system worked in Sacramento. A governor proposed a bad bill; there was strong opposition; and a better compromise emerged.
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