California lawmakers' last-minute deal on compensation for wildfire victims falls apart

After deciding not to vote Tuesday, Assembly Speaker Robert Rivas said lawmakers would revisit the issue this fall.

“The proposal before us does not yet deliver the relief, accountability or meaningful reform that Californians deserve,” the Democrat said in a statement. “So, we are going back to work — and we will not stop until we have done everything in our power to deliver real results.”

Newsom's plan would have reduced the amount utilities had to pay some victims and barred insurance companies from suing electrical companies to get reimbursed for damages paid out to homeowners. One of the goals was to stabilize the state’s notoriously high electricity rates by protecting utilities from the full financial impacts of wildfires.

The governor said the last-minute compromise he made with lawmakers would have had some benefits for wildfire victims, but that it failed to make necessary, sweeping changes to tackle the question of who covers the cost of fires ignited by utility equipment.

“We need comprehensive structural reform to protect the state from catastrophic fires, prioritize wildfire survivors, hold utility executives accountable, and provide reliable, affordable power to all Californians,” Newsom said in a statement.

Monique Limón, the president pro tempore of the state Senate, said she was disappointed that the deal wasn't passed Tuesday.

“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 Democrat said in a statement.

Who pays for wildfires is a contentious issue

The question of who should cover the cost of utility-sparked fires has persisted throughout Newsom’s tenure, which began after the most destructive wildfire in state history. He signed a law in 2019 — his first year in office — that created a $21 billion fund, paid for by utility shareholders and ratepayers, to help utilities pay for wildfire damages if they take certain safety measures. He and lawmakers agreed last year to supplement the pot of money with another $18 billion fund.

Newsom's failure to get his full plan this year passed by the end of the session marked a rare loss for the governor, who has often found support for his policy wishes in the Democratic-led Legislature. It comes as he wraps his final session before leaving office in January.

Joy Chen, executive director of Every Fire Survivor’s Network, a group of victims of the 2025 Los Angeles-area fires, said the deal that fell apart Tuesday would have been “a first step” to addressing wildfire prevention and holding utilities accountable when their equipment ignites a fire. It was much better for victims than Newsom's original proposal, she said.

Pacific Gas & Electric, which filed for bankruptcy in 2019 after it faced claims from a devastating Northern California blaze started by the utility's equipment, and Edison International, Southern California Edison's parent company, were disappointed with the deal. They said in a letter to lawmakers that the bill would have failed to stabilize rates for Californians and wouldn't provide “durable, long-term solutions” for compensating victims, sustaining the state's wildfire fund, or managing utilities' financial risk.

Legislature passes the nation's first smoke contamination testing standards

Lawmakers also passed a bill Monday that would create the nation’s first standards for testing and cleaning up lead, asbestos and other toxic contaminants inside homes after a wildfire.

Assemblymember John Harabedian, a Democrat who wrote the bill, said it was born out of the deadly 2025 Eaton Fire that swept through Altadena, which he represents. He said it’s important for lawmakers to “figure out very quickly how to protect wildfire survivors and rebuild communities,” and the bill is one way to do that.

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Associated Press reporter Dorany Pineda in Los Angeles contributed to this report.