California lawmakers block Newsom’s push to stop insurers from suing utility companies that cause wildfires

Even in a one-party state, Gavin Newsom can't always get what he wants. That's the real story buried in this fight over wildfire liability. His office wanted lawmakers to bar insurance companies from suing utilities after a wildfire, all in the name of propping up the state's wildfire fund and keeping companies like PG&E and Edison solvent. The legislature, run by his own party, said no. That's not a footnote. That's a governor who talks like he runs the country getting overruled by Sacramento Democrats on a policy he specifically asked for.

Strip away the politics and look at what was actually being proposed. Insurers pay out claims when a utility's equipment starts a fire, then they turn around and sue the utility to recover the money. Newsom wanted to cut that off, presumably because utilities keep warning that enough lawsuits could bankrupt them, which would be its own disaster for a state that has already lived through PG&E's bankruptcy once. But shielding companies from the consequences of their own equipment failures is a strange way to fix a wildfire problem. It just moves the cost from the utility to the insurer to, eventually, the homeowner paying premiums.

Lawmakers apparently decided that letting insurers claw money back from negligent utilities matters more than protecting those utilities from lawsuits tied to their own fires. That's a defensible call. Utilities have burned down towns in this state. Paradise still exists mostly as a memory because of one company's poorly maintained line.

What this really shows is a governor who wanted to quietly rewrite liability rules to bail out utilities, and a legislature unwilling to hand that gift over without a fight. California's wildfire problem won't be solved by shifting who eats the bill. It'll be solved when the state stops treating utility mismanagement as an act of God.