One might think that with Democrats holding nearly every position of power in Sacramento, the party would have an easy time hashing out solutions to California’s thorniest policy problems.
Think again.
Without a strong political opposition forcing them to close ranks, Democrats routinely splinter along lines of ideology, region, gender, ethnicity and — perhaps most consistently — competing economic interests.
At its core, the state Capitol still functions much like a marketplace, where various interest groups haggle over legislation that affects their bottom lines. That’s essentially how the late journalist Carey McWilliams characterized it back in 1949 in his book “California: The Great Exception.”
Since then, California has transformed dramatically — its population has exploded, its economy has been reshaped, and its politics have flipped from Republican control to Democratic dominance. Yet McWilliams’ observation still rings true, even as the players and interests jockeying for influence have changed.
The clearest recent example is the fight that consumed the final stretch of this year’s legislative session, ending in gridlock: the enormously costly question of who should pay when wildfires — now a grim constant in California life — cause destruction.
Many of the state’s most devastating fires have been traced back to power lines that fail during windstorms, including one of last year’s major blazes in Los Angeles County.
The investor-owned utilities that operate those lines — companies like Pacific Gas and Electric and Southern California Edison — have generally accepted some degree of financial responsibility for fire damage. But because they operate as state-regulated monopolies, determining exactly how much they should pay gets complicated.
These utilities provide an essential service, and state regulators are tasked with keeping them financially healthy enough to secure the capital and loans needed to keep the lights on.
That means payouts to wildfire victims can’t be so large that they threaten a utility’s financial footing — which, in practice, means ratepayers end up absorbing part of the cost, pushing already sky-high electricity bills even higher.
This debate has simmered in the Capitol for years. Gov. Gavin Newsom, now in his final year in office and widely seen as eyeing a potential presidential run, decided it was time to settle the matter once and for all.
As lawmakers were racing toward the end of the legislative session, Newsom put forward a plan that would cap utility liability for wildfire damage — a move that would shore up the companies’ finances but shift more of the burden onto fire victims and their insurers.
Predictably, the proposal drew swift backlash from victims’ advocates and insurance companies, reigniting another simmering crisis: the growing reluctance of insurers to write policies in California’s increasingly fire-prone landscape. Like utilities, insurers operate under state oversight, and regulators face similar pressure to keep the industry profitable enough to stay in the state.
Insurance companies and wildfire survivor groups mounted an aggressive campaign urging lawmakers to reject Newsom’s plan, framing it as a handout to utility companies. Facing mounting opposition, the governor ultimately backed off.
State Senate leaders then crafted a compromise that Newsom appeared to accept, albeit without much enthusiasm. But utility executives — joined by their labor unions — blasted the new deal, arguing it would weaken their companies’ financial stability. They pointed to a sharp drop in utility stock prices after Newsom’s original proposal collapsed as proof of the risk.
In the end, no agreement could be reached, and lawmakers wrapped up the session Tuesday without resolving the issue.
Newsom told reporters he isn’t ready to give up and left open the possibility of calling a special legislative session to revisit the matter.
But without buy-in from all sides, such a move would likely accomplish little.
Newsom will remain in office through the rest of the year, and lawmakers — including newly elected members from November’s races — will reconvene in December. By then, though, he’ll be operating as a lame duck, with a successor, most likely Xavier Becerra, already chosen to take his place.
Wildfire liability remains one of California’s most tangled political puzzles — a Gordian knot born from the state’s singular complexity. And as this latest standoff shows, one-party rule hasn’t made it any easier to untie.
Original source: CalMatters
