Los Angeles-area fire survivors, insurance industry representatives and consumer advocates are raising alarms over what they describe as a behind-the-scenes push by Gov. Gavin Newsom to shift wildfire liability costs away from California’s major utility companies — a move critics say could ultimately land on the backs of insurance policyholders instead.
The controversy centers on advertisements that have been circulating statewide, warning that “home insurance rates skyrocket” and that “the FAIR Plan is broken.” The ads encourage Californians to contact their state representatives and demand a fix to the state’s “wildfire problem.” But those behind the campaign, survivors say, aren’t telling the whole story.
With the Legislature set to reconvene next week for the final weeks of its session, Newsom’s office has confirmed it has been in talks with lawmakers about addressing wildfire recovery costs and the state’s growing catastrophic risk. However, no legislative language has been made public, and a spokesperson for the governor declined to confirm or deny specific details alleged by fire survivor groups and Consumer Watchdog, a nonprofit focused on insurance issues.
Those groups claim the still-unseen legislation could limit compensation for pain and suffering endured by fire victims, eliminate insurance companies’ ability to recover wildfire-related costs from utilities, and cap attorney fees — making it harder for survivors to find legal representation.
Every Fire Survivors Network, formed by people who lost homes in last year’s devastating Eaton Fire in Altadena, along with Consumer Watchdog and several insurance industry representatives, allege the proposal would effectively transfer financial responsibility from utility companies onto everyday insurance customers. They’re warning against what’s known in Sacramento as a “gut-and-amend” — a legislative maneuver in which lawmakers strip the content of an existing bill and replace it with new, often fast-tracked, provisions late in the session.
The suspected legislative package appears to align closely with the goals of Wildfire Survivors First, an advocacy campaign funded by utility companies. Despite the name, the campaign’s list of more than 200 supporting organizations does not include a single fire survivor group.
“Californians deserve a government that works in the open, not behind closed doors,” Joy Chen, a leader with Every Fire Survivors Network, said during a press conference last week. She called on Newsom to “choose democracy over corporate special interests.”
In an open letter to the governor, Chen outlined what she describes as a pattern of the state helping utilities offload wildfire responsibility over the years. California’s three largest utilities — Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric — wield enormous influence in Sacramento, operating under a web of affiliated entities and employing hundreds of lobbyists. According to CalMatters’ Digital Democracy Database, the utilities have donated more than $1.2 million to sitting lawmakers so far in the 2025-26 legislative session.
Newsom spokesperson Anthony Martinez said discussions between the governor’s office and lawmakers stem from an April report by the California Earthquake Authority, produced under Senate Bill 254, which examined how California should distribute the financial burden of natural disasters.
That same bill — rewritten so hastily last year that lawmakers had to extend the legislative session to pass it — already allows utilities to pass additional wildfire costs onto ratepayers if expenses exceed the state’s $21 billion wildfire fund, created in 2019 with Newsom’s backing. Utilities and ratepayers each covered half of that fund. Survivors of the Eaton Fire have since sued Edison, alleging negligence contributed to the blaze, and experts say the resulting claims could exceed what remains in the fund.
Among the April report’s recommendations: raising the monthly surcharge utility customers pay into the wildfire fund from $2.50 to $11.
Nathan Click, a spokesperson for Wildfire Survivors First, said the campaign supports quickly implementing many of the report’s findings, arguing that “payouts to financial middlemen — like trial attorneys, hedge funds and insurance companies — are often paid out before wildfire victims receive a single dollar for rebuilding.”
Click did not respond when asked why no fire survivor organizations appear among the campaign’s more than 200 supporters, a list dominated largely by chambers of commerce and business associations. CalMatters reached out to nearly a dozen of those groups; most did not respond or declined interview requests.
One organization that did speak out, After the Fire — a national nonprofit supporting communities recovering from major wildfires — said it asked to be removed from the coalition’s list once it learned no survivor groups were involved.
“I’m from Sonoma. I’m a national advocate for fire victims. I’m definitely not on their side,” said Jennifer Gray Thompson, the group’s chief executive. She said former state Sen. Bill Dodd had personally reached out asking her organization to back the campaign. Dodd did not respond to requests for comment.
The Bay Area Council, which counts PG&E among its members, defended its involvement, saying it supports “sensible policies and investments that reduce wildfire risk and increase community wildfire resilience” while balancing the needs of businesses, consumers and residents.
A Consumer Watchdog review of required financial disclosures found that about 66% of the nongovernmental groups listed as campaign supporters have received utility-funded contributions, grants or sponsorships totaling roughly $7.3 million between 2023 and 2025. Click dismissed Consumer Watchdog as “a shadow lobby firm for trial attorneys,” adding that the group’s criticism was unsurprising given what he called its interest in protecting attorney payouts over victims.
Representatives for PG&E, Edison and SDG&E each directed inquiries to the Wildfire Survivors First campaign.
State Sen. Ben Allen, a Los Angeles-area Democrat whose district includes Palisades Fire survivors, attended Friday’s press conference and said any solution must hold “responsible parties accountable.” Allen, who chairs the Senate’s energy and utilities committee and is running for state insurance commissioner, was unavailable for a detailed interview but issued a statement saying he would carefully scrutinize any proposal to ensure costs aren’t simply shifted among consumers without addressing the underlying problem.
State Sen. Sasha Renée Pérez, who represents Eaton Fire survivors in Altadena, said she would strongly oppose any effort to cap non-economic damages for victims. “I have a friend who lost his sister in the fire. How do you put a price tag on losing your sibling?” she said. Pérez added that she remains frustrated by how SB 254 was transformed in the final days of last year’s session from a bill meant to curb utility profits into one that instead benefited them. “That’s not the way government should work,” she said.
Several other legislative offices — including those of Assembly Speaker Robert Rivas, Assemblymember Lisa Calderon, who chairs the insurance committee, and Assemblymember Cottie Petrie-Norris, who leads the utilities and energy committee — did not respond to requests for comment. Spokespeople for Senate President Pro Tem Monique Limón and Sen. Josh Becker sent statements echoing Newsom’s office, saying the current system “is unsustainable and not working for fire survivors, utility customers, or insurance policyholders.”
Insurance industry representatives, meanwhile, argue that stripping their ability to recover wildfire costs from utilities — a practice known as subrogation — would inevitably drive up premiums for everyday Californians.
“We don’t think it’s fair to make insurance policyholders pay more to bail out utility shareholders,” said Denni Ritter, a vice president with the American Property Casualty Insurance Association. She also disputed claims that insurers typically wait to recover funds from utilities before paying policyholders, saying, “It’s not like AAA goes, ‘OK, we’ll pay you once we’ve recovered from the utilities.’”
Rex Frazier, president of the Personal Insurance Federation of California, which represents many of the state’s largest insurers, said this is not the first time utilities have sought to reduce their wildfire liability — but said that in the past, such efforts involved direct dialogue with insurers. This time, he said, that communication has been absent.
“We’re trying to understand why they’re talking about the insurance market,” Frazier said. “We can’t get a clear answer about what they have in mind.”
Original source: CalMatters
