Gavin Newsom is bailing out utility companies — and abandoning wildfire victims

Gavin Newsom is finishing the last two weeks of his last legislative session as governor by demanding a bailout for the state’s three for-profit utilities, which have given his campaigns and causes nearly $1 million during his term.  

The governor’s murky plan aims to limit the ability of wildfire victims, and their insurance companies, to recover damages from utility companies that start wildfires.

The plan claims to put “Wildfire Survivors First,” according to his fact sheet, but it is opposed by every legitimate wildfire survivor group. 

The utility companies back the governor’s plan and they are providing the funding for a phony coalition called “Wildfire Victims First” — insane doublespeak, given that the three utilities caused eight of the 20 worst wildfires in California history. 

The utilities refuse to talk publicly about the proposed “reforms,” letting Gov. Newsom and the “Wildfire Victims First” coalition do it for them — including through $3.5 million in television ads launching across California in the coming weeks.  

The spokesman for “Wildfire Victims First” is Nathan Click, Newsom’s former spokesman, and the TV ad maker is Bearstar, Newsom’s political consultant.  

The talking points of the ads — that insurance companies, hedge fund managers and attorneys are taking wildfire survivors’ money — are exactly the talking points from the governor’s “fact sheet.”

Real wildfire survivors, local governments, consumer groups and insurance companies all oppose the plan, because it would limit residents’ rights to recover damages for fires started by utilities.   

The definition of bailout is rescuing an entity from financial trouble. Newsom’s move is a textbook bailout in the last days of the legislative session, backed up by a silent threat to veto bills by legislative dissenters when there is little time for scrutiny of his proposals.

Utilities don’t need a bailout. When Newsom signed a law in 2019 to create a $21 billion wildfire fund to protect utilities, Pacific Gas & Electric (PG&E) was in bankruptcy. In 2025, the year Edison apparently caused the Eaton fire, which killed at least 19 people and shattered tens of thousands of lives, Edison reported $4.5 billion in profits (triple the year before), $1.4 billion in shareholder dividends and CEO compensation of $16.5 million.  

Protecting for-profit utilities from the costs of fires they cause through their negligence just guarantees more neglicence and more fires. After Newsom’s 2019 bailout, Edison didn’t have to worry about paying for fires its equipment started. A new government report just found the Eaton fire was sparked by an abandoned transmission line that Edison didn’t remove.

A coalition of insurers, local governments, fire survivors, attorneys and consumer groups has written to the state legislature to urge it to oppose Newsom’s proposal.

“Strong liability standards encourage utilities to invest in system hardening, vegetation management, grid modernization, and prudent operational practices,” the groups wrote. “Weakening accountability sends exactly the wrong signal by reducing the financial consequences when utility equipment causes catastrophic destruction.”

State Sen. Ben Allen, a Democrat who represents the area burned by the Palisades fire, recently raised concerns that utilitiy companies have reportedly taken to bailout blackmail.

The chief executives of PG&E and Edison both reportedly suggested on recent investors calls that if Newsom and the Legislature don’t bail them out, they will take steps to protect their own shareholders, intimating they would buy back stock rather than invest in infrastructure improvements. 

Allen, who represents fire-ravaged Pacific Palisades and the chair of the state Senate’s Energy Committee, Ben Allen, recently wrote the CEOs to question them. 

“To read that the state’s largest investor-owned utility companies might be threatening to harm service to Californians if they don’t get the outcomes they seek on liability reform in the Legislature does not bode well for a cooperative approach,” Allen wrote.

Shame on Gavin Newsom for backing up the utilities’ bailout blackmail. He should stand with Californians and real wildfire victims instead.

Jamie Court is the president of the nonprofit advocacy group Consumer Watchdog.

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