Newsom returns to a defining California fight: Who pays for wildfire damage?

California Governor Gavin Newsom is grappling with a long-standing issue during the final stretch of his eight-year tenure: determining who should shoulder the financial burden of wildfire damage caused by utility equipment. The most recent and devastating incident occurred in 2024, when a fire sparked by Pacific Gas & Electric equipment killed 85 people and destroyed over 18,000 buildings in Northern California.

In response, Newsom signed legislation in 2025 that established a $21 billion fund, funded by utility shareholders and ratepayers, to assist utilities in paying for wildfire damages if they implement specific safety measures.

As the legislative session concludes, Newsom is attempting to negotiate a deal with lawmakers to further insulate utilities from financial hardship should their equipment ignite a wildfire. The initiative aims to lessen the financial strain on victims and attorneys. One of the primary aims is to stabilize California's already high electricity rates, which have been steadily increasing due to the rising frequency and intensity of wildfires exacerbated by climate change. Six of the state's ten most destructive wildfires have been attributed to utility equipment.

Newsom emphasizes the urgency of the matter, warning that the wildfire fund may run out soon. He argues that the current status quo is unsustainable, as victims consistently find themselves at the bottom of the priority list. However, some victims are objecting, contending that Newsom's plan favors utilities over the needs of fire survivors. Insurance companies also express concerns that they would bear a larger share of property damage costs.

The plan, supported by major utilities including PG&E, Southern California Edison, and San Diego Gas & Electric, is facing opposition from certain fire survivors. The final legislative battle may significantly influence Newsom's legacy as he contemplates a presidential bid in 2028.