PG&E closed up 6%, the most in more than a year, after a 20% drop on Monday. Edison closed up 8.9%, the most since March 2020, following Monday’s 23% plunge.
“The proposal before us does not yet deliver the relief, accountability or meaningful reform that Californians deserve,” Assembly Speaker Robert Rivas said in a statement. “So, we are going back to work — and we will not stop until we have done everything in our power to deliver real results.”
The legislative uncertainty spurred new questions about whether Newsom would call lawmakers back into a special session, a possibility he didn’t rule out when asked by reporters on Monday. Assemblymembers said they would call hearings on the issue this fall.
“Senate Bill 492 fails to provide a durable, long-term solution for compensating wildfire victims, sustaining the Wildfire Fund, and managing the financial risk created by California’s wildfire liability framework,” the chief executive officers of PG&E and Edison wrote in a joint letter to lawmakers Monday.
The legislation would have omitted several provisions that Newsom and electric utilities sought, including a prohibition on insurance companies suing power companies that have caused wildfires as a way to recoup payments to policyholders.
Newsom had tried to raise the standards for certain lawsuits over emotional and non-economic damages, and cap some claims against utilities. He also pushed to bar insurance firms from suing to recoup what they’d already paid out to policyholders for wildfire damages.
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Insurers warned that such a move would likely lead to higher rates for homeowners and businesses in a state where coverage has already grown pricier and harder to find over the last several years.
Lawmakers backed several provisions Newsom supported, such as a ban on bonuses for the CEOs of utility companies that cause certain wildfires but also handed some help to utilities by supporting a measure that would have barred insurers from selling their claims against electric companies to private investors such as hedge funds. Fees for attorneys handling such cases would have been subject to new caps.
The legislation would have created a new program aimed at speeding up payments to survivors of wildfires caused by utilities. The measure also would have shored up a state fund created by the California legislature to help cover wildfire claims involving participating utilities’ equipment.
The prospective bill fueled downgrades on Wall Street and a deep selloff on Monday, with bond spreads for the two companies widening. PG&E serves 16 million people across northern and central California, while Edison’s Southern California utility serves about 15 million people.
