Under permanent protections that California's largest utilities want lawmakers to approve, finding that a utility acted imprudently during a wildfire would not expose its shareholders to the full cost of the catastrophe.
Covering costs beyond those shareholder limits could mean higher electricity bills for households, according to the Los Angeles Times.
Here's what to know
Under legislation proposed by San Diego Gas & Electric, Southern California Edison, and PG&E, one-fifth of each company's transmission and distribution equity rate base would become the maximum shareholders must pay.
Electric bills would recoup fire costs exceeding the shareholder caps.
Based on reported figures, those limits would be $1.5 billion at SDG&E, $4.3 billion at Edison, and $5.1 billion at PG&E.
Making the shareholder cap permanent would eliminate its current expiration trigger: exhaustion of both California's $21 billion wildfire fund and an additional $18 billion reserve.
Consumer Watchdog President Jamie Court argued that the proposed protections would weaken incentives to prevent fires. The utilities made a financial case for the limits, claiming that they would protect their credit ratings and lower borrowing costs passed on to customers.
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More background
Thousands of families were left homeless after the January 2025 Eaton fire.
The utilities' push for financial protections followed that disaster.
Government investigation findings released in August concluded that the fire started when electricity briefly returned to an Edison transmission line that had been idle since 1971, sending sparks into dry brush during high winds, the Los Angeles Times reported.
Pedro Pizarro, chief executive of Edison's parent company, Edison International, has defended the utility's conduct as prudent and rejected allegations of criminal wrongdoing.
Edison has disclosed that its actions before the fire are under criminal investigation.
A $2 billion spending deferral at PG&E prompted notices to thousands of customers about possible project delays, while executives there and at Edison warned that reduced investment could affect connections for new housing and clean energy projects.
What's being done?
The threatened investment cuts drew a challenge addressed to the California Public Utilities Commission.
It came in a letter from state Sen. Sasha Renée Pérez, whose district includes Altadena.
To argue against pressure for weaker wildfire accountability, Pérez cited shareholder dividends and profits at the utilities' parent companies.
A special legislative session is the utilities' next requested route to addressing wildfire financial risks, including limits on shareholder liability. They are asking Gov. Gavin Newsom to convene it after an earlier bill failed without an Assembly vote.
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Court warned that absolving utilities of wildfire-related liability could put Californians at risk.
"If ratepayers are forced to pay the lion's share for fires utilities cause, there is no imperative for the for-profit utilities to take safety and fire mitigation seriously," he observed.
Where can I learn more?
California's fight over wildfire costs affects both survivors seeking compensation and households facing surging electric bills. These stories cover PG&E payouts, survivors' demands for prevention, stalled wildfire legislation, and utility-proposed rate increases.
• In California, Gov. Gavin Newsom signed a path to full payouts for PG&E wildfire survivors who were left $5 billion short.
• California wildfire survivors urged leaders to prevent utility-caused fires, not just debate who pays in the aftermath.
• In California, Edison customers could pay hundreds of millions more after wildfire legislation stalled.
• Across the United States, utilities sought $31 billion in hikes as electricity bills became an election flashpoint.
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