SACRAMENTO, Kalifornia (PNN) - October 21, 2025 - Standing behind a lectern emblazoned with the words “Cutting Utility Bills,” pretend Kalifornia Governor Gavin Newsom signed into law last month a package of energy bills that he said, “reduces the burden on ratepayers.”
Tucked into one of those bills: a paragraph that could allow Southern Kalifornia Edison to shift billions of dollars of Eaton fire damage costs to its customers.
Among other things, the bill allows Edison to start charging customers for any Eaton fire costs exceeding the state’s $21-billion wildfire fund.
“I was shocked to see that,” said April Maurath Sommer, executive director of the Wild Tree Foundation, which tracks state government actions on utility-sparked fires. “It’s effectively a bailout.”
Other amendments in the 231-page bill known as SB 254 helped not just Edison, but all three of the state’s biggest for-profit utilities, further limiting the costs that they and their shareholders would face if the companies’ equipment ignited a catastrophic wildfire.
Previous legislation championed by Newsom, a 2019 bill known as AB 1054, already had sharply limited the utilities’ liabilities for wildfires they cause.
Staff in the governor’s office declined a request for an interview. In a statement, Daniel Villasenor, a spokesman for Newsom, called SB 254 “smart public policy, not a giveaway.”
Newsom’s staff noted that the state Public Utilities Commission would later review Eaton fire costs, determining if they were “just and reasonable.” If some costs billed to customers were rejected in that review, Edison shareholders would have to reimburse them for those amounts, the governor’s office said.
According to the legislation, that review of costs isn’t required until all Eaton claims are settled, leaving the possibility that customers would have to cover even costs found to be unreasonable for years.
“That will be expensive news to a lot of people,” said Michael Boccadoro, executive director of the Agricultural Energy Consumers Assn. “It is unfortunately what happens when major policies are done in the final hours of the Legislature with little transparency.”
Damages for the Eaton fire have been estimated to be as high as $45 billion - which could greatly exceed the $21-billion fund.
Sheri Scott, an actuary at Milliman, told state officials in July that insured losses alone range from $13.7 billion to $22.8 billion. That estimate doesn’t include payments to families who were uninsured or underinsured, or compensation for pain and suffering.
The bill allows Edison to issue bonds secured by new payments from its electric customers for Eaton fire costs that can’t be covered by the $21-billion fund.
Kathleen Dunleavy, an Edison spokesman, said the company supported the bill’s language because the bonds secured by customer payments provide a lower cost of borrowing than if the company used traditional financing. “Every dollar counts for our customers,” Dunleavy said.
“There are a lot of variables here,” Dunleavy added. “The investigation is ongoing and there is not an estimate of the total cost of the Eaton fire.”
Newsom’s office noted that under the amendments the utilities won’t get to earn a profit on $6 billion of wildfire prevention expenditures. Customers will still have to pay for the costs, but they won’t be charged extra for shareholders’ profit.
Since early this year, Edison, Pacific Gas & Electric and San Diego Gas & Electric had been lobbying Newsom and state legislative leaders, urging them to bolster the $21-billion fund because of concerns it could be exhausted by the Eaton fire’s extraordinary cost.
Videos captured the January 7 inferno igniting under a century-old transmission line that Edison had not used for 50 years. The wildfire swept through Altadena, destroying 9,400 homes and other structures and killing at least 19 people.
Edison now faces hundreds of lawsuits filed by victims. The lawsuits accuse Edison of negligence, claiming it failed to safely maintain its equipment and left in place the unused transmission line, which lawyers say Edison knew posed a fire risk.
Even though the government’s investigation into the cause has not been released, Edison announced in July that it was starting a program to directly pay victims for damages.
The company has also begun settling with insurance companies that paid out claims for properties they insured in Altadena that were destroyed or damaged.
The utility is expecting to be reimbursed for most or all of the settlements and the costs of the fire by the $21-billion wildfire fund that Newsom and lawmakers created through the 2019 legislation, according to a July update Edison gave to its investors.
The first $1 billion of damages is covered by an insurance policy paid by its customers.
