Senate Energy Chair Calls Out Utility CEOs Over Bailout Blackmail Threats; Local Governments, Insurers, Fire Survivors & Consumer Groups Rally Against Bailout, Says Consumer Watchdog

SACRAMENTO, Calif., Aug. 12, 2026 /PRNewswire/ -- A coalition of governmental entities, wildfire survivors, insurance companies, attorneys and consumer groups sent a joint letter to the legislature vowing to oppose any proposal that "would shift billions of dollars in costs away from utility shareholders and onto insurance policyholders, cities, counties, taxpayers, and wildfire victims."

The groups wrote with concerns that an 11th hour proposal backed by Governor Newsom would "undermine one of California's most important incentives for utility safety."

"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."

Meanwhile the Chair of the Senate Energy Committee Ben Allen (D – Santa Monica) has written the CEOs of PG&E and Edison to call out the executives for "threats" made on recent shareholder calls, as reported by the Los Angeles Times.

The CEOs threatened that if they didn't get a bailout in the legislature they would engage in tactics to protect shareholders, such as buying back stock with available cash to prevent the money from being used to improve infrastructure. Allen said he is contemplating having the CEOs appear at hearings to explain themselves.

"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 to PG&E CEO Patti Poppe and Edison CEO Pedro Pizarro.

"Moreover, if true, I am astounded by the audacity of such threats by your companies and cannot help but notice the unfortunate timing coinciding with the release of the Eaton Fire investigation report which confirmed the long-speculated theory that SCE's out-of-service transmission line ignited the deadly fire that destroyed most of Altadena, killed 19 residents, and has left a community completely displaced. All of this comes amidst reports of soaring utility profits and raises and massive bonuses for certain executives.

"While I understand that utility investors seek predictability for their invested dollars, and stable utilities are important to the state of California, we as legislators must balance the additional interests of wildfire victims and survivors, our residents' ability to access affordable insurance, and the need to ensure affordable utility service. We are certainly not interested in being threatened as we seek a balanced path that is right for California."

"Utilities should not be allowed to blackmail the legislature into an eleventh hour bailout that places the burdens for the fires they cause on the backs of wildfire survivors, insurance policyholders and the taxpayers that make up local governments," said Jamie Court, president of Consumer Watchdog. "It's astounding that the governor of the state of California would side with utilities that caused at least 7 of the state's 20 most deadly fires and are now threatening not to protect us if we don't give them the liability bailout they seek. This bailout blackmail needs to stop and Governor Newsom needs to speak out against it.

The groups signing the letter to the legislature are the American Property Casualty Insurance Association, CSAC, Every Fire Survivor's Network, Rural County Representatives of California, Extreme Weather Survivors Action Fund, League of California Cities, Consumer Attorneys of California, Personal Insurance Federation of California, Consumer Watchdog and PADIC.

SOURCE Consumer Watchdog