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Gavin Newsom reaches compromise on wildfire liability rules to protect survivors and stabilize electricity rates

Governor Gavin Newsom reached an eleventh-hour deal with legislative leaders to reform wildfire liability rules in California. The agreement aims to lower electricity rates and improve payouts for wildfire survivors by limiting the role of hedge funds and private equity firms in extracting payouts from utilities. It also restricts utility executives from receiving bonuses when their equipment sparks a fire. While the deal fell short of Newsom's original goal to eliminate subrogation—the process where insurance companies recoup losses from utilities—lawmakers blocked provisions that would have limited the total amount of money survivors could recover. Instead, the legislation establishes a 'Fast Pay' program to accelerate victim payouts and caps attorney fees in insurance subrogation cases. The compromise reflects a balance between utility accountability and the needs of the insurance industry. By preserving survivors' rights to seek full damages, the administration's plan ensures that power companies remain incentivized to invest in grid safety. The legislation is set for a final vote in the Assembly and Senate as the legislative session concludes.

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