This plan from Governor Newsom to shift cost for utility-started wildfires onto insurers is a terrible idea. It gives utilities a get-out-of-liability-free card when they negligently start wildfires, removing their biggest incentive for cleaning up their act. Instead, insurance companies and homeowners will be left to clean up the destruction the utility companies cause.
Utility-caused fires are largely preventable through better line maintenance, but the utilities don't want to spend the money if it can be turned into returns for shareholders instead. Properly assigning liability when that kind of short-sighted thinking causes massively destructive wildfires is apparently the only thing that is capable of getting the utility companies' attention.
I can kind of understand the justification. There are real worries about what would happen to customers if liability from something like the #EatonFire drove one of the big utilities bankrupt. Meanwhile, the increased insurance rates would mostly hit homeowners in fire-prone areas, where they might encourage more fire-resistant construction and landscaping. It kind of makes sense if you don't think about it too hard.
But fires are still a worry even without negligent utilities, so skyrocketing insurance rates are going to push homeowners in the right direction anyway. Meanwhile, utilities are responsible for starting a large fraction of the most devastating wildfires in California history, and indemnifying them just rewards them for failing to maintain their infrastructure.
Full disclosure: I am not an unbiased observer. I live near the foothills, and my insurance rates tripled in 2024 because of fire risk. I had to evacuate because of the #EatonFire, as did many of my friends and coworkers. I know plenty of people whose homes were destroyed. I have followed the investigation into the fire closely.