Bel Air, Beverly Hills and Holmby Hills canyon residents who live in some of California's highest-risk fire zones could see their legal recourse against utilities curtailed under legislation being fast-tracked in Sacramento before the session ends Aug. 31.

California's two largest utilities are pressuring state lawmakers to cap their wildfire liabilities. Edison International CEO Pedro Pizarro told Wall Street analysts on a July 30 call that without a comprehensive bill cutting utilities' financial wildfire risk, any legislation that passes would "influence how we prioritize and deploy future capital." He warned Edison's credit rating could be downgraded, raising electric bills for customers.

PG&E CEO Patti Poppe was more direct on a July 23 call with analysts, saying her company would take shareholder-protective actions, including potentially buying back shares, if lawmakers fail to act.

The pressure campaign comes as the LA County Fire Department and Cal Fire confirmed on Aug. 4 that the January 2025 Eaton Fire was caused by electrical arcing on an out-of-service Southern California Edison transmission tower that had not carried power since 1971. That fire killed 19 people and destroyed or damaged more than 9,000 homes and businesses. Edison disputes negligence and has filed counter-lawsuits claiming LA County agencies failed to send timely evacuation warnings and that water agencies did not provide sufficient water to firefighters.

As we reported Aug. 4, the finding carries direct implications for canyon neighborhoods here. Bel Air Estates is explicitly listed in the city's Very High Fire Hazard Severity Zone, a designation tracing back to the 1961 Bel Air Fire that destroyed 484 homes. Beverly Hills has 11 distribution circuits in a Tier 2 High Fire Threat District, all served by Edison, running through the Santa Monica foothills, according to the city's January 2024 Electrical Resilience Action Plan.

What the legislation could change

The proposals under discussion in Sacramento, based on an April 2026 California Earthquake Authority study, would cap attorneys' fees for wildfire victims, reduce payments for non-economic damages like pain and suffering and eliminate utilities' obligation to reimburse property insurers for fire losses. No bill text has been publicly released.

Insurers warn the changes would raise homeowner premiums. "We don't think it's fair to make insurance policyholders pay more to bail out utility shareholders," Denni Ritter, vice president at the American Property Casualty Insurance Association, told CalMatters in July.

The proposals would also raise the monthly surcharge on utility customers for the state's $21 billion wildfire fund by $8.50, bringing the total to $11 per month.

Record profits, record lobbying

Edison's profits jumped more than 200% in 2025, rising from $1.3 billion to $4.5 billion despite billions in Eaton Fire damages, the Los Angeles Times reported. CEO Pizarro received $16.6 million in total compensation, up 20% from 2024.

The three largest investor-owned utilities have spent a combined $16.7 million lobbying Sacramento through the first six quarters of the 2025–2026 legislative session, according to Consumer Watchdog. That is the most expensive utility lobbying campaign in state history.

Edison has paid more than $1 billion to Eaton Fire victims through a voluntary compensation program that requires victims to give up their right to sue. State documents also show the utility charged customers for hundreds of millions of dollars of maintenance on aging transmission lines that regulators approved but Edison never performed in the four years before the fire.

What happens next

Gov. Newsom's office briefed Assembly Democrats on Aug. 4 on wildfire liability priorities, according to Politico. Assemblymember Gregg Hart said afterward: "It's asking people to do hard stuff really fast with a lot of trust, and there's probably not a lot of trust."

State Sen. Sasha Renee Perez, who represents Eaton Fire survivors in Altadena, has said she will oppose any proposal limiting non-economic damages.

The legislature has until Monday, Aug. 31 to act. No committee hearing dates or bill numbers have been announced. Residents who want to weigh in can contact their state legislators through leginfo.legislature.ca.gov.