CPUC Releases Report on Wildfire Liability and Cost Recommendations  

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By
Jordan Wells, Caitlin Loventhal
Date Published
February 12, 2026

On January 30th, the California Public Utilities Commission (CPUC) released a report, Senate Bill 254 Information and Recommendations, in response to Governor Newsom’s Executive Order N-34-25. The Executive Order requires the Office of Energy Infrastructure Safety (OEIS), and requests CA Department of Insurance (CDI) and CPUC, to provide the California Earthquake Authority (CEA) with options and recommendations on alternative structures to socialize risk of damage from natural catastrophes. The CPUC is the state regulator for the private sector companies that provide utility services to the public, including electricity. The CPUC recommends:  

  1. Reforms to equitably socialize the burdens from wildfires.  To address this issue, the CPUC recommends exploring options to expand or modify the pool of contributors to a wildfire fund, which could potentially include local governments. The CPUC also identifies potential changes to utility wildfire liability standards, including modifications to the inverse condemnation strict liability framework and/or the capping or limitation of utility tort liability. 
  1. Reforms to better allocate responsibility for wildfire mitigation between utilities and other actors. The report asserts that the current approach does not cost-effectively mitigate wildfire risk.  
  1. Consider other sources of funding for utility wildfire mitigation. Potential non-ratepayer sources identified include the general fund, Cap-and-Invest proceeds, publicly owned utility customers, or other sources. 
  1. Additional statutory changes to the utility wildfire mitigation process are not currently needed. 

Background: 
Signed into law on September 19, 2025, SB 254 (Becker) requires the CEA, as the administrator of the California Wildfire Fund, to submit to the Legislature and the Governor a report on or before April 1, 2026. The report must evaluate and set forth recommendations “on new models or approaches that mitigate damage, accelerate recovery, and responsibly and equitably allocate the burdens from natural catastrophes, including catastrophic wildfires, earthquakes, and other natural disasters, across stakeholders, including insurers, communities, homeowners, landowners, governments, electrical corporations, and local publicly owned electric utilities, to complement or replace the fund.” It requires consultation with the CPUC, OEIS, CDI, Office of Emergency Services (Cal OES), and Department of Forestry and Fire Protection (Cal FIRE), and solicitation of feedback from stakeholders.  

In December 2025, CSAC collaborated with the League of California Cities (CalCities) and Rural County Representative of California (RCRC) to submit joint local government recommendations for the Natural Catastrophe Resiliency Study. 

CSAC is monitoring this issue closely and will be informing our membership as the state takes further action. For questions, please contact Jordan Wells, CSAC Legislative Advocate, at jwells@counties.org.  

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