SACRAMENTO, CA – A new set of recommendations from the California Public Utilities Commission could signal major changes ahead in how California pays for wildfire damage, mitigates risk, and protects access to insurance — issues that directly affect rural counties throughout the Sierra and foothill regions.

Released Jan. 30, the CPUC’s report outlines sweeping proposals intended to inform a forthcoming legislative report by the California Earthquake Authority. That report stems from Senate Bill 254, authored by Sen. Josh Becker, which directs the authority to recommend long-term reforms to California’s wildfire liability and insurance systems.

The bill’s mandate is ambitious: ensure residents can obtain insurance, reduce litigation costs, provide faster compensation to wildfire victims, strengthen mitigation efforts, and maintain the financial stability of utilities so they can continue investing in safety upgrades.

Rural Counties Weigh In

The Sacramento-based advocacy organization Rural County Representatives of California (RCRC), which represents dozens of rural counties including many in the Sierra region, submitted comments to the authority alongside the California State Association of Counties and the League of California Cities.

RCRC has long argued that wildfire policy decisions made in Sacramento have disproportionate impacts on rural communities, where high fire risk, limited infrastructure, and shrinking insurance markets collide.

According to the organization, wildfire liability, mitigation funding, and insurance availability remain among the most urgent issues facing rural counties as climate-driven fire seasons intensify.

Utilities Facing Mounting Costs

The CPUC regulates California’s major investor-owned utilities, including Pacific Gas and Electric Company, Southern California Edison, San Diego Gas & Electric, and PacifiCorp.

In its report, the commission concluded that California’s current wildfire framework places “outsized and unsustainable burdens” on utilities and their ratepayers. It emphasized that although power lines can spark fires, the growing destruction of recent wildfires stems largely from climate change, expanding development in the wildland-urban interface, and decades of accumulated vegetation fuel.

Those factors, combined with billions spent on wildfire claims and infrastructure upgrades, have contributed to sharply rising electric bills statewide.

Major Policy Changes Under Consideration

To address the growing costs and risks, the CPUC recommends exploring several fundamental changes to California’s wildfire liability structure.

Among the proposals:

• Revisiting inverse condemnation rules, which currently hold utilities financially responsible for wildfire damage caused during the delivery of public service, regardless of fault.

• Capping or limiting liability under tort law, potentially restricting damage awards, eliminating punitive damages, or excluding compensation for non-economic losses.

• Replacing the state’s Wildfire Fund with a broader catastrophic-event fund that could distribute costs among more contributors and cover multiple types of disasters.

• Shifting portions of wildfire mitigation funding from utilities to other sources, including the state’s General Fund, climate program revenues, and publicly owned utilities.

• Streamlining permitting and funding mechanisms to accelerate vegetation management and other mitigation projects.

If enacted, these changes could alter how wildfire costs are shared among utilities, taxpayers, insurance companies, and property owners.

What It Means for Sierra Communities

For residents of foothill and mountain counties, the stakes are high. Rural homeowners have already seen insurance options shrink, premiums surge, and utility rates climb as wildfire costs mount.

RCRC officials say they will continue working with state lawmakers and the authority to ensure rural concerns remain part of the discussion as proposals move forward.

The authority’s report to the Legislature is expected later this year, and it could form the foundation for major wildfire policy reforms in 2026 and beyond.

The SNC Board Approves Wildfire and Forest Resilience Grants to Help Protect Communities