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CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

93

Introduced by Assembly Member Patterson

(Coauthors: Assembly Members Alanis, Boerner, Lackey, Rogers, and Sanchez)

February 20, 2026

An act to add Section 719.3 to the Public Utilities Code, relating to electricity.

Vote: majority   Appropriation: no   Fiscal committee: yes   Local program: no

LEGISLATIVE COUNSEL’S DIGEST

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law requires the Wildfire Fund Administrator, in consultation with the commission and other entities, to prepare and submit to the Legislature and the Governor a report that evaluates and sets forth recommendations on new models or approaches that mitigate damage, accelerate recovery, and responsibly and equitable allocate burdens from natural catastrophes, including catastrophic wildfires, across stakeholders, as provided.

This bill would require the commission, on or before January 1, 2028, to generate a report assessing the verified restitution shortfalls for victims of wildfires caused by electrical corporations occurring before July 12, 2019, and to recommend restitution mechanisms for electrical corporations to address restitution shortfalls, as provided. The bill would require the commission, in developing the restitution mechanisms, to ensure, among other things, that the verified restitution shortfalls are consistently and fairly paid to ensure full compensation is issued in a timely manner.

The people of the State of California do enact as follows:

SECTION 1.

(a) The Legislature finds and declares all of the following:

(1) The Public Utilities Commission’s authority includes the ability to condition financial approvals and rate determinations on compliance with public interest obligations, including wildfire safety and victim compensation.

(2) The commission should support utility wildfire victim restitution consistent with its constitutional and statutory obligation to balance the financial integrity of public utilities with the protection of ratepayers and the financial interest of the public, including wildfire victims.

(3) On April 7, 2026, the Wildfire Fund Administrator, pursuant to Section 719 of the Public Utilities Code, issued a report titled, “Enhancing California’s Resiliency to Natural Catastrophes: Senate Bill 254 (2025) Study Report” (SB 254 Report) identifying the need for integrated solutions to ensure affordable rates and the timely and just compensation of wildfire victims.

(4) The SB 254 Report further recognizes that delays in compensation, like those stemming from the 2015 to 2018, inclusive, wildfires caused by the Pacific Gas and Electric Company, create high transaction costs, materially reduce recovery for wildfire victims, undermine public confidence in legislative and regulatory processes, and are unjust for victims.

(5) State supportive mechanisms, such as the Wildfire Fund and the Continuation Account, should be considered, but the Legislature recognizes that the ultimate responsibility and accountability for ensuring the fair, full, and timely restitution of wildfire victims rests with the electrical corporation that ignited the wildfire.

(b) In enacting this act, it is the intent of the Legislature to ensure all of the following:

(1) The establishment of the policy of the State of California that the victims of utility-caused wildfires should be fully, fairly, and timely compensated for their losses.

(2) Utility financial incentives, including authorized return on equity, should be aligned with public outcomes, including, but not limited to, energy affordability and the full compensation of wildfire victims.

(3) Restitution mechanisms should be expedited and implemented by identifying wildfire victim restitution shortfalls and establishing mechanisms to ensure that utility wildfire victims are made whole.

(4) Restitution provided pursuant to Section 719.3 of the Public Utilities Code should be paid directly to wildfire victims and not be paid for attorney’s fees.

SEC. 2.

Section 719.3 is added to the Public Utilities Code, immediately following Section 719, to read:

719.3.

(a) For purposes of this section, all of the following definitions apply:

(1) “Fire Victim Trust” means the Fire Victim Trust created pursuant to the order of the United States Bankruptcy Court for the Northern District of California dated June 20, 2020, case number 19-30088, docket number 8053.

(2) (A) “Full compensation,” for a victim of a wildfire caused by the Pacific Gas and Electric Company between January 1, 2015, and December 31, 2018, inclusive, that was litigated through the United States Bankruptcy Court, means payment of 100 percent of the verified economic and noneconomic losses of the victim, as indicated within the Fire Victim Trust Determination Notices issued pursuant to the Fire Victim Trust.

(B) “Full compensation,” for a victim of a wildfire not described in subparagraph (A) but caused by an electrical corporation, means 100 percent of the financial damages as determined by a court order, settlement agreement, utility compensation program, or other restitution mechanism.

(3) “Timely” means within a timeframe established by the commission to balance commercially reasonable timing for electrical corporations and a reasonable recovery period for victims based on their date of wildfire loss.

(4) (A) “Verified restitution shortfalls” means uncompensated or undercompensated losses as determined through a court-approved trust administration process, settlement agreement, or commission-recognized methodology, except as specified in subparagraph (B).

(B) “Verified restitution shortfalls,” for a victim of a wildfire who is partially compensated through the Fire Victim Trust, means the total amount of all economic and noneconomic losses as indicated within the Fire Victim Trust’s Determination Notices issued pursuant to the Fire Victim Trust.

(b) On or before January 1, 2028, the commission shall generate a report assessing the verified restitution shortfalls for victims of wildfires caused by electrical corporations occurring before July 12, 2019, and recommend restitution mechanisms for electrical corporations to address those shortfalls to ensure victims are fully and fairly compensated in a timely manner while supporting long-term rate stability. The recommended restitution mechanisms shall not include any measures that authorize rate recovery for restitution payments.

(c) (1) In developing the restitution mechanisms, mechanisms to be included in the report, the commission shall ensure all of the following:

(A) Verified restitution shortfalls are consistently and fairly paid to ensure full compensation is issued in a timely manner.

(B) Incremental payments, if any, to wildfire victims are made on a proportional basis relative to the verified losses where full and immediate payment is not feasible.

(C) Establishment of timelines and benchmarks for achieving full compensation.

(2) The restitution mechanisms shall include assessments of verified restitution shortfalls for all victims of wildfires caused by an electrical corporation that prioritize and expedite remedies for victims of wildfires occurring between January 1, 2015, and July 12, 2019.

(d) In addition to subdivision (c), the restitution mechanisms developed for the report shall do all of the following:

(1) Ensure there is a path to full restitution for wildfire victims of Pacific Gas and Electric Company from wildfires occurring between calendar years 2015 and 2018, inclusive.

(2) Set a foundation and precedent for ensuring equitable restitution for all wildfire victims, including victims of the 2025 Eaton Fire, if it is determined that an electrical corporation caused that wildfire.

(3) Establish a framework within existing commission processes and those established through the Wildfire Fund to reduce costs for administration and streamline victim restitution processes.

(e) The commission shall not consider restitution mechanisms that include any measures that authorize rate recovery for restitution payments. The commission shall instead consider restitution mechanisms that rely on other measures, including, but not limited to, all of the following:

(1) Deferred or reduced shareholder dividends.

(2) Retained earnings or equity contributions.

(3) Bonds or other unstructured or structured debt mechanisms.

(4) Access to existing wildfire-related financial structures, where permissible.

(5) Other financial tools that preserve utility financial stability while ensuring full victim compensation.

(f) This section does not require the taking of private property but establishes conditions on the continued exercise of utility privileges granted by the State of California, including the authorization to collect rates, access capital markets, and operate as a regulated monopoly under a certificate of public convenience and necessity.

(g) The commission shall not implement the restitution mechanisms developed pursuant to this section unless explicitly authorized by statute.