California cannot keep rewarding utilities after catastrophic wildfires
California keeps handing bailouts and rate hikes to utilities that torch communities, with Edison posting record profits after the Eaton fire while lawmakers prepare another reward.
California regulators and lawmakers are poised to hand Southern California Edison yet another financial lifeline after the devastating Eaton fire, even as the utility reports record profits and dividends. This pattern of rewarding failure has become routine: when wildfires linked to utility equipment ravage neighborhoods, the state steps in with bailouts, higher rates for customers, and political cover instead of demanding accountability.
The Eaton fire, which scorched thousands of acres and destroyed homes in the Los Angeles area, followed the same script as previous catastrophes. Edison secured a state bailout that shielded it from the full financial consequences, allowing the company to post strong earnings and continue generous dividend payments to shareholders. Yet the same elected officials who decry climate-driven disasters appear ready to approve additional concessions, ensuring the utility faces minimal pressure to overhaul its aging infrastructure.
Gov. Gavin Newsom and state legislators have repeatedly chosen this path of least resistance. After earlier wildfires, they created mechanisms to shift massive costs onto ratepayers rather than force utilities to absorb losses or face bankruptcy-level consequences. The result is a system that insulates executives and investors from the human and economic toll while Californians pay higher bills for electricity that keeps sparking fires.
Edison’s post-Eaton performance reveals the disconnect. Record profits arrived alongside the bailout, demonstrating that the state’s intervention did more to protect the balance sheet than to prevent future disasters. Buried in the policy discussions is the uncomfortable truth: each new reward reduces the incentive for utilities to prioritize safety upgrades over returns to Wall Street.
California cannot afford to keep subsidizing this cycle. As lawmakers consider the next round of favors for Edison, the question looms whether any wildfire, no matter how catastrophic, will finally force a break from protecting profits at the expense of public safety.
Original reporting: CalMatters.
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