The California Assembly will kill the wildfire liability plan CAL eg & Gov. Newsom agreed to days ago, according to Ashley Zavala, citing multiple sources tell me.

• The plan (SB 492) had been giving PG&E/SoCal Edison financial heart burn because it wouldn't let them shift future fire costs to insurance.

California utility regulation has repeatedly run through this cycle: utilities seek mechanisms to pass wildfire costs to ratepayers or insurers, the legislature balks, and the equities reprice on the residual balance-sheet exposure. The transmission channel here is direct, since the liability framework determines whether future fire costs sit on the utility or are socialised, and that allocation drives the equity risk premium and the cost of capital for the investor-owned names. A plan agreed with the governor and then killed in the Assembly within days is a familiar pattern in this state's utility politics, where gubernatorial backing has not historically guaranteed passage when ratepayer-cost optics are involved. What separates this from routine legislative failure is the speed: deals that collapse this quickly tend to signal the underlying bill lacked a whip count rather than hitting a policy snag, which raises the question of what, if anything, replaces it before the next fire season reprices the exposure. Worth watching is whether a successor bill emerges with stronger cost-shifting provisions, how the utilities' credit spreads respond given the wildfire fund's finite capacity, and any rating-agency commentary, since downgrades have been the mechanism through which prior liability impasses transmitted to the stocks.