Sacramento fire liability compromise collapses; special session ahead Play

The future balance between increases in your electric bill and increases in your fire insurance costs is an open question in California.

Monday, the California Legislature rejected a compromise drafted with the governor over the issue.

The issue is who and how much should pay future fire losses when Southern California Edison and Pacific Gas and Electric cause future major fires. The utilities want to avoid lawsuits from insurance companies after they pay for damages to large numbers of burned out property owners.

The governor sided with SCE and PG&E. He's worried that they will go bankrupt with one more big fire. Wall Street is worried also — SCE stock prices collapsed 25 percent over two days.

There was a compromise deal in the Legislature that went up for a vote Monday. It collapsed. The Legislature adjourned.

Assembly Speaker Robert Rivas said he would call the Assembly back into session for a special session to deal with the mess.

Monday a Sacramento TV station, KCRA, broke the news about the Legislature coming back to bail out PG&E and SCE later this year. Seconds later, the stock price shot back up.

State legislators from Southern California, who represent fire victims, feel the governor's deal is a big bailout for the electric companies.

All this will have enormous impact on your power bills and your insurance rates in coming years.