For a leader with grand ambitions of tackling big issues from health care to taking on President Donald Trump, California Governor Gavin Newsom has spent much of his first six months in office bogged down in a crisis at home.
Two days after his November election, the state’s deadliest wildfire decimated an entire town, with PG&E Corp.’s equipment blamed as the likely cause. The January bankruptcy of California’s largest utility set off a scramble for Newsom to unite lawmakers, power companies and interest groups in finding a way to cover the billions of dollars in liabilities from devastating blazes.
There were moments when the endeavor seemed doomed to failure. In fact, as recently as two weeks ago, things still looked bleak. A July 12 deadline to get a deal approved by the legislature was approaching fast and the votes still were up in the air. But then in the span of a few days, Newsom managed to pull off the biggest legislative victory of his young tenure as governor and, in the process, burnish his credentials as a national political figure.
The state Assembly on Thursday overwhelmingly approved a bill that would create a $21 billion fund that power companies can tap to cover future fire liabilities, while limiting the financial obligation of ratepayers and requiring more stringent safety standards. Meeting Friday’s deadline was key, with Sacramento lawmakers headed for a month-long recess and credit-rating companies warning that other California utilities may be cut to junk status in the absence of state action.
“It’s good that we passed something before we head into the the teeth of fire season,” Newsom, 51, said in an interview Thursday. “I’m relieved. We’re more prepared than we have been in years but we’re not even close to as prepared as we need to be.”
Newsom, the Democratic successor to four-term governor Jerry Brown, won election after skewering Trump as “a bully,” branding California as “keeper of the nation’s future” and sketching a sweeping vision of the state’s obligation to lead on climate change while providing affordable housing, education and health care to those left behind amid an unprecedented economic boom. Political observers widely expect his ambitions to include an eventual White House run.
But crises at home have felled California political candidates with grand aspirations before. Former Democratic Governor Gray Davis swept into office in 1999 with strong approval ratings and ambitious plans but was ousted in a recall election just four years later after being blamed for an energy shortage that led to blackouts and PG&E’s 2001 bankruptcy filing.
While Newsom has been grappling with the latest PG&E bankruptcy, he also took on numerous issues simultaneously, from health care to housing and the death penalty.
“He is bucking the conventional political idea that he should only have one or two signature issues,” said Daniel Zingale, an adviser to the governor. “He subscribes to the idea that we are living in times of fierce urgency.”
Along the way, Newsom has drawn plenty of criticism. The nonpartisan Legislative Analyst’s Office said his budget, though it projects a $21 billion surplus and sets aside $19 billion in various reserve accounts, misses an opportunity to better protect the state from a downturn. Republicans, a minority in the legislature, decried the expansion of the health-care system to cover undocumented immigrants without fixing the service first.
The PG&E case illustrated one of Newsom’s governing tactics: delegating others to study and devise solutions. In February, he named a strike team of staff members and outside advisers, chaired by his chief of staff, Ann O’Leary, to review the wildfire liability crisis.
After months went by with little publicly visible progress on the utility wildfire issue, though, some lawmakers began to complain. In early June, a poll by the Public Policy Institute of California showed that only a third of state residents approved of how Newsom was handling the situation.
“The governor’s office was involved in many things, such as the budget,” said state Senator Bill Dodd, a Democrat whose district was ravaged by utility-spawned wildfires in 2017. “I’m not involved in the budget, I’m involved in wildfires, and I was impatient that this was taking too long.”
Newsom said in the interview that he and his staff worked steadily with top lawmakers on the wildfire bill. One especially significant moment, he said, was a March meeting with credit-rating firms at which he and legislative leaders described their plans and asked the companies to refrain from downgrading utilities while the effort was ongoing.
Bob Hertzberg, the Democratic Senate majority leader, said Newsom’s staff began talking with him and other legislative leaders about the wildfire issue shortly after the inauguration. The pace of those talks accelerated in recent weeks as the July 12 deadline approached, he said.
They resulted in the outlines of the book-length piece of legislation that eventually won final passage, while leaving out priorities such as fire-prevention programs and overhauling state law governing residential and commercial fire insurance, in the interest of meeting the deadline. Newsom said in the interview that he is committed to doing more to address those issues when the legislature returns from recess in August.
A critical part of the effort to move the bill toward passage was gaining support from an array of key constituencies, from fire victims to utility ratepayers and employees. Ana Matosantos, a top Newsom aide who serves as his cabinet secretary, cycled among legislative offices and held briefings in the past two weeks with full caucuses of both the Senate and Assembly, speaking without notes on details of the complex bill, said Dodd and Autumn Burke, a member of the Assembly utilities committee.
“We worked closely with the leaders of both chambers as they educated their members,” O’Leary, the governor’s chief of staff, said in an interview. “It was hand-in-glove, making phone calls, meeting with senators and Assembly members.”
On Monday, hours before the bill was to get its first big test at a Senate committee hearing, the governor met with a group of wildfire victims including Patrick McCallum, a veteran lobbyist whose Santa Rosa house was destroyed in the 2017 Wine Country fires. Newsom listened intently as they told their stories, McCallum said, then told the group: “I’m doing this so this doesn’t happen to future victims. I will be aggressive with PG&E going forward.”
Newsom’s staff sought support from the victims’ group to help persuade lawmakers to support the utility bill, McCallam said. “We made it clear, to get our help, we needed certain provisions, and they met what we felt was needed.”
Days of frenzied negotiations, in fact, led to a heavily amended bill that won support from utility labor unions, solar providers and even state Senator Jerry Hill, a longtime PG&E critic whose district was the site of a deadly 2010 explosion involving one of the utility’s gas pipelines. In the interview, Newsom called Hill’s backing “a tipping point” that helped persuade other members to support the legislation.
One change intended to win over labor, an amendment that makes it more difficult for cities to acquire utility assets, angered Bay Area mayors. San Francisco’s London Breed and other area mayors wrote a sharply worded letter to Newsom and legislative leaders, saying that the amendments “set a dangerous precedent.”
Here, too, Newsom’s staff worked to prevent the opposition from delaying the bill. After texting back and forth with Matosantos, San Jose Mayor Sam Liccardo said he talked with her by phone, and she agreed to work together “on softening the unintended impact,” Liccardo said.
The bill ended up passing in the Senate on Monday by a 31-7 margin. In preparation for Thursday’s final passage vote in the Assembly, Chris Holden, chairman of the utilities committee, criss-crossed the hallways of the capitol building, visiting offices and talking with Assembly members about the urgency of passing a bill. Newsom’s staff continued to make calls until late Wednesday night, the governor said.
Dodd, sitting in his capitol office late Tuesday as lobbyists and others lined up outside for meetings with him, pulled out his phone and scrolled through a long chain of text messages he had received from Newsom.
“Thanks for all your help with this … big deal,” one read. “Congrats on the vote tonight. Appreciate all the hard work,” read another.