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Prepared by Precision Advocacy
The legislature has entered the final and most compressed weeks of the 2026 legislative session, with major policy, fiscal, and budget-related issues moving quickly toward resolution. August 13 marks the appropriations suspense deadline, when hundreds of bills with significant fiscal impacts will either advance to the floor or be held for the year. From there, lawmakers will have just over two weeks to complete negotiations and send measures to the governor before the legislature adjourns on August 31.
As anticipated, several issues with significant implications for Orange County are developing simultaneously. Wildfire liability reform has emerged as a major end-of-session negotiation, with the administration and legislative working groups considering potentially significant changes to utility liability and local government recovery. Counties are also pressing for additional support to address the anticipated impacts of federal health care changes on indigent care, including bridge funding and changes to the AB 85 (2013) realignment framework. At the same time, legislative committees continue to examine longer-term questions involving electricity reliability, affordability, and the state’s rapidly changing energy system. With very little time remaining, the next several weeks will require close engagement as proposals are amended, negotiated, and potentially incorporated into final end-of-session packages.
Wildfire Liability Reform Continues to Emerge as a Major End-of-Session Issue
Wildfire liability reform has quickly become one of the major issues facing the legislature in the final weeks of the 2026 legislative session. Governor Gavin Newsom is developing a broad proposal to restructure how damages are paid following wildfires caused by investor-owned utilities, with the administration arguing that changes are necessary to protect wildfire survivors, preserve the state’s Wildfire Fund, stabilize utility finances and provide ratepayer relief. The proposal has not yet been introduced in legislative language, leaving lawmakers and stakeholders with a compressed timeline before the August 31 adjournment deadline.
The administration’s developing proposal would substantially change how wildfire claims are handled. Among the provisions reportedly under consideration are restrictions on insurance-company subrogation claims against utilities and the Wildfire Fund; limits on certain non-economic damages; elimination of punitive damages in some circumstances; restrictions on third-party litigation financing and the purchase of wildfire claims; and creation of a state-administered “fast pay” program intended to compensate survivors more quickly. Of particular concern to counties, the proposal would reportedly limit local governments’ ability to recover the full replacement cost of public infrastructure damaged by a utility-caused wildfire, instead tying recovery to the diminished value of the damaged asset.
At the same time, the administration is proposing several additional wildfire prevention, affordability and utility-accountability measures. These include requiring utility shareholders to finance an additional customer bill credit during the next two summers, reducing the rate of return utilities may earn on certain wildfire expenditures outside their CPUC-approved budgets, increasing penalties for utility safety violations, tying utility executive compensation more closely to safety performance, and creating escalating enforcement mechanisms for repeated safety violations. The administration is also proposing to use future growth in existing insurance premium tax revenues to fund home-hardening grants, including improvements such as ember-resistant vents and fire-resistant roofing materials. The administration argues these measures would increase prevention investments while avoiding a new tax.
The Assembly has already formed a six-member Democratic working group to develop its response to the administration proposal. Importantly for Orange County, Assemblymember Cottie Petrie-Norris, Chair of the Assembly Utilities and Energy Committee, is participating in the working group alongside Assemblymembers Lisa Calderon, Isaac Bryan, Rhodesia Ransom, Ash Kalra, and Steve Bennett. The issue also intersects with the Senate Judiciary Committee chaired by Senator Tom Umberg, making members of the Orange County delegation particularly relevant as negotiations accelerate.
CSAC Raises Significant Concerns for Counties. CSAC is urging counties to immediately engage their legislative delegations and oppose any wildfire liability changes that shift costs associated with utility-caused fires from utilities and their shareholders to local governments, taxpayers, or wildfire survivors. Last week, CSAC emphasized that no formal proposal had yet been released but that discussions were moving rapidly and counties should communicate their concerns to legislators during the remaining weeks of session.
CSAC, the Cal Cities, and the Rural County Representatives of California have argued that reforms should preserve the ability of local governments to fully recover the costs of damaged infrastructure, emergency response and community rebuilding following a utility-caused wildfire. The organizations specifically oppose eliminating inverse condemnation, limiting damages available outside inverse condemnation, or otherwise reducing local government recovery. They warn that limiting reimbursement could leave counties responsible for rebuilding roads, water and sewer systems and other public assets without an adequate funding source, potentially affecting local fiscal solvency and delaying broader community recovery.
CSAC’s specific county priorities as negotiations continue include opposing proposals that would require them to absorb emergency response costs caused by negligent utilities, require counties to rely primarily on FEMA reimbursement, restrict recovery for damaged infrastructure, or eliminate the ability to recover lost tax revenues following a catastrophic fire. CSAC’s background materials note that property tax revenue supports core county services, including public safety and health and human services, and argue that shifting these losses to counties would ultimately transfer utility-caused costs to local taxpayers.
At the same time, counties are supporting reforms focused on preventing fires and reducing community risk, including greater grid hardening, vegetation management and fuel reduction; streamlined wildfire mitigation projects; stronger utility safety oversight and enforcement; home-hardening assistance; implementation of Zone Zero requirements; regularly updated fire hazard severity maps; financing tools for local mitigation projects; and stronger connections between wildfire mitigation investments and insurance affordability. CSAC and its local government partners have also called for better coordination among CAL FIRE, the Office of the State Fire Marshal, utilities, fire districts, cities and counties.
For counties, the immediate advocacy priority will be ensuring that any end-of-session wildfire package preserves counties’ ability to recover the full costs associated with utility-caused disasters while supporting meaningful investments in wildfire prevention and home hardening. Given Assemblymember Petrie-Norris’ role on the Assembly working group and Senator Umberg’s Judiciary Committee leadership, Orange County has particularly important delegation members positioned to influence the final framework.
Assembly Budget Subcommittee Examines Indigent Care Impacts and Implications
On August 5, Assembly Budget Subcommittee No. 7 on Accountability and Oversight held an informational hearing examining how federal health care changes, particularly H.R. 1, are expected to increase California’s uninsured population and renew pressure on county indigent health care programs. The hearing focused on the state’s preparedness for significant Medi-Cal coverage losses, the capacity of counties to absorb newly uninsured residents, and potential short- and long-term state responses.
Although Orange County did not testify at the hearing, the materials presented indicate that the County could experience among the most significant impacts statewide. The California Health Care Foundation (CHCF) projects that Orange County Medi-Cal enrollment could decline by approximately 249,000 people by 2028, the second-largest projected county reduction after Los Angeles County. Not every person losing Medi-Cal will ultimately seek county indigent care, but even a portion of that population could create significant new fiscal and operational pressures for the County’s health care safety net.
County indigent care programs operate as health care programs of last resort for low-income residents who lack another source of coverage. Counties have maintained this responsibility under Welfare and Institutions Code Section 17000 for decades, but the size and scope of these programs declined dramatically following implementation of the Affordable Care Act (ACA) and expansion of Medi-Cal. Before the ACA, approximately 850,000 Californians were enrolled in county indigent care programs; following Medi-Cal expansion, statewide enrollment fell to approximately 10,000. As a result, many counties reduced or dismantled eligibility systems, provider networks, staffing, claims functions, and other infrastructure previously used to administer indigent care.
This contraction is particularly important as counties prepare for the possibility of substantially larger uninsured populations. County representatives testified that rebuilding indigent care capacity will require much more than simply paying for additional medical services. Counties may need to recreate eligibility processes, treatment authorization systems, claims processing, provider agreements, nursing support, quality monitoring, specialty-care arrangements, and administrative staffing. Counties that don’t operate their own hospitals or clinics may also need to negotiate new arrangements with private hospitals, community clinics, physicians, and other providers.
The hearing also highlighted that county indigent care is not equivalent to Medi-Cal coverage. Traditional county programs generally provide a more limited level of care and can vary substantially from county to county. Preventive care, prescription drugs, specialty services, behavioral health treatment, provider networks, and continuity of care may be more limited than under Medi-Cal. Legislators and witnesses cautioned that residents who lose comprehensive coverage may delay treatment until illnesses become more severe, increasing emergency department use, uncompensated hospital care, and overall health care costs.
The magnitude of the coming coverage losses remains uncertain. The Department of Health Care Services (DHCS) testified that H.R. 1 work and community engagement requirements are projected to result in slightly more than one million Medi-Cal coverage losses at full implementation, while six-month eligibility redeterminations could cause an additional approximately 278,000 people to lose coverage. DHCS also cautioned that newer federal guidance could increase disenrollment beyond current estimates. Separately, the administration currently projects a decline of approximately 454,000 Covered California enrollees.
The Legislative Analyst’s Office estimated that approximately 20% to 50% of newly uninsured residents, roughly 300,000 to 700,000 Californians, could ultimately seek county indigent care. However, legislators repeatedly acknowledged that the state currently lacks sufficient information to determine where these individuals will seek care, what services they will require, or how costs will be distributed across counties. There is no standardized statewide system tracking county indigent care enrollment, eligibility standards, benefits, utilization, and spending, and DHCS testified that developing such a system could take years because counties administer their programs differently.
For Orange County, this uncertainty complicates both budgeting and operational planning. A significant increase in uninsured residents could increase demand for County eligibility screening and contracted medical services while also placing greater uncompensated-care pressure on hospitals, clinics, physicians, ambulance providers, and other safety-net providers. Coverage disruptions could also create secondary impacts for behavioral health, homelessness services, communicable disease programs, and emergency departments when residents lose access to consistent primary and specialty care.
The hearing also focused heavily on the adequacy of existing county funding. County indigent health and public health programs are principally supported through 1991 health realignment revenues. Following Medi-Cal expansion, AB 85 (2013) redirected a significant portion of county health realignment funding to offset state CalWORKs costs based on the assumption that counties would realize substantial savings as indigent residents moved into Medi-Cal. Approximately $1.2 billion remains statewide for both county public health and indigent care in 2026-27, but those revenues do not automatically increase when indigent-care caseloads or medical costs rise.
County witnesses argued that the fiscal environment has now changed substantially from the circumstances under which AB 85 was enacted. With potentially hundreds of thousands of residents returning to county-funded systems, counties could face renewed indigent-care obligations without a corresponding restoration of the health realignment revenues previously redirected to the state. Without additional resources, counties may be forced to rely on local general funds or redirect resources currently supporting public health and other services.
County representatives therefore requested two immediate actions from the legislature. First, they urged approval of a one-time $100 million indigent care bridge investment to help counties prepare for increased demand and cover near-term costs before the largest federal changes take effect. The request is intended as temporary assistance rather than a comprehensive replacement for Medi-Cal and would help counties rebuild administrative and provider capacity while the state develops a longer-term policy response.
Second, counties requested technical statutory changes to AB 85, including addressing the existing realignment redirection formulas. County representatives argued that existing methodologies are based on circumstances that predate the anticipated increase in indigent-care responsibility and need greater flexibility when county costs materially change.
The 2026 State Budget includes several health care investments intended to mitigate federal changes, including approximately $196.9 million for county Medi-Cal eligibility workload, $250 million for public hospitals, $1 billion for community clinics, $90 million for distressed hospitals, and ongoing state funding for Covered California premium assistance. However, the budget did not provide direct funding specifically for county indigent care programs. Earlier proposals contemplated substantially larger investments for county indigent health services, but those proposals were not included in the final budget.
For Orange County, the hearing strengthens the case for continued advocacy for both the $100 million bridge funding proposal and technical AB 85 changes. Orange County’s projected Medi-Cal losses suggest the County may be among those most exposed to a renewed indigent-care obligation.
The hearing also suggested several areas Orange County may want to monitor as implementation proceeds, including Medi-Cal procedural terminations and disenrollment, emergency department self-pay visits, uncompensated hospital and clinic care, demand for County eligibility services, specialty-care access, and health realignment expenditures. Establishing a clearer baseline of the County’s existing indigent-care infrastructure, including eligibility standards, provider contracts, claims capacity, staffing, and available funding, could help quantify the local fiscal impact as federal changes begin to take effect.
Looking at the longer term, CHCF urged the state to avoid simply rebuilding 58 separate and uneven county systems. Its testimony emphasized a more coordinated statewide approach centered on primary and preventive care, continuity of treatment, and administrative simplicity. CHCF cautioned that relying entirely on separate county programs could create significant disparities in access depending on where an individual lives and could duplicate administrative costs across jurisdictions.
Overall, the hearing clearly established that counties are likely to assume significantly greater indigent-care responsibilities as federal health coverage changes take effect, while current funding, infrastructure, and statewide data systems are not designed for the anticipated scale. For Orange County, the combination of a projected 249,000-person reduction in Medi-Cal enrollment and the absence of a dedicated state funding mechanism creates substantial potential exposure. Lawmakers expressed urgency around supporting counties in the near term while developing a more coordinated statewide strategy, but no formal action was taken, and it remains uncertain whether the legislature will provide the requested $100 million or enact the AB 85 technical changes before the end of the 2026 legislative session.
Oversight Hearing on Electricity Reliability
The Senate Energy, Utilities and Communications Committee held an oversight hearing last week on “Balance of Power: An Update on Electricity Reliability, Affordability, Clean Energy Development, and Energy Market Expansion.” Chaired by Senator Ben Allen (D-El Segundo), the hearing was attended by Senators Henry Stern (D-Sherman Oaks), Anna Caballero (D-Salinas), Jerry McNerney (D-Stockton), and Laura Richardson (D-Inglewood). The hearing was held, in part, in response to the unexpected rotating power outages on the California Independent System Operator (CAISO) grid in 2020, which lasted between eight and 90 minutes depending on the customer and raised concerns about the state’s ability to maintain sufficient grid capacity during periods of extreme demand.
Panelists included Siva Gunda, Vice Chair of the California Energy Commission (CEC); Leuwam Tesfai, Executive Director of the California Public Utilities Commission (CPUC); Delphine Hou, Deputy Director of the Statewide Energy Office at the California Department of Water Resources; Elliot Mainzer, President and Chief Executive Officer of CAISO; and Joseph Eto, Chair of the CAISO Board of Governors.
Summary. The CAISO network is a long-distance, high-voltage transmission system that delivers wholesale electricity to local utilities for distribution to nearly 32 million customers. The ISO grid is one of the largest in the world, encompassing approximately three-quarters of California and a small portion of Nevada and delivering more than 260 million megawatt-hours of electricity each year.
Generally, panelists reported that California’s electrical grid is structurally in a stronger position for planning and procurement than it was at the time of the 2020 outages. Forecasting of electricity demand has improved, particularly during weather events, and a historic level of electricity procurement is helping the state meet anticipated demand. Increased coordination among the state’s energy agencies has also improved tracking and planning as California faces increasing electricity demand, extreme weather, and uncertainty surrounding federal energy policies.
Panelists provided an update on their coordinated work to improve short-term grid reliability while bringing additional clean energy resources online over the longer term. Since 2020, more than 24.8 gigawatts of new capacity have been procured, all from clean energy and battery storage resources, with no new fossil-fuel procurement.
Looking toward the summer, panelists indicated that available grid resources have improved significantly year over year as additional clean energy and storage resources have come online. The CEC is also incorporating extreme and low-probability weather events into its reliability forecasts and planning contingency resources for those scenarios.
Water conditions remain an important factor in electricity reliability. Lower-than-usual snowpack, rapid snowmelt, and above-normal ocean temperatures can affect hydroelectric resources, conservation needs, and electricity demand during coastal heat events.
Extended Day Ahead Market (EDAM) and the Western Energy Imbalance Market (WEIM). Launched in May, the Extended Day-Ahead Market (EDAM) is a voluntary day-ahead electricity market intended to provide reliability, economic, and environmental benefits to utilities throughout the West. Building on the Western Energy Imbalance Market (WEIM), EDAM allows participating utilities to coordinate electricity resources across a larger geographic area and plan energy transactions a day in advance.
Panelists emphasized that greater coordination among western states allows California and its neighbors to share resources more efficiently. California increasingly has periods when its clean energy production exceeds in-state demand, allowing excess, lower-cost electricity to be exported rather than curtailed. Conversely, the state can import electricity when conditions tighten. Panelists argued that EDAM and WEIM allow the western grid to optimize available resources, improving reliability while producing potential energy savings for customers.
2026 AB 825 Report. Assembly Bill 825 (Petrie-Norris, Chapter 116, Statutes of 2025) was intended to facilitate the expansion and use of voluntary wholesale energy markets throughout the Western United States. The legislation enables CAISO to partner with an independent regional organization to govern and operate these markets for the benefit of ratepayers.
A report released earlier this year indicates that implementation of the legislation remains on track. The continuing development of a broader western market is significant because state energy officials view greater regional coordination as one tool for maintaining reliability while integrating increasing amounts of renewable generation.
Strategic Reliability Reserve. Beyond baseline electricity demand, Gunda discussed the state’s Strategic Reliability Reserve, which provides additional capacity for circumstances that are not incorporated into normal electricity procurement.
Planning scenarios include delays in bringing authorized generation or storage resources online, extreme heat similar to August 2020, and combinations of extreme heat, drought, and wildfire conditions. Based on current planning assumptions, state agencies project a surplus of electricity capacity under most scenarios. The principal exception would be the unlikely circumstance in which extreme heat, drought, and significant wildfire events occur simultaneously.
Future Load Growth. CAISO currently serves approximately 46 gigawatts of load, compared with approximately 55 to 60 gigawatts statewide. Substantial additional capacity will be required over the coming decades as electricity demand increases.
Data centers, electric vehicles, and building electrification are expected to be among the largest sources of new load. CAISO anticipates approximately 20 additional gigawatts of demand by 2045, while overall statewide electricity demand is projected to increase by approximately 50 to 70 percent over the same period.
Legislators raised concerns about data center energy demand, the geographic distribution and safety of battery storage facilities, and electricity affordability for customers.
For Orange County, the hearings underscore the tension that will continue to shape state energy policy – California appears to be in a significantly stronger reliability position than it was in 2020, but the state must add substantial new generation, storage, and transmission capacity to accommodate future load growth while also limiting the impact of those investments on electricity rates. Regional energy markets, improved forecasting, energy efficiency, and strategic reserve resources are all being positioned as tools to manage those pressures. At the same time, continued legislative scrutiny of utility costs and ratepayer-funded programs is likely as affordability becomes an increasingly prominent component of California energy policy.
Additional Background Information and Reports
Grant Opportunities
Below is a list of the latest grant opportunities released by the state. All opportunities for local jurisdictions may be found here.
Application Deadline:10/5/26 16:00
Title: California Serves Grant Program 2026-27
State Agency / Department: CA Department of Education
Match Funding? No
Estimated Total Funding:$5,000,000
Funding Method: Advances and Reimbursement(s)
Anticipated Open Date: 2027
Title: Watershed Resilience Conservation Implementation
State Agency / Department: Department of Water Resources
Match Funding? No
Estimated Total Funding: $2,700,000
Funding Method: Reimbursement(s)
Application Deadline: 9/10/26 11:59
Title: Rubberized Pavement Grant Program
State Agency / Department: Department of Resources Recycling and Recovery
Match Funding? No
Estimated Total Funding: $6,371,315
Funding Method: Reimbursement(s)
Governor’s Press Releases
Below is a list of the governor’s press releases beginning August 5.
August 12: California’s latest efficiency wins include access to life-saving heat tools, smarter and faster hiring efforts, and simplified business tax filing
August 11: First Partner Siebel Newsom, Governor Newsom, and #HalfTheStory launch California’s first Teen Tech Council
August 11: Governor Newsom fast-tracks 1,700 new affordable housing units
August 11: As 2026 continues notching heat records, Governor Newsom announces a strategic action plan to address extreme heat in California
August 11: Governor Newsom’s mental health reform continues to deliver, announcing 15 new projects expanding care across the state
August 10: First Partner Jennifer Siebel Newsom, Senate President pro Tem Monique Limón celebrate women founders leading innovation in California
August 10: Governor Newsom condemns Trump administration proposal to weaken federal gun safety
August 10: Golden State in the spotlight: Governor Newsom announces nine new TV projects – including iconic reboots, sequels, and star-studded dramas – to launch second year of California’s expanded tax credit program
August 10: Governor Newsom announces new AI cyber defense program to protect California’s critical infrastructure
August 7: Governor Newsom announces appointments 8.7.26
August 7: Governor Newsom announces judicial appointments 8.7.2026
August 7: Governor Newsom announces $3,500 instant rebates now available for Californians buying their first zero-emission vehicle
August 7: Governor Newsom honors commitment to wildlife protection and public safety with 36 new law enforcement officers
August 6: Governor Newsom proclaims State of Emergency in Calaveras County for the Gann Fire response
August 6: Governor Newsom announces appointments 8.6.2026
August 6: Governor Newsom signs legislation 8.6.2026
August 6: Trump’s FCC illegally axes limits that protect Americans from broadcast media conglomerates
August 6: Governor Newsom calls on Californians to fight back against Trump’s reckless offshore drilling agenda
August 5: Governor Newsom announces appointments 8.5.2026
August 5: Governor Newsom signs tribal-state gaming compact
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