PG&E and Edison International Shares Drop Sharply as California Wildfire Bill Passes Without Liability Cap
California utility stocks PG&E Corporation (PCG) and Edison International (EIX) plummeted by nearly 18% and 23%, respectively, after the state passed an amended wildfire bill that omitted key liability protections. Senate Bill 492 aims to expedite claims payments for victims but lacks a $6 billion per-incident cap on utility liabilities or mechanisms to replenish the Wildfire Fund once depleted. The absence of these investor-backed provisions has triggered sharp sell-offs in PG&E and Edison International, with both companies facing significant financial exposure due to ongoing litigation. Analysts from BMO, Wells Fargo, and Mizuho downgraded their ratings for PCG and EIX, citing increased wildfire-related tail risks without a cap on liabilities. The selloff is largely isolated within the California utility sector, as broader market indices like SPY and XLU saw only minor declines. PG&E has already been rated below investment grade, while Edison International faces over 30,000 active claims.
Topics: California legislation regulatory risk utility stocks wildfire liability