PG&E, Edison Crash as California Wildfire Bill Disappoints

Shares of California's biggest utilities cratered Monday after state lawmakers advanced a wildfire bill that leaves investors on the hook for future fire claims.

PG&E Corp. fell roughly 20% to a 52-week low, Edison International dropped as much as 24%, and Sempra also plunged, according to Bloomberg. Forbes reported PG&E touched $13.09 and was down almost 20% on the day — its steepest single-day drop since 2020.

The trigger is Senate Bill 492, which rebuffed a key piece of Gov. Gavin Newsom's plan to shift wildfire liability off the utilities. A wave of analyst downgrades followed.

What's in the bill

SB492 does not add new money to California's Wildfire Fund and creates no mechanism to replenish it, leaving shareholders exposed if claims drain the pot. The fund, created in 2019, currently has about $21 billion in claims-paying capacity.

Under the bill, PG&E would be required to cover nearly 48% of the Wildfire Fund if it runs dry.

The legislation also drops Newsom's original proposal barring insurers from seeking reimbursement from utilities for wildfire claims. MarketWatch reported analysts describing the bill as "more focused on victim protections without any new investor protections."