PG&E, Edison International, and Sempra plunged 18.8%, 19.5%, and 3.9%, respectively, in pre-market trading Monday after California lawmakers introduced wildfire legislation that blocked Governor Gavin Newsom's proposal to prevent insurance companies from suing utilities for wildfire-related claims. Senate Bill 492, which lacks liability protection for utilities, would require PG&E to pay nearly 48% of the state's wildfire liability fund if it runs out of money, with costs not passable to ratepayers. PG&E, which emerged from bankruptcy in July 2020, said the bill does not adequately address financing risks, while Edison International criticized it for not providing a stable financing framework. Mizuho Securities downgraded all three utilities to Neutral from Outperform, and Wells Fargo and BMO Capital also cut PG&E, citing insufficient liability backstop and open-ended tail risk.
Edison InternationalCalifornia wildfire bill lacks liability protection, harming Edison International.
PG&E CorpPG&E faces high liability costs under new bill, with no ratepayer pass-through.
Sempra EnergySempra affected by wildfire legislation and downgrades due to regulatory risk.
