Edison International stock crashed 24.2% by 2 p.m. ET Monday after a California legislative effort to limit utilities' liability for wildfire lawsuits collapsed over the weekend. Governor Gavin Newsom had backed a proposal that would have prevented insurance companies from suing utilities for wildfire damages, shifting the cost to insurers, but insurers argued this would force them to raise premiums or drop coverage in high-risk areas, and legislators ultimately rejected the plan. While some compromises remain, such as limiting attorneys' fees and denying bonuses to utility CEOs in wildfire years, the failure to end subrogation lawsuits is a major setback. Mizuho Bank downgraded Edison to neutral and cut its price target to $70, though investors appear to value the stock even lower.
Edison InternationalCalifornia legislation to limit wildfire liability failed, leaving Edison exposed to subrogation lawsuits.
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