PG&E, Edison Stocks Fall Again After Latest Deal on Wildfire Liability
The amended bill left utilities exposed to open-ended wildfire claims, prompting BMO and Wells Fargo to cut ratings as PG&E fell 18% and Edison 23%.
- California utility stocks cratered Monday after state lawmakers advanced an amended Senate Bill 492 that omits liability protections investors anticipated. PG&E Corporation and Edison International shares plummeted while broader market indices remained stable.
- Filed Saturday, the legislation excludes Governor Gavin Newsom's proposal to bar insurers from suing utilities over wildfire claims and lacks a $6 billion per-incident liability cap that investors had priced into valuations.
- PG&E stock fell 18% to $13.57 by midday, while Edison International shares dropped 23% to $54.22, marking the company's largest single-day decline in more than 25 years. Analysts at BMO downgraded both utilities citing uncapped wildfire liability.
- Insurers argued that barring 'subrogation'—the process of recouping losses from utilities—would force them to raise premiums or drop coverage in high-risk areas, ultimately convincing legislators to reject Governor Newsom's liability protection proposal.
- Investors now await a legislative vote on the proposal scheduled for Tuesday morning, as Edison International management warned that uncapped wildfire liabilities could trigger credit rating downgrades amid 30,000 claims in litigation.
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Wildfire: PG&E Stock Plummets. It May Not Be Shielded From
This article was originally published on Cedarnews.net. For more news and exclusive reports, visit our website. Wildfire: Barron's California Dems hand Newsom rare defeat on wildfires. PoliticoPG&E, Utilities Plunge on California Wildfire Legislation Risk. This news was published on the Cedarnews website. For more breaking news and exclusive reports, visit our official website.
PG&E, Edison stocks fall again after latest deal on wildfire liability
Stocks for California utility companies faced more losses in early trading on Monday, after a new deal over the weekend on changes to the state's wildfire liability system when an investor-owned utility company causes a catastrophic fire failed to quell market concerns.
PG&E Sinks 18%, Edison International Tumbles 23% as California Wildfire Bill Omits Liability Cap
California lawmakers handed utility investors a brutal surprise over the weekend, and the fallout raises an urgent question about whether PG&E and Edison International can absorb what comes next without a credit rating collapse.
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