PG&E Stock Plummets on California Wildfire Legislation. Why Wall Street Isn't Happy. -- Barrons.com

By Kit Norton

California has left investors in the lurch after the state legislature over the weekend introduced wildfire legislation that didn't include liability protection for utilities.

PGE stock dropped 15% to $14.14 in premarket trading on Monday as investors were selling shares of the California utility following the California State Assembly's decision to amend Senate Bill 492. PGE, however, wasn't alone.

Fellow utility stocks Edison International and Sempra declined 9.5% and 1.5%, respectively.

The main issue for Wall Street is that the amended legislation doesn't include California Gov. Gavin Newsom's proposal that would block insurance companies from suing utilities over wildfire-related legal claims.

PGE, in a written statement on Sunday, said the legislation would make some progress in helping wildfire survivors recover but that it "falls short of creating the long-term durability needed to attract affordable investment to support a safer, more reliable energy system and help keep costs down for customers."

A handful of Wall Street firms also let their discontent be known.

Mizuho Securities analyst Anthony Crowdell wrote Monday the state legislature "largely blocked" Newsom's push to shield utilities, barred hedge funds from "claim trading," prohibited executives from receiving bonuses if a utility starts a wildfire that destroys 500 or more structures, and that, overall, the bill isn't good for investors.

"We view this bill as insufficient in shifting liability from utilities, more focused on victim protections without any new investor protections," Crowdell wrote.

Crowdell downgraded PGE to Neutral from Outperform and cut his price target on the stock to $16 from $21. The analyst also downgraded Edison International and Sempra to Neutral from Outperform.

Write to Kit Norton at kit.norton@barrons.com

This content was created by Barron's, which is operated by Dow Jones Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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August 31, 2026 07:26 ET (11:26 GMT)