PG&E, Edison Head for Biggest Stock Drop in Years on California Wildfire Legislation -- WSJ

By Caitlin McCabe

Shares of publicly traded utilities are tumbling this morning after an effort by California Gov. Gavin Newsom to shield the sector from wildfire-related lawsuits was rejected by state lawmakers.

-- California utility PG&E shares tumbled 19%, on pace for their biggest drop since the Covid-19 selloff of March 2020.

-- Other California-based utility stocks also sank, including Edison International. Its shares are down 20%, on pace for their biggest loss in more than 25 years.

Newsom and California lawmakers have clashed this month over updates to the state's wildfire response. The administration initially proposed blocking insurance companies from suing utilities over wildfire claims-a move proponents argue is necessary to prevent higher electricity bills for California residents and to prevent utilities from facing bankruptcy.

Ultimately, that proposal was rejected, and Newsom and lawmakers agreed on a narrower package of reforms over the weekend. That includes a provision prohibiting Wall Street firms from trading wildfire claims.

In a statement, PG&E said the bill, which will be voted upon this week, "would not provide the sustainable solution California needs."

Wall Street analysts moved to downgrade PG&E stock today. BMO Capital analyst James M. Thalacker cut the company from a version of buy to hold, with a $21 price target. The target "now reflects assumptions for uncapped future wildfire liability post-2030," he said.

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August 31, 2026 10:17 ET (14:17 GMT)