One bill in Sacramento torched billions in utility market cap.
PG&E fell as much as 21%, Edison 23%, its worst day since 2018. California's new wildfire bill updates response but leaves the liability sitting on the utilities, the one thing investors were begging to avoid. Three… pic.twitter.com/0uAx763bvq
— Kurt S. Altrichter, CRPS® (@kurtsaltrichter) August 31, 2026
California passes wildfire bill without the liability shield
SB 492 passed without Newsom’s proposed protections that would have restricted insurers from pursuing utilities for wildfire losses.
The legislation also failed to include the proposed $6 billion per-incident cap on withdrawals from the state wildfire fund.
That was the trigger for the selloff.
Three major downgrades hit PG&E
BMO, Mizuho and Wells Fargo all downgraded PG&E.
BMO called the remaining exposure open-ended wildfire-related tail risk.
PG&E itself said the legislation doesn’t adequately address its financing risks or provide the durable framework needed to attract affordable capital.
Edison suffers its biggest one-day loss in more than 25 years
Edison fell about 23%.
PG&E dropped roughly 20%.
The market reaction shows investors aren’t treating this as a minor regulatory disappointment. They’re treating it as a change in the expected economics of owning these utilities.