PG&E, Edison, Sempra stocks plunge on
Shares of California utility companies PG&E, Edison International, and Sempra fell sharply on August 31, 2026, after state lawmakers proposed a bill
Shares of PG&E Corp. fell 20% on August 31, 2026, heading for their worst single-day drop since March 2020. The sell-off, reported by MarketWatch, dragged down other California utility stocks after state lawmakers failed to pass legislation shifting wildfire liability away from the companies.
Analysts at Mizuho said the proposed bill is more focused on victim protections without any new investor protections. Governor Gavin Newsom had pushed to move the liability burden to insurance companies, but that effort failed to gather enough support before the state legislature's session ended. Newsom's term ends in January 2027.
Analyst Downgrades and Market Reaction
Mizuho analysts downgraded their ratings on PG&E, Edison International, and Sempra to the equivalent of hold from buy. Analysts at BMO and others on Wall Street followed suit. The table below shows the stock performance mentioned in the source.
| Stock/ETF | Symbol | Performance Noted |
|---|---|---|
| PG&E Corp. | PCG | Down 20%, worst day since March 18, 2020 |
| Edison International | EIX | Down 23.74%, worst day since April 6, 2001 |
| Sempra | SRE | Down 3.33% |
| iShares U.S. Power Infrastructure ETF | POWR | Down 0.98% |
Edison International was the worst performer in the S&P 500 index on Monday afternoon. PG&E's losses erased its year-to-date gains. While the California utilities trade at very attractive valuations, we see limited catalysts, the Mizuho analysts said. For a broader view of the market, see our standings.
Concerns Over Legislation and Liability
The BMO analysts said the proposed legislation does nothing to ensure the wildfire fund's long-term solvency. This exposes investors to what they called open-ended wildfire risk. They noted there is no current support to revisit this critical deficiency. This uncertainty is a key factor for investors reviewing our stats on utility performance.
In a statement, PG&E said the bill would not provide the sustainable solution California needs. The company argued it fails to address financing risks and falls short of creating long-term durability to attract affordable investment. A company spokesperson pointed to a scheduled investor call on Wednesday to discuss developments.
Path Forward and Company Strategy
The path forward is unclear. Analysts at Citi said they expect PG&E to cut its capital-investment program and reallocate money towards dividends, stock buybacks, and debt reduction. They also expect the company to try to reengage politicians in Sacramento next year.
This outcome is disappointing given the amount of work that went into this process over the last two years and how close a constructive outcome seemed to be, the Citi analysts added. They said the path forward is very uncertain given the spent political capital and Newsom's impending departure.
Even a revised capital-allocation strategy might not be enough to improve investor sentiment, according to the BMO analysts. PG&E emerged from bankruptcy in 2020 after seeking protection in 2019. The company has been implicated in several wildfires, including the 2018 Camp Fire that destroyed the town of Paradise, California. State officials said that fire resulted in 85 fatalities and destroyed more than 18,000 structures.
