Edison International Crashes 23% as California Wildfire Bill Drops Utility Liability Protections

Edison International shares plunged roughly 23 percent on August 31, 2026, their worst single-day decline since 2001, after California lawmakers advanced an amended wildfire bill over the weekend that omits liability protections investors had counted on. The legislation notably does not cap utility liability for wildfire damages and does not forbid insurers from filing subrogation lawsuits against electric utilities that cause wildfires, leaving companies like Edison fully exposed to claims from insurer recoveries.

PG&E fell 18 to 19 percent on the same news, while Sempra Energy dropped more than 2 percent. Bonds of both PG&E and Edison broadly weakened as the market repriced wildfire liability risk across California's investor-owned utilities. The sell-off made Edison International the biggest loser in the S&P 500 on the day and for the month of August.

Mizuho downgraded Edison International to Neutral from Outperform and cut its price target to $70 from $86, citing the wildfire reform failure. Mizuho applied identical downgrades to PG&E, cutting its target to $16 from $21, and to Sempra, cutting its target to $84 from $104. BMO Capital and Wells Fargo also downgraded PG&E, with BMO setting a $21 target and Wells Fargo setting a $24 target. Options activity in Edison surged as the session wore on, reflecting elevated uncertainty over future wildfire liability exposure.