Edison International Swings 23% as California Wildfire Liability Bill First Passes Then Dies in One Session Day

Edison International shares plunged as much as 23% on September 1, falling to roughly $54.22 intraday, after California lawmakers advanced Senate Bill 492, a wildfire reform measure that stripped out the liability protections utilities had counted on before the legislative session closed. PG&E fell roughly 18% to $13.57 at the same time, with both stocks recording their steepest single-day drops in years. The bill would change how wildfire and recovery claims are handled but left out the financing framework and liability cap that utilities argued they needed to support continued grid investment.

Wall Street moved quickly to reprice the California utility sector. Bank of America downgraded Edison International from Buy to Neutral and cut its price target to $51 from $81, citing the elevated wildfire liability risk now left unaddressed by the legislature. BofA made a parallel move on PG&E, downgrading it from Buy to Neutral and slashing its target to $13 from $24. UBS separately cut its price target on Edison International on the same wildfire legislation setback, though it did not change its rating. Options markets reflected the uncertainty, with Edison International appearing on lists of names with sharply rising implied volatility and unusual call volume, including notable activity in September 60 strike calls.

The selloff reversed course by early evening. Barron's reported that California lawmakers ultimately killed the wildfire bill before the session ended, removing the immediate legislative threat. Edison International and PG&E shares rebounded on the news, though both remained well below their prior closing levels. The episode left the liability question unresolved heading into the next legislative cycle, with California utilities still facing unmitigated exposure from wildfire damages where their equipment is alleged to be a contributing cause.