California wildfire reform compromise exposes utilities to liability, sinks EIX

 

California wildfire reform compromise exposes utilities to liability, sinks EIX 15% premarket

• Lawmakers filed narrower SB 492 after Newsom dropped plan to bar insurers from suing utilities via subrogation, following opposition from survivors and legislators (per CalMatters, SacBee).
• Compromise fails to deliver full structural reform before Aug 31 legislative deadline, leaving SCE exposed to major wildfire claims and credit downgrade risks.
• Multiple analyst downgrades amplified pressure: Mizuho cut EIX to Neutral (PT $70 from $86), with Argus and Barclays also moving to Hold on liability uncertainty.
• Builds on ongoing concerns from Cal Fire report linking SCE equipment to 2025 Eaton Fire and recent high-volume selloff on Aug 28.
• Utilities like PG&E hit similarly hard in premarket as investors price in higher future borrowing costs and potential rate pressure on customers.
• SCE statement expressed disappointment, calling for comprehensive reform to protect affordability and grid investments.

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