SB 492 rejection leads to utility stock plummet

SACRAMENTO, Calif., Sept. 1, 2026 /CourierPR/ -- Wildfire survivors and consumer advocates celebrated the death of SB 492, a bill that aimed to provide bailout protections to California’s utility companies. The legislation was rejected after months of intense negotiations, as utility companies demanded even more favorable terms than the initially proposed compromise.

Yesterday’s vote was met with a significant stock market reaction, with Pacific Gas and Electric (PG&E) shares plummeting by 20% and Edison International dropping 23%. These steep declines have fueled discussions about the financial risks these utilities pose to California and its residents.

"California has shown it won't backstop the catastrophic fire risk these companies continue to impose on our state," said Joy Chen, executive director of Every Fire Survivor's Network. "This rejection of SB 492 sends a clear message to Wall Street that these utilities can no longer rely on ratepayers and taxpayers to bear the brunt of their negligence."

According to a statement from Jamie Court, executive director of Consumer Watchdog, "The utilities would rather kill the bill than accept a compromise that rejected the bailout they sought. The fall in stock prices is not a sign that California needs another utility bailout; it's a reflection of Wall Street’s lack of confidence in these companies' ability to prevent future wildfires."

The utilities in question have a history of causing some of the most destructive wildfires in recent history. Data from Aon shows that Edison and PG&E were responsible for three of the five most costly wildfires ever recorded globally, including the Eaton, Camp, and Woolsey fires.

Despite their profitability, these companies have not faced the same scrutiny as their peers. Sempra Energy, for instance, has not experienced the same stock downturn, even after its own wildfire history. SDG&E, a subsidiary of Sempra, has invested heavily in wildfire prevention, a strategy that appears to have won favor with investors.

"These utilities have reaped billions in profits and paid substantial dividends, yet their CEOs have been rewarded with nearly $60 million in compensation," said Chen. "Shareholders should own the risks and consequences of their companies' actions, not rely on ratepayers and taxpayers to cover their mistakes."

California regulators have already taken steps to address the financial risks posed by these utilities. In 2026 through 2028, the California Public Utilities Commission (CPUC) authorized returns on equity of 10.03% for Edison and 9.98% for PG&E, enabling them to attract capital and finance infrastructure.

"Wall Street is seeing the difference between companies that invest in prevention and those that continue to cause fires," said Court. "California should not rely on another bailout to fix the problem. Instead, Edison and PG&E should focus on preventing fires and earning back Wall Street's trust."

In conclusion, the rejection of SB 492 reflects a growing expectation that utilities must take responsibility for their actions and invest in preventing future disasters. The financial market reaction underscores the need for these companies to prioritize safety over profits.