Shares of PG&E Corp. (NYSE:PCG) are trading lower during Friday afternoon. The stock is facing selling pressure following reports that state lawmakers rejected Governor Gavin Newsom’s legislative effort to shield utilities from subrogation claims by insurance companies.
- PG&E shares are sliding. What’s weighing on PCG shares?
Legislators Reject Plan to Ban Subrogation Claims Against Utilities
Friday’s decline stems directly from a legislative stalemate in Sacramento ahead of the August 31 session deadline. Governor Newsom had proposed ending subrogation, a legal process allowing insurance companies to recover financial losses from utilities when power equipment sparks a wildfire.
Legislative leaders in both the Assembly and Senate formally rejected the proposal after insurance executives warned that shifting liability to insurers would cause property insurance premiums to surge statewide.
Wildfire Fund Vulnerability and Remaining Proposals
The rejection preserves the status quo, leaving utility balance sheets and the state’s ratepayer-funded $21 billion Wildfire Fund exposed to future subrogation suits. Investors had hoped the liability cap would protect shareholder equity and cash reserves in the event of major catastrophic blazes.
An internal memo from the governor’s office acknowledged there was no path forward for the larger structural liability reform before the legislative session ends.
Lawmakers still support narrower provisions, including banning utility CEO bonuses if company equipment causes a fire, creating a fast-pay victim payout framework and prohibiting hedge fund speculation on wildfire claims.
PCG Shares Slide Friday
PCG Price Action: PG&E shares were down 7.63% at $16.58 at the time of publication on Friday, according to Benzinga Pro data.
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