California utility shares tumble as wildfire bill fails to ease liability risks

California's utilities have faced growing wildfire-related liabilities, with PG&E emerging from bankruptcy in 2020 after its equipment was linked to several deadly fires.

The state created a $21 billion Wildfire Fund to help cover future claims, while utilities have pushed for broader reforms to reduce their exposure to wildfire costs.

The legislation also preserves insurers' ability to recover wildfire-related payments from utilities and bars private equity groups from buying wildfire claims or funding wildfire advertising.

"We reached a compromise that blocks hedge funds from profiteering off wildfire survivors, bars utility executives from taking bonuses when their company ignites a fire, and gets money into survivors' hands faster," California Governor Gavin Newsom said in a statement.