California utilities warn of shareholder actions if wildfire liability limits are not passed

Pacific Gas & Electric and Southern California Edison said they may take measures such as share buybacks or spending cuts to protect shareholders unless the state legislature approves a bill limiting their wildfire liabilities.

Top executives of California's two largest utilities told investors they could resort to shareholder-protective steps, such as share repurchases or reduced spending, if the state does not enact a bill limiting liability for equipment-sparked wildfires. Patti Poppe of PG&E and Pedro Pizarro of Edison International indicated that without a legislative framework, they would need to safeguard shareholder value, potentially at the expense of program funding.

Governor Gavin Newsom and legislators are considering a package based on an April study that would cap attorney fees and limit non-economic damages for fire victims, while also ending reimbursements to insurers. The push for reform intensified after the Eaton fire, which destroyed thousands of structures in Altadena and resulted in billions of dollars in claims against Edison. Utilities argue that a lack of liability protection could downgrade their credit ratings and raise electricity rates for customers. Survivor groups and insurers have criticized the proposed caps, fearing they would reduce compensation for those harmed by the fires.