California lawmakers have rejected Governor Newsom's proposal to limit utilities' wildfire liabilities, sending shares down sharply. The legislation aimed to cap financial responsibility for power companies during fire seasons, but faced strong opposition from Democratic and Republican lawmakers alike. Critics argue the plan would shift too much risk to ratepayers and fail to address the root causes of wildfires.

The debate highlights the ongoing tension between protecting utility companies and ensuring they maintain infrastructure to prevent future disasters. Shares of major utilities fell following the legislative setback, reflecting investor concerns about future profitability and risk exposure in the state.