Shares of PG&E Corp., Edison International and Sempra plunged Monday after unfavorable California wildfire legislation prompted a wave of analyst downgrades. California lawmakers introduced a bill on Saturday that would update the state's wildfire response, but would not shift liability away from publicly traded utilities, leading to at least three analysts cutting their recommendations on utilities stocks.

California Governor Gavin Newsom and investors had advocated for the utilities to be shielded from wildfire-related lawsuits.

The legislation has raised concerns among investors about potential financial exposure for utility companies operating in fire-prone regions of California.

Market watchers expect continued volatility in utility stocks until the final version of the wildfire bill is enacted.