California utility stocks suffered their most severe trading session in years on Monday, with shares of major power companies tumbling sharply amid renewed concerns over wildfire-related liabilities.

Edison (EIX) saw its stock plunge more than 22% during the session, positioning it for the company's steepest single-day percentage decline since 2001. Meanwhile, Pacific Gas & Electric (PCG) dropped roughly 19% by midday trading, on track for its worst daily performance since 2020.

The sell-off comes after reports that California lawmakers rejected a bill proposed by Governor Newsom. The legislation was designed to shield utility companies from lawsuits filed by insurance firms over wildfire damages, and its failure has reignited fears of mounting financial exposure for the sector.

The market turmoil underscores the ongoing challenges facing utility operators in the state, as they grapple with the escalating threat of catastrophic wildfires and the legal and financial consequences that follow.