US Utilities "California Gubernatorial Race and Stock Impacts" Orrill

Research evidence excerpt

US Utilities "California Gubernatorial Race and Stock Impacts" Orrill

Global Research

10 June 2026ab

US Utilities Equities

AmericasCalifornia Gubernatorial Race and Stock Impacts

Utilities

Gregg Orrill

What's Our Take? Analyst

On 6/9 the Associated Press called Republican Steve Hilton for the second spot in the gregg.orrill@ubs.com

general election along with Democrat Xavier Becerra. Narrowing of the field of +1-212-713 1064

candidates in the race should help reduce uncertainty for stocks. Candidate Tom Steyer William Appicelli, CFA

had promised 25% rate cuts and for a PCG break-up in a video released. Link We note Analyst

that Steyer has exited the race. The Gubernatorial election could add extra urgency this william.appicelli@ubs.com

year to an effort to pass wildfire legislation which would be most positive for Buy-rated +1-212-713 1414

PCG and Neutral-rated EIX and to a lesser degree Neutral-rated SRE. Steve Ludwick

Analyst

steve.ludwick@ubs.com

Wildfire legislation, less constructive regulation. We expect another push for legislation

+1-212-713 5073

with a goal to remove tail risk liability quantified as a $5-$10/month cost to customers if

nothing is done. The California legislature held hearings in May on reform Allison Paik

recommendations from Gov. Newsom's task force. We expect the offset to a reduction Associate Analyst

allison.paik@ubs.com

in tail liability risk is likely more accountability and potentially lower allowed ROEs which

+1-212-713 1078

are 9.93% to 10.03% in California and above the 9.7% granted in 1Q'26 cases shown

in our marketing deck. Link This risk reduction is potentially positive for PCG and

EIX where we embed wildfire liability discounts of 25% and which trade at 47% and

35% '28 P/E discounts, respectively.

Affordability.