The ratings agency cut the company's key rate five notches to "B'' from "BBB-." Shares have been weighed down since November and took a sharp dive Monday on bankruptcy speculation.
The utility, California's largest, is contending with potentially crippling liability costs related to California's Camp Fire. No cause has been determined, but investigators are looking into the potential it was sparked by a malfunctioned line.
S&P says it could lower the rating "one or more notches over the next few months" if the company continues to face regulatory or financial turmoil.