After its stock plummeted over its possible role in California’s deadly wildfires, the state’s largest utility won back some investor confidence on Friday after its chief regulator offered a backstop.

Shares in the company, Pacific Gas and Electric Company, which serves most of the state’s northern half, had plunged over concerns that it could face insolvency over liability claims arising from the fires.

But analysts upgraded the stock after the president of the California Public Utilities Commission said the regulatory agency would take into account any financial liabilities PG&E incurred from the fires when setting rates.

The official, Michael Picker, said the commission had authority to do so under a state law enacted in September. The legislation, Senate Bill 901, included a shield against wildfire-related liability, allowing the utilities to pass the cost of damage claims — though not regulatory or criminal penalties — to customers.

“The C.P.U.C. is one of the government agencies tasked with ensuring that investor-owned utilities operate a safe and reliable grid,” Mr. Picker said in a statement. “An essential component of providing safe electrical service is the financial wherewithal to carry out safety measures.”

The commission is reviewing the “safety culture” at PG&E after a natural gas pipeline explosion in 2010 in the San Francisco Bay Area. Mr. Picker added that the commission would expand its review to scrutinize the company’s role in causing wildfires, including one that has left virtually the entire Northern California town of Paradise in ashes. A faulty power line owned by PG&E is the subject of an investigation into the blaze, known as the Camp Fire, about 90 miles north of Sacramento.

If PG&E or its equipment were found at fault, it would be the second time in two years that the utility was determined responsible for major California wildfires.

A Citigroup analyst this week estimated PG&E’s liability exposure at $15 billion a year for 2017 and 2018 in the fires that have left scores dead and destroyed thousands of homes and businesses. The company has said its insurance policy would cover less than 10 percent of that amount.

PG&E said Friday that Mr. Picker’s statement had affirmed “that an essential component of providing safe electrical service is long-term financial stability.”

As PG&E’s shares plunged this week, investors were hungry for information about how California’s politicians and the utilities commission might respond to the financial pressures on the company.

On Thursday afternoon, Bank of America Merrill Lynch held an hourlong call for investment clients in which Mr. Picker took part.

Edward Randolph, director of the commission’s energy division, who was also on the call, said the officials had stressed that it was not in the interest of PG&E customers to allow the utility to go into bankruptcy.

“It creates a lot of uncertainty around the companies’ ability to have access to cash to have money, which is critical for the utility to buy electricity and to buy natural gas,” Mr. Randolph said in an interview Friday. “Absent a road map to a smooth transition to an alternative to PG&E, we still need an entity in Northern California that can provide electric and gas service.”

So the commission’s representatives told the investors that they intended to make any liability for fires in 2017 and 2018 part of a single review in considering the effect on customer rates. Such a review would take place in four or five years, after claims have been litigated.

Although the investor call was not publicly announced, word of it filtered out after the market closed on Thursday. The commission later issued a news release.

Earlier in the week, a spokesman for the legislation’s sponsor said the recently enacted law focused on 2017 — when fires devastated California’s main wine region — and on years to come, without a specific provision for fires this year. But Mr. Randolph said that because the law allowed consideration of the utility’s financial health in setting consumer rates, the commission could take any liability from this year’s fires into account.

Praful Mehta, a Citigroup analyst whose estimates of PG&E liability had been widely cited, said the unusually aggressive effort to show support for the utility indicated the commission’s confidence that other state authorities backed its position.

“It was pretty clear that the C.P.U.C. statements drove this recovery,” Mr. Mehta said. “I would say that I think the C.P.U.C. would not make such bold statements of support without having some form of blessing to back up their statement.”

PG&E’s shares fell 30 percent on Thursday, their sixth straight decline. On Friday, after the commission’s reassurance, they rose 38 percent, to $24.40, though they are still down by half since last week.

Even as the stock moved higher, Moody’s Investors Service and Fitch Ratings downgraded the company’s bonds, citing continuing questions about whether a legislative shield would indeed apply to liability in this year’s fires.

Jamie Court, president of the advocacy group Consumer Watchdog and a frequent critic of state regulators, also took issue with the commission’s interpretation of the new law, saying that PG&E should be held accountable for any harm it is found to have caused.

“For the last decade and a half, governors and public utility commissioners have tried to keep utilities out of bankruptcy by coddling them,” he said.

Mr. Court and others have said that ratepayers should not be held financially responsible for a utility’s failure to maintain its equipment or trim trees around power lines, which have been identified as sources of wildfires.

“This is not rocket science,” Mr. Court said. “This is gardening. They’re coming to the taxpayers or the ratepayers for their own negligence.”

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