Edison CEO Warns of Downgrade Without Wildfire Reform
Get the Energy newsletter
Daily energy & climate — solar, EVs, oil, the policy fights and tech bets shaping the transition. Free.
- Edison International CEO Pedro Pizarro warned on Thursday's Q2 earnings call that California investor-owned utilities could face credit rating downgrades without wildfire cost reforms by Aug. 31, noting SCE's current S&P rating of BBB- leaves no room before falling to non-investment grade.
- Edison International updated its quarterly disclosures to state it "believes that it is likely that its equipment was associated with the ignition of the Eaton Fire," while Pizarro declined to estimate total potential Eaton Fire-related liability.
- Southern California Edison (SCE) has committed $1.6 billion to Eaton Fire victims via settlements and its Wildfire Recovery Compensation Program, which has paid $750 million to more than 5,400 of over 12,000 claimants; as of July 23, SCE was named in 2,000+ lawsuits with 32,000 individual plaintiffs, with the first jury trial set for January.
- The California Wildfire Fund could provide up to $21 billion to cover Eaton Fire claims, and the CPUC in April granted SCE permission to collect an additional $274 million to $650 million from customers this year for those costs.
- Edison International surprised analysts by disclosing the sale of clean energy consulting firm Trio at a $23 million loss, with Pizarro citing a "laser focus on Edison International" as rationale for divesting.
- Edison International shares were down about 5% in morning trading following the disclosures.
Why it matters: SCE sits one notch above junk at BBB-, and Pizarro warned that downgrades would pass higher borrowing costs to ratepayers on top of the $274-$650 million already being collected for the Eaton Fire. A 5% stock drop Thursday shows investors are pricing the Aug. 31 deadline.
