Edison CEO Warns of SCE Junk Rating Without Reform
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- Pedro Pizarro warned on Edison International's Q2 earnings call that SCE, currently rated BBB- by S&P, faces a downgrade to non-investment grade if California lawmakers don't pass wildfire reform legislation by Aug. 31, with higher borrowing costs passed through to customers.
- Edison International disclosed in its quarterly filings that it 'believes it is likely that its equipment was associated with the ignition of the Eaton Fire,' an admission that followed Pizarro declining to estimate total Eaton Fire-related liability.
- SCE's Wildfire Recovery Compensation Program has extended $750 million to more than 5,400 of over 12,000 claimants, with the company having committed $1.6 billion total to fire victims through settlements and the program.
- SCE was named in more than 2,000 lawsuits with 32,000 individual plaintiffs related to the Eaton Fire as of July 23, with the first jury trial scheduled for January.
- The California Wildfire Fund could provide up to $21 billion to cover Eaton Fire claims, and the CPUC in April granted SCE's request to collect an additional $274 million to $650 million from customers this year for Eaton Fire costs.
- Edison International separately disclosed the sale of clean energy consulting firm Trio at a $23 million loss, while reporting 60% carbon-free electricity delivery and 900 MW of energy storage purchases in 2025.
- Edison International shares were down about 5% in morning trading following the earnings call.
Why it matters: SCE's ratepayers are the backstop: Pizarro said any junk-rating-triggered increase in SCE's cost of debt gets 'passed through' to customers, stacking on top of the $274–650 million the CPUC just authorized SCE to collect this year for Eaton Fire costs. With four weeks until the Aug. 31 legislative deadline, the size of those costs is decided in Sacramento, not in the utility's boardroom.
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