Edison International's quarterly profit falls as L.A. wildfire investigations continue
Multiple wildfires in January scorched tens of thousands of acres across Los Angeles in what is expected to have been the most costly natural disaster in U.S. history, and the area's electric utilities have come under increasing scrutiny.
While wildfires can cause extensive power outages by damaging power lines and infrastructure, they can also originate from these power lines.
Southern California Edison (SCE), Edison International's subsidiary, is facing multiple lawsuits, which allege that its electrical equipment started one of the major wildfires in the Los Angeles area – the Eaton fire.
While investigations into the cause of the Eaton Fire are going on, lawsuits have honed in on SCE transmission infrastructure in the hills above the community of Altadena as starting the blaze.
"SCE is not aware of evidence pointing to another possible source of ignition," Edison CEO Pedro Pizarro said on a company earnings call. "Absent additional evidence, we believe that SCE equipment could have been associated with the ignition."
The company attributed the earnings decline primarily to higher operations and maintenance expenses and the net impact of regulatory decisions at Southern California Edison (SCE). Higher interest expenses at the parent company level also contributed to the decrease.
SCE said it expected to invest $6.2 billion to prevent wildfires being caused by, or affecting, its system.
The company also plans to launch a wildfire recovery compensation program.
California has a wildfire fund that protects utilities like SCE from wildfire liability. On Wednesday, Bloomberg News reported that California Governor Gavin Newsom was proposing legislation to bolster the state's fund with an additional $18 billion for utilities.
Electricity ratepayers would contribute half the money through a monthly fee while the other half would be funded by utility companies that benefit from the fund, including Edison International, the report said.
The company reaffirmed its forecast for adjusted earnings between $5.94 per share and $6.34 per share for 2025. Analysts expect $6.06 per share.
The Rosemead, California-based company, posted second-quarter net income of $343 million, or 89 cents per share, compared with $385 million, or $1.14 per share, a year earlier.
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