ROSEMEAD, Calif. - Southern California Edison (SCE), a subsidiary of Edison International (NYSE: NYSE:EIX), is conducting a detailed investigation into the origins of the Eaton (NYSE:ETN) and Hurst wildfires that began on January 7, 2025. The utility, currently valued at $20.3 billion, has submitted updates on its analysis to the California Public Utilities Commission (CPUC), as per state reporting requirements. According to InvestingPro data, Edison International maintains a FAIR financial health score despite operating with significant debt obligations.
SCE has not yet determined the ignition cause of the Eaton Fire and continues to examine all possibilities, including any potential involvement of its equipment. Despite no clear indicators such as broken conductors or arc marks, SCE is taking seriously the suggestions of a link to its infrastructure, based on external video evidence from the early stages of the fire. The Los Angeles County Fire Department, leading the investigation with support from other agencies, is working in tandem with SCE to analyze grid data, maintenance records, and recovered material to ascertain the fire's cause.
The investigation is expected to span several months, including thorough equipment inspections and testing in the fire's area of origin. Meanwhile, SCE has deenergized transmission lines and plans to lower power lines near the preliminary origin area for closer inspection.
Regarding the Hurst Fire, which burned approximately 799 acres before being contained on January 16, SCE has acknowledged the possibility of its equipment being involved. The Los Angeles Fire Department is currently investigating the cause, with SCE's cooperation.
Edison International's CEO, Pedro J. Pizarro, expressed sympathy for those affected by the fires and emphasized SCE's commitment to a transparent investigation and community rebuilding efforts. SCE has already deployed significant resources in response to the fires, including installing power lines, setting poles, and replacing transformers. The company's stock has faced significant pressure, declining 34.4% over the past six months, though it maintains a strong 6.31% dividend yield and has sustained dividend payments for 22 consecutive years. InvestingPro subscribers can access 12 additional expert insights about Edison International's financial outlook and market position.
Edison International has also pledged $1 million to aid wildfire relief efforts, with an initial distribution of $350,000 to various organizations. SCE continues its investments in wildfire prevention and grid hardening and has implemented customer protections and financial assistance in declared State of Emergency areas.
This news is based on a press release statement from Southern California Edison.
In other recent news, Edison International has seen its stock price target revised by several analyst firms in response to the company's involvement in the recent California wildfires. Jefferies reduced the target from $93 to $69, maintaining a Buy rating, while Barclays (LON:BARC) lowered the target from $76 to $67, continuing to rate the company as Overweight. In contrast, Evercore ISI maintained a positive stance, keeping the target at $77 and reaffirming an Outperform rating.
S&P Global Ratings revised Edison International's credit rating outlook to negative due to potential risk for the California wildfire fund's depletion. The negative outlook reflects the potential for significant depletion of the fund due to the extensive damage caused by the Eaton fire and the possibility that Edison’s equipment may be linked to the fire.
Edison International is actively cooperating with authorities and has promised to provide updates as more information becomes available. The company's preliminary investigation has not found any evident damage to its equipment, but the company is continuing to thoroughly assess the condition of its infrastructure.
These are recent developments for Edison International, a company that has been in the spotlight due to its potential involvement in the recent Eaton wildfire. The company's financial health and future expectations have been a topic of discussion among various analysts and investors.
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