The chief executive of Edison’s parent company in Southern California said Tuesday that the company is likely to suffer “material losses” related to the fatal Eaton fire that caught fire on Jan. 7 and burned more than 14,000 acres.
Investigations into the cause of the fire are ongoing and have not concluded that Edison’s equipment caused the flames, Edison International CEO Pedro Pizzaro said in the company’s first quarter revenue call.
However, Edison’s probe at the start of the fire did not reveal any other possible sources of ignition, Pizzaro added.
“There is no additional evidence” and “In light of pending lawsuits, Edison International and Edison in Southern California could suffer significant losses in connection with the Eton Fire,” Pizzaro said.
Pedro Pizzarro, president and CEO of Edison International, is currently under the Bloomberg New Energy Finance Summit meeting in New York on April 16th.
(Jenna Moon/Getty Images)
Edison previously admitted that it could be the cause of the flames, and earlier this month said it could be due to dormant power lines.
However, Tuesday’s comments are the clearest signal to date that the company is likely to maintain a major loss from a catastrophic wildfire.
“It’s still very early here and today’s responsibility is simply not estimated,” Pizzaro said. “I don’t know when that will be estimated.”
Eaton Fire killed 18 people and destroyed thousands of homes and other structures. Early estimates cost $10 billion for damages, but experts said the number would increase. The total estimated economic loss caused by the January wildfires is over $250 billion.
Based in Rosemead, Southern California’s Edison is an investor-owned utility that provides electricity to approximately 15 million people in Southern California’s 50,000 square miles of region. In addition to the nation’s largest utility, Edison International also owns energy advisory firm TRIO.
The electrical transfer wires connect to the Vincent substation in Edison, Southern California, Palmdale.
(Gary Coronado/Los Angeles Times)
Overall, Edison International employs more than 14,000 people and was valued at around $30 billion before the January wildfire. The company’s valuation closed at $22.6 billion on Tuesday.
If Edison has to cover the damage caused by the Eaton Fire, the utility will be partially protected by an emergency fund created in 2019 by state legislators in the wake of previous wildfires. The fund is designed to protect utility companies from bankruptcy if the utility is liable for wildfires and has to make large payments.
Video of the flames at the foot of Edison Transmission Tower in Eaton Canyon at night raised suspicions that utility equipment was breaking down as a fire began to break out. Just months before the fire broke out, the state utility safety regulators raised questions about maintaining the Aging Transmission Line in Edison, Southern California, The Times reported. Edison’s equipment caused 178 fires in 2024.
“Unlike when we were dealing with TKM and Woolsey, we have a wildfire fund that we can access,” Edison International Chief Financial Officer Maria Rigatti said Tuesday.
The Emergency Fund is supposed to cover up to $21 billion in damages on behalf of utility companies, but as of December 2024, only $14.7 billion had accumulated.
Under state law, if a review finds that you acted carefully to prevent a fire, such as closing power to a power line in high winds, you don’t need to refund utility bills after using it, and using the Wildfire Fund. However, if Edison turns out to be rude, he will have to pay $4 billion back to the fund.
“Based on everything we know today and the information we review, we believe Edison in Southern California will create goodwill that it is wise,” Rigatti said.
On Tuesday, Edison International saw its first quarter net income of $1.4 billion, up from $1.13, a pre-$1.37.
The shares closed at $58.73 on Tuesday, with 26% up and down about half this year.
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