SEC Filings

California's Session Ended Without A Wildfire Fix, Edison Says, While Eaton Fire Settlements Hit $1.8 Billion

Edison's 10-Q says no wildfire bill passed, and Eaton Fire bellwether trials now run through September 2027.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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California's Session Ended Without A Wildfire Fix, Edison Says, While Eaton Fire Settlements Hit $1.8 Billion

Edison International, the parent of Southern California Edison, says in its 10-Q that California's 2025-2026 legislative session ended without enacting any of the policy options laid out in an April 2026 state report on wildfire risk. That leaves the utility leaning on the state-backed Wildfire Fund as Eaton Fire settlements grow to $1.8 billion.

A bigger ask, with a sense of urgency

The April report came from the California Earthquake Authority, which administers the Wildfire Fund. It set out options on community mitigation, sharing catastrophe costs and a state financing role, but did not recommend any. None became law, and neither Edison nor SCE can predict whether or when a comprehensive solution will come, the filing says.

The language has hardened since the second-quarter report. The new filing says the companies keep working with stakeholders to improve understanding of the "consequences of inaction" and move the process forward "with a sense of urgency."

The company's earnings release calls durable reform, including a shareholder liability cap not tied to the Wildfire Fund, a priority. The 10-Q also notes the report's warning that inaction could expose utilities to credit downgrades. SCE is rated Baa1 by Moody's, BBB by Fitch and BBB- by S&P, with Fitch and S&P outlooks negative.

Eaton Fire tab and trial calendar

As of September 30, SCE had recorded $1.8 billion in Eaton Fire settlement losses, up from $1.6 billion at June 30. It also booked expected recoveries of $859 million from the Wildfire Fund, $917 million from customer-funded self-insurance and $70 million through FERC rates. SCE has received $207 million from the Wildfire Fund so far.

SCE says the Initial Account of the fund should reimburse eligible losses above $1.0 billion. If the CPUC disallows costs, SCE's repayment is capped at a Liability Cap of about $4.3 billion, unless the fund administrator finds conscious or willful disregard, which SCE says has no basis. The company says it cannot yet estimate a range of Eaton losses, though more material losses are probable.

Bellwether jury trials are now set for January, May and September 2027, where the prior filing listed only January 2027. SCE has moved to push the January trial to June 2027. Fire investigators concluded in August that arcing on a de-energized idle SCE transmission facility ignited the fire, and SCE says it is likely its equipment was associated with the ignition.

Earnings slip from a strong 2025 base

Third-quarter net income was $724 million, or $1.88 a share, against $832 million, or $2.16, a year earlier. Core earnings were $738 million, or $1.92 a share, down from $901 million, or $2.34. The company attributes the drop to earnings booked in 2025 when the rate-case decision took effect retroactively.

Edison reaffirmed 2026 core earnings guidance of $5.90 to $6.20 a share. The CPUC has not yet issued a final decision applying the new wildfire prudency standard, as of October 22, and the ruling on SCE's motion to move the January trial is the next court marker.

The CPUC has not yet issued a final decision applying the wildfire prudency standard, and that ruling will shape how much of the Eaton Fire bill SCE can recover.

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