Edison International – LA-area wildfires ignite concerns over potential liability based on limited insurance resources – 3Q24 Credit Report
Before we get into things, we want to send our well-wishes out to all of those impacted by the devastating wildfires in the Los Angeles area. Writing a report like this can feel a little like grave dancing, and reading it may also feel the same. Nothing herein is intended to make light of this very sad situation, and we hope those of you reading this analysis will take the time to donate to help those in need. If you feel so inclined, this link will take you to the official website of the City of Los Angeles.
Please see the EIX 3Q24 Excel File for the long form capital table as well as related notes.
Overview
Edison International (NYSE: EIX) is the ultimate parent holding company for Southern California Edison Company (“SCE”), and Edison Energy Group.
SCE is a California investor-owned public utility that was incorporated in 1909. This business supplies and delivers electricity through its electrical infrastructure to a roughly 50,000 square-mile area of southern California and served approximately 5.3 million customer accounts in this service area as of YE2023. Based on YE2023 results, residential customers comprised ~87% of customer accounts and accounted for ~40% of electrical energy sales revenue, while commercial customers comprised ~12% of total customer accounts and accounted for ~46% of electrical energy sales. SCE accounts for nearly 100% of EIX’s operating revenues.
SCE’s financial performance has been materially impacted by the 2017/2018 wildfire and mudslide related litigation and related settlement costs. As highlighted below, total pre-tax charges to date amount to more than USD 7.5bn.