Executives at Edison International are warning that a lack of wildfire liability reform in California could have far-reaching financial consequences, including potential impacts on credit ratings across multiple sectors.
Speaking during the company’s first-quarter earnings call, President and CEO Pedro Pizarro emphasized the urgency of legislative action.
“Let me be very clear, our singular focus today is on 2026,” Pizarro said. “[If] we don’t see legislation this year, I think it’s quite likely we would see, for example, credit rating impacts not only for utilities or insurance companies, but you could see it in other sectors in the state. You could see it for the state’s own financing authority.”
The warning comes as California policymakers consider new approaches to managing wildfire risk and utility liability. A recent report from the California Earthquake Authority outlined several potential pathways to improve catastrophe resilience.
Among the recommendations are community-wide wildfire hardening measures, expanded insurance coverage and strengthening financial support mechanisms such as the state’s Wildfire Fund. The report also suggested charging premiums for participation in the fund and potentially expanding its coverage to additional entities.
Pizarro praised the report’s comprehensive approach but reiterated the need to return to a cost-of-service model for regulated utilities.
“We also recognize that there could be a lot of different ins and outs and ideas that folks throw out, so we will continue to engage with all the stakeholders and evaluate any and all packages on their merits at the time,” he said.
The company continues to face significant financial exposure tied to wildfire-related claims. Its subsidiary, Southern California Edison, has offered more than $500 million to nearly 3,800 claimants through its Wildfire Recovery Compensation Program related to the 2025 Eaton Fire.
To date, about 1,000 of those offers have been accepted. The company has received 3,200 claims involving more than 9,500 individuals and entities.
Executives said it remains too early to estimate the total cost of the program or overall liability associated with the fire.
In addition, Edison International and Southern California Edison have been named in approximately 2,000 lawsuits tied to the Eaton Fire, representing around 30,000 plaintiffs, including local governments and federal entities. The first jury trial is scheduled for January 2027.
The company also faces 101 additional lawsuits related to other wildfires and disasters dating back to 2017, underscoring the long-term complexity of wildfire litigation.
Despite ongoing legal and regulatory uncertainty, Edison International is maintaining its long-term growth outlook. The company expects electricity demand to grow between 30% and 40% through 2035, driven by electrification and broader energy consumption trends.
Its five-year capital plan remains unchanged at between $38 billion and $41 billion. Additionally, the company has requested $3.1 billion to fund advanced metering infrastructure aimed at improving grid resilience and enabling AI-driven operational efficiencies.
While 2026 is expected to be relatively quiet from a regulatory standpoint, the company plans to file its next general rate case in 2029.
As California continues to grapple with wildfire risks, utility leaders say the outcome of ongoing policy discussions will play a critical role in shaping the financial stability of the energy sector and the broader economy.
Originally reported by Emma Penrod in Utility Dive.
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