Shares of Edison International have dropped by 13% amid fear and uncertainty surrounding the wildfires in California. Southern California Edison, a subsidiary of Edison International, is the power utility for areas surrounding Los Angeles where multiple fires are burning. Tens of thousands of people have been evacuated, and two fatalities have been reported. Nearly 70,000 Edison customers were without power. While no public information ties Edison to the fires, there are reports of its equipment being impacted.
Public utilities in California have been dealing with wildfire prevention and readiness issues for years, with previous wildfires linked to power equipment problems. Pacific Gas and Electric Company filed for bankruptcy in 2019 due to wildfire liability but exited bankruptcy in 2020 under a new state law limiting utility liability.
Despite investor nervousness, analysts believe that the liability protections under AB 1054 limit the risks for utilities. Other California utility stocks were also down on Wednesday, with PG&E falling by 4% and Sempra by 3%. Sempra’s SDG&E shut off power to 7,000 customers due to fire risks. Overall, the market remains cautious due to the ongoing fires and potential financial impacts on utility companies.
Photo credit
www.nbcnews.com
