- Company name
- Edison International
- Sector
- Utilities
- About
- Edison International is the parent of Southern California Edison (SCE), an electric utility that serves about 15 million people through 5 million customer accounts in Southern, Central and Coastal California. SCE owns the wires: it transmits and distributes electricity, and it buys most of the power it delivers. The California Public Utilities Commission (CPUC) sets about 85% of SCE's rates, and the Federal Energy Regulatory Commission (FERC) sets the rates for transmission. Regulators let SCE earn a set return on its rate base, which is the value of the grid it builds. The rate base was about $50.8 billion in 2025, and Edison forecasts about 7% growth a year to 2030 from a capital program of $38 billion to $41 billion for 2026 to 2030. Edison has raised its dividend for 22 years in a row.
- Thesis
- Edison trades at a discount because investors cannot measure its liability for the January 2025 Eaton Fire, and California did not pass the law that would limit that liability. On August 4, 2026, the county and state fire investigators concluded that arcing on an idle SCE transmission tower started the fire. SCE says that its equipment was likely associated with the ignition, and Edison says that it cannot yet estimate its total losses. On August 30, 2026, the final version of Senate Bill 492 left out the shield against insurer lawsuits and the cap on withdrawals from the state Wildfire Fund that the governor had proposed, and the bill did not pass. The stock fell 23% on August 31, 2026. For the gap to close, three things must happen. First, the Eaton Fire claims must settle at a cost that the Wildfire Fund and customer-funded insurance can cover, as the voluntary compensation program and the first trials show. By September 30, 2026, SCE had settled claims for $1.8 billion, almost all covered by these sources. Second, California must pass wildfire reform that limits utility liability and refills the Wildfire Fund before it ends in 2028. Third, SCE must keep its investment-grade ratings and grow core EPS 5% to 7% a year without new shares. The tests come in order: the claim deadline of the compensation program on November 30, 2026, the first Eaton Fire jury trial, set for January 2027 (SCE asked the court to move it to June 2027), and the 2027 legislative session with a new governor. If reform passes in 2027, the gap can close over the next four to eight quarters. The main risk is a large Eaton Fire verdict or a new fire caused by SCE equipment before reform passes.
- Risks
- The Eaton Fire of January 2025 killed 19 people and destroyed about 6,000 homes. At October 22, 2026, SCE knew of about 2,000 lawsuits with about 38,000 individual plaintiffs. Fire investigators concluded in August 2026 that arcing on an idle SCE transmission tower started the fire. Edison says that more material losses are probable, but it cannot estimate them. The first jury trial is set for January 2027, and SCE asked the court to move it to June 2027. The Los Angeles District Attorney's Office investigates whether criminal violations occurred. Fines and penalties, if any, cannot be recovered from insurance, the Wildfire Fund or rates.
California law sets how much wildfire cost a utility must pay. The legislature did not pass reform in 2026, the state Wildfire Fund ends in 2028, and no law refills it. If the CPUC finds that SCE did not act prudently, SCE must repay the fund up to about $4.3 billion for the Eaton Fire.
A new wildfire caused by SCE equipment can bring large new claims. California fires grow larger and more frequent, and the risk is highest in the fall wind season.
Edison's ratings are at the lowest investment-grade level, as the CEO said on September 21, 2026. Edison says that the absence of credit-supportive wildfire laws can lead to a downgrade. A downgrade raises the cost of debt and can require SCE to post collateral if a rating falls below investment grade.
Higher interest rates raise the cost of the large debt load and lower the value of a regulated return. Customer bills are high, so regulators can push back on new capital spending or on the return on equity.
- Balance sheet
- Cash: $171M
Debt: $41.6B
Net debt: $41.4B
Interest cover: 2.0×
Undrawn credit line: $4.6B, to May 2030
Debt due within 12 months: $2.6B
At September 30, 2026, Edison had $171 million of cash and $41.6 billion of debt: $0.8 billion of short-term debt, $1.8 billion of long-term debt due within one year and $39.0 billion of other long-term debt. The long-term debt includes $4.9 billion of securitization bonds that customers repay through a fixed charge. Most debt is at SCE, and the parent holds the rest. All long-term debt has a fixed rate. Interest cover is operating income divided by interest expense for the first nine months of 2026, which is low but normal for a regulated utility. SCE had about $3.2 billion available on its $3.4 billion credit facility, and the parent had $1.4 billion available on its $1.5 billion facility. Both facilities run to May 2030. Edison's consolidated debt to total capitalization ratio was 0.64 to 1, against a covenant limit of 0.70 to 1. SCE also holds $109 million of restricted cash from customer-funded wildfire self-insurance, which it cannot use for Eaton Fire claims. Edison's financing plan for 2026 to 2030 needs no new shares.
As of Sep 30, 2026.
- Checkpoints
- Oct 29, 2026: Q3 2026 results: Eaton Fire losses and guidance. Passed. Watch: Core EPS guidance of $5.90 to $6.20 kept and no large new Eaton Fire charge pass; a cut to guidance, a plan to sell new shares or a large new loss estimate fails. Outcome: Edison kept its 2026 to 2028 core EPS guidance and its plan with no new shares, and its $1.8 billion of Eaton Fire settlements left a net after-tax charge of only $9 million.
Nov 30, 2026: Eaton Fire compensation program: claim deadline. Pending. Watch: Most eligible claimants settle through the program at costs inside the self-insurance and Wildfire Fund coverage passes; most claims staying in court fails.
Jan 29, 2027 (estimate): Q4 2026 results: Eaton Fire losses and guidance. Pending. Watch: 2026 core EPS within $5.90 to $6.20, 2027 guidance kept and no plan to sell new shares pass; a cut to guidance, new shares or a large new loss estimate fails.
Jan 2027 (estimate): First Eaton Fire jury trial (SCE asked to move it to June 2027). Pending. Watch: A verdict or settlements near the program's values pass; a large verdict that raises the expected total cost far above the Wildfire Fund coverage fails.
2027 (estimate): California wildfire reform in the 2027 legislative session. Pending. Watch: A law that limits utility liability or refills the Wildfire Fund before it ends in 2028 passes; no law, or a downgrade of SCE below investment grade, fails.
- Recent events
- Oct 29, 2026: Edison reported Q3 2026 results. GAAP EPS was $1.88, and core EPS was $1.92, against $2.34 a year earlier, when SCE recorded catch-up earnings from its 2025 rate case. Edison kept its 2026 core EPS guidance of $5.90 to $6.20, its 2027 guidance of $6.25 to $6.65 and its target of 5% to 7% core EPS growth a year to 2030, with no new shares. SCE had recorded $1.8 billion of Eaton Fire settlements by September 30, 2026, with expected recoveries of $917 million from customer-funded insurance, $859 million from the Wildfire Fund and $70 million through FERC rates. Edison still cannot estimate its total Eaton Fire losses. Bellwether jury trials are set for January, May and September 2027, and SCE asked the court to move the January trial to June 2027.
Oct 13, 2026: The short seller Muddy Waters said that it is short Edison. It claims that SCE knew for about five years that its wildfire risk model did not handle high winds well, and that a court can find willful misconduct in the Eaton Fire. It estimates fire damages of at least $4 billion, and a liability of about $20 billion if a court finds willful misconduct. These are the short seller's claims, not findings. Edison has denied negligence or wrongdoing, and it says that it cooperates with the investigations into the cause of the fire. The stock fell more than 3% that day, Reuters reported.
Sep 17, 2026: SCE said that its Wildfire Recovery Compensation Program for the Eaton Fire had nearly 4,800 claims. It had made more than 2,700 offers, worth nearly $950 million, and paid more than $500 million. The deadline to submit a claim is November 30, 2026.
Aug 31, 2026: The stock fell 23%, its largest one-day drop in more than 25 years, after the California legislature removed the utility liability limits from Senate Bill 492. The bill did not pass before the session ended.
Aug 30, 2026: SCE said that the amended Senate Bill 492 does not deliver durable wildfire reform. It said that it will work with the next governor and legislature on a full solution.
Aug 4, 2026: The Los Angeles County Fire Department and CAL FIRE released their Eaton Fire investigation reports. They concluded that an electrical arcing event on an idle, de-energized SCE transmission tower started the fire. SCE said that it reviews the reports. The Los Angeles District Attorney's Office investigates whether criminal violations occurred.
Jul 30, 2026: Edison reported Q2 2026 results. GAAP EPS was $1.39, and core EPS was $1.54, against $0.97 a year earlier. It kept its 2026 core EPS guidance of $5.90 to $6.20 and its target of 5% to 7% core EPS growth a year from 2025 to 2030, with no new equity in its financing plan.
Jul 3, 2026: Aaron Moss, the CFO of SCE, became CFO of Edison International. He replaced Maria Rigatti, who retired on September 1, 2026.
Apr 30, 2026: Edison International agreed to sell $500 million of 5.00% senior notes due 2028.
Apr 28, 2026: Edison reported Q1 2026 results. GAAP EPS was $1.38, and core EPS was $1.42. It kept its 2026 core EPS guidance of $5.90 to $6.20.