Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  Edison International    EIX

EDISON INTERNATIONAL

(EIX)
  Report  
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsOfficial PublicationsSector newsAnalyst Recommendations

California Legislature Approves Multibillion-Dollar Wildfire Fund

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/11/2019 | 12:58pm EDT

By Alejandro Lazo and Katherine Blunt

SACRAMENTO, Calif. -- California lawmakers on Thursday approved a multibillion-dollar fund meant to stabilize the state's largest utilities amid fears of sizable future liability costs from deadly wildfires tied to their equipment.

The creation of the wildfire fund, one of the biggest challenges in the first year of Democratic Gov. Gavin Newsom's administration, is part of a broader regulatory overhaul meant to mitigate the crisis created when PG&E Corp. sought bankruptcy protection in January, citing more that $30 billion in potential liability costs stemming from its role in sparking wildfires.

The company's collapse sowed concern on Wall Street that the state's other large utilities, Edison International's Southern California Edison and Sempra Energy's San Diego Gas & Electric, may face similar fates. Credit-ratings firms threatened to downgrade them unless lawmakers moved to limit their liability exposure.

After concern among investors that lawmakers wouldn't pass the bill before beginning a month-long summer recess this Friday, a final version was hammered out late last week. It passed the state Senate Monday with a vote of 31-7 and the Assembly Thursday with a preliminary tally of 63 in favor and 9 opposed, winning bipartisan support in both houses. Mr. Newsom is expected to act quickly to sign the bill into law.

The legislation creates two routes for a wildfire fund -- one valued at $10.5 billion and another at $21 billion or more. The smaller proposal would be structured as a revolving loan funded by extending a surcharge on electricity bills and securitizing the revenue through state-issued bonds. The larger would include an insurance policy requiring a $10.5 billion contribution from the three utilities.

Southern California Edison and San Diego Gas & Electric will have 15 days upon enactment of the bill into law to choose between the two options. They are likely to coalesce on one plan, said people close to the companies.

PG&E can't participate in the decision-making process while it restructures in bankruptcy court, but will be bound by what the other two companies choose. The other two utilities are widely expected to select the larger option, which would require PG&E to contribute the most money to the fund given the size of its service area.

An unusual state constitutional provision makes utilities responsible for property damages resulting from fires sparked by their equipment. The legislation would allow utilities to tap the wildfire fund to cover future claims arising from such fires if they were found to have acted responsibly.

Mr. Newsom's proposal was aimed at satisfying investor demands that the state partially reform utilities' exposure to wildfire risk, which has intensified in recent years with severe drought and climate change -- while avoiding a bailout of PG&E. The state's largest power company has lost political goodwill in the wake of 19 wildfires state investigators have found its equipment caused in 2017 and 2018, including last year's Camp Fire, the deadliest in state history, which killed 85 people.

The new legislation does nothing to address PG&E's liability for past wildfires. The company last week pressed lawmakers to allow it to securitize future earnings to pay past wildfire claims, according to people familiar with the matter, but that provision wasn't included in the bill. Analysts expect lawmakers to consider that proposal later this session, given the amount of money PG&E will be required to contribute to the wildfire fund going forward.

Many longtime critics of PG&E's safety record, including consumer group The Utility Reform Network, supported the legislation, noting that it imposes new safety restrictions while limiting rate increases and corporate profits.

The wildfire fund will essentially spread future liabilities among the three utilities, making it easier for them to cover costs without raising rates for customers. To access the fund, a utility must obtain a safety certification from a new division of the California Public Utilities Commission that will be created to oversee wildfire safety efforts.

"Make no mistake -- this is not a utility bailout, it is a ratepayer bailout," said Democratic State Sen. Bill Dodd, co-author of the bill.

But some critics argued the measure still fell short.

State Senator Scott Wiener, a Democrat from San Francisco, who voted against the bill, said the legislation would make it harder for cities to create their own utilities. San Francisco has been considering purchasing some of PG&E's assets and forming a municipal utility.

"This is a dramatic sea change in terms of our ability to try a new model," Mr. Wiener said at a Monday hearing. He was the only Democrat in the state Senate to buck his party and Mr. Newsom, the former mayor of San Francisco.

Stocks mentioned in the article
ChangeLast1st jan.
EDISON INTERNATIONAL -0.70% 69.68 Delayed Quote.23.60%
PG&E CORPORATION -0.79% 17.65 Delayed Quote.-25.09%
SEMPRA ENERGY 0.37% 140.57 Delayed Quote.29.45%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on EDISON INTERNATIONAL
07/15EDISON INTERNATIONAL : SCE to Restart Fuel Transfer Operations at San Onofre Nuc..
BU
07/11EDISON INTERNATIONAL : SCE Reaction to Passage of Assembly Bill 1054 and Compani..
BU
07/11California Legislature Approves Multibillion-Dollar Wildfire Fund
DJ
07/09Most big CO2 emitting firms not on track for climate goals - report
RE
07/05EDISON INTERNATIONAL : Ex-dividend day for
FA
06/27EDISON INTERNATIONAL : Southern California Edison - SCE, Communities near San On..
AQ
06/27EDISON INTERNATIONAL : and Southern California Edison Declare Dividend
AQ
06/26EDISON INTERNATIONAL : and Southern California Edison Declare Dividends
BU
06/26EDISON INTERNATIONAL : SCE, Communities Near San Onofre Removing Long-Retired Em..
BU
06/25EDISON INTERNATIONAL : to Hold Conference Call on Second Quarter 2019 Financial ..
BU
More news
Financials (USD)
Sales 2019 13 314 M
EBIT 2019 2 715 M
Net income 2019 1 556 M
Debt 2019 17 326 M
Yield 2019 3,52%
P/E ratio 2019 14,8x
P/E ratio 2020 15,2x
EV / Sales2019 3,01x
EV / Sales2020 3,03x
Capitalization 22 703 M
Chart EDISON INTERNATIONAL
Duration : Period :
Edison International Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends EDISON INTERNATIONAL
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 16
Average target price 71,94  $
Last Close Price 69,68  $
Spread / Highest target 13,4%
Spread / Average Target 3,24%
Spread / Lowest Target -8,15%
EPS Revisions
Managers
NameTitle
Pedro J. Pizarro President, Chief Executive Officer & Director
William P. Sullivan Non-Executive Chairman
Maria C. Rigatti Chief Financial Officer & Executive Vice President
Vanessa C. L. Chang Independent Director
Brett W. White Lead Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
EDISON INTERNATIONAL23.60%22 862
NEXTERA ENERGY INC20.45%100 447
ENEL24.37%71 733
DUKE ENERGY CORP2.14%64 396
DOMINION ENERGY INC.6.72%61 662
IBERDROLA21.35%60 293