Edison International

PG&E Corporation and Edison International plunged on August 31 after California lawmakers introduced a bill that would update the state's wildfire response but would not shift liability away from publicly traded utilities, omitting Governor Gavin Newsom's proposal to prevent insurers from suing utilities for wildfire losses. Both stocks had gained double digits this year on AI-driven power demand hopes, but the breakdown in negotiations triggered downgrades from Mizuho and BofA and price-target cuts from JP Morgan. PG&E responded by announcing a strategic review on September 2, cutting its 2027 capital investment plan by $2 billion to reduce higher-cost borrowing while maintaining safety investments, and reaffirmed FY 2026 adjusted core earnings guidance of $1.64-$1.66 per share while initiating FY 2027 guidance of $1.78-$1.82 per share. The failure of liability reform leaves utilities exposed to significant claims, with PG&E facing nearly 48% of the wildfire fund if exhausted, and Edison facing scrutiny over the Eaton fire caused by its transmission tower. While future reforms could help stocks rebound, unresolved wildfire liabilities remain a key headwind, and at the end of Q2 2026, 80 hedge funds held PG&E with over $5.3 billion invested, while 34 held Edison with almost $2.1 billion.

Oil prices climbed further and Asian shares were mixed Tuesday as renewed violence in the Iran war heightened uncertainty over the conflict's future. Brent crude gained 0.8% to $91.23 per barrel, while U.S. benchmark crude rose 1% to $86.62, following U.S. attacks on Iranian rocket launchers and Iran's missile response. The war has curtailed traffic in the Strait of Hormuz, which once accounted for about 20% of the world's oil shipments, keeping prices high and fueling inflation. In Asian trading, Hong Kong's Hang Seng fell 0.9%, while Tokyo's Nikkei 225 edged up 0.2%. Shein shares fell as much as 10% on their Hong Kong debut before paring losses to 5% by midday. Wall Street closed lower Monday, with Edison International and PG&E plunging on wildfire legislation concerns, while energy stocks like Exxon Mobil and Chevron gained.

Edison International stock crashed 24.2% by 2 p.m. ET Monday after a California legislative effort to limit utilities' liability for wildfire lawsuits collapsed over the weekend. Governor Gavin Newsom had backed a proposal that would have prevented insurance companies from suing utilities for wildfire damages, shifting the cost to insurers, but insurers argued this would force them to raise premiums or drop coverage in high-risk areas, and legislators ultimately rejected the plan. While some compromises remain, such as limiting attorneys' fees and denying bonuses to utility CEOs in wildfire years, the failure to end subrogation lawsuits is a major setback. Mizuho Bank downgraded Edison to neutral and cut its price target to $70, though investors appear to value the stock even lower.

PG&E and Edison International tumbled 19% and 24%, respectively, after California lawmakers blocked a proposal that would have limited payouts from utilities whose equipment sparked wildfires, prompting downgrades from analysts. Apple slipped nearly 2% on reports that App Store chief Phil Schiller is stepping down, while Howmet Aerospace fell over 8% after SpaceX said it would make turbine parts in-house. Herbalife dropped 13% on its CEO's departure, and Aon slid over 7% after agreeing to buy USI Insurance Services for $17 billion. Eli Lilly fell over 1% after announcing a $2.9 billion acquisition of Merida Biosciences, while GameStop rose 3% on preliminary results showing higher income. Deere and AGCO gained over 3% on an upgrade from Baird.

Southern California Edison is urging comprehensive wildfire reform, arguing that the amended Senate Bill 492 fails to deliver the durable solution needed to protect fire survivors, keep bills affordable, and support grid investments. The utility says SB 492 would not prioritize wildfire funds for survivors, would not address policies delaying recovery, and would not provide the stable financing framework utilities need to support California's climate goals. SCE plans to engage with the next governor and legislature to advance reform, emphasizing that wildfire policies must evolve with the changing climate to enable access to capital at reasonable cost. SCE, an Edison International company, serves approximately 15 million people via 5 million customer accounts in a 50,000-square-mile area in California.

Spot LNG prices in Asia have surged to $23.388 per million British thermal units, more than double pre-war levels, after Qatar extended its force majeure on LNG deliveries by another month due to the unresolved situation in the Strait of Hormuz. QatarEnergy has informed buyers in Pakistan that delivery cancellations will continue through October and has extended its force majeure declaration to Edison until November 4. Despite the US clearing mines and announcing the reopening of shipping lanes, LNG transport remains nearly halted, keeping prices elevated. Meanwhile, Europe's gas storage is below seasonal averages, and China's LNG imports have fallen 13% year-on-year.

Consumer Watchdog says the utility-funded coalition Wildfire Victims First is using utility-paid spokespeople to push a wildfire bailout in Sacramento. The group says three leaders featured by the coalition represent organizations with significant financial ties to utilities, including $604,757 in combined funding from PG&E, Edison, SDG&E and SoCalGas from 2023 through 2025. IBEW Local 1245 is directly connected to a funder of Wildfire Victims First through a political committee that spent heavily in the 2026 gubernatorial primary, with PG&E contributing $13.575 million and IBEW Local 1245 contributing $150,000. Consumer Watchdog also found that 142 of the 214 organizations in the coalition, or 66%, received a combined $7.3 million from the four utilities over the same period.

A coalition of governmental entities, wildfire survivors, insurance companies, attorneys and consumer groups sent a joint letter to the California legislature vowing to oppose any proposal that would shift billions of dollars in costs away from utility shareholders and onto insurance policyholders, cities, counties, taxpayers, and wildfire victims. The groups expressed concern that an 11th hour proposal backed by Governor Newsom would undermine one of California's most important incentives for utility safety. Senate Energy Committee Chair Ben Allen has written the CEOs of PG&E and Edison to call out the executives for threats made on recent shareholder calls, as reported by the Los Angeles Times. The CEOs threatened that if they didn't get a bailout in the legislature they would engage in tactics to protect shareholders, such as buying back stock with available cash to prevent the money from being used to improve infrastructure. Allen said he is contemplating having the CEOs appear at hearings to explain themselves.

Electrical sparks from an out-of-service transmission tower owned by Southern California Edison caused the 2025 Eaton Fire that killed 19 people and destroyed thousands of homes near Los Angeles, according to a report released Tuesday by the Los Angeles County Fire Department and Cal Fire. The investigation determined that electrical arcing ejected hot metal particles into dry vegetation below the towers, with two quick-succession arcing events sending unknown burning material that ignited the brush in 12 seconds. Southern California Edison, a subsidiary of Edison International, has already taken responsibility and has offered more than 775 million dollars through its Wildfire Recovery Compensation Program, which has received over 4,000 claims. The findings could still expose the utility to billions of dollars in additional liability claims.

Edison International shares dropped 5.4% after CEO Pedro Pizarro warned that California lawmakers may not pass wildfire liability reforms before the legislative session ends on August 31. Pizarro said on the company's earnings call that failure to enact a credit-supportive framework could significantly raise the cost of debt passed to Southern California Edison customers, noting that SCE's BBB- rating leaves no room before falling to non-investment grade. The company faces substantial wildfire liabilities, including about $1.6 billion committed to victims of the 2025 Eaton Fire, and stated in a new 10-Q filing that it is likely its equipment was associated with the fire's ignition. Edison reported better-than-expected second-quarter adjusted earnings, with net income rising to $534 million from $343 million a year earlier, while reaffirming full-year 2026 EPS guidance of $5.90 to $6.20. Barclays downgraded the stock to Equal Weight from Overweight, citing a shift in management tone and the risk that the capital and growth outlook could change after the legislative outcome.

Consumer Watchdog has issued an alert warning California Governor Gavin Newsom against a reported eleventh-hour proposal to limit utility liability for wildfires. The alert exposes a new ad campaign by a group called Wildfire Victims First, which it describes as a front for the state’s three for-profit utilities—PG&E, Southern California Edison, and SDG&E—whose equipment has caused nine of the twenty most damaging fires in California. According to Public Utilities Commission records, 70 percent of the coalition’s members are funded by the utilities to the tune of $6.9 million. The rumored proposal would cap attorney fees and victim payouts, limit insurance recoveries, and shift more fire costs onto survivors and all Californians. Campaign finance records show the three utilities have given approximately $162,000 to Newsom’s campaign committees since he began running for statewide office, more than any other elected official reviewed. A coalition led by the Every Fire Survivor’s Network has urged the governor to put any proposal through the normal legislative process rather than a last-minute gut-and-amend with no public input.

Southern California Edison's Wildfire Recovery Compensation Program tied to the Eaton Fire has attracted more than 11,700 claimants so far, with applications remaining open through November 30, 2026. The voluntary program does not require claimants to waive litigation rights, meaning it runs alongside traditional legal channels and keeps overall liability uncertainty elevated for parent company Edison International. The scale and structure of the program highlight both the social impact of the event and the financial significance of the recovery process, as ongoing claims could pressure profitability and cash flows if ultimate costs are high. Investors are watching how total claims evolve, the mix between Fast Pay and Detailed Review outcomes, and any disclosures on aggregate program costs, as well as regulatory decisions on wildfire cost recovery that will shape long-term earnings and balance sheet impacts.

Morgan Stanley raised its price target on Edison International from $64 to $66 while maintaining an Underweight rating, implying a nearly 13% downside from current levels. The adjustment came as part of the firm's monthly update for North American regulated and diversified utilities, noting the sector fell 5.5% in May against a 5.1% gain for the S&P 500. Separately, Edison declared a quarterly dividend of $0.8775 per share, payable July 31 to shareholders of record July 7, marking 22 consecutive years of payout growth and a 4.64% annual yield.

Southern California Edison has offered nearly $700 million to community members through its Wildfire Recovery Compensation Program following the Eaton Fire. More than 2,000 offers have been extended to over 4,900 claimants, with over 1,700 claimants paid a total of more than $250 million. The program has received more than 3,800 claims representing nearly 11,100 individuals, trusts, and legal entities. Offers are being delivered in an average of 35 days, and 82% of surveyed participants hold a favorable opinion of the program. The voluntary program remains open through November 30, 2026.