Moody’s Says LA Hearth Might Pose Danger to Southern California Edison

The Eaton Hearth in central Los Angeles County poses a possible credit score threat to energy supplier Southern California Edison, which operates electrical strains within the space the place the damaging blaze first began, Moody’s Scores mentioned in a report on Thursday.

Why It’s Essential

Hearth investigators haven’t launched a trigger for the lethal Eaton Blaze, which has burned greater than 14,000 acres since beginning on Jan. 7. Regardless of the uncertainty over what brought on the catastrophe, a number of lawsuits filed in opposition to SCE this week accuse tools owned by the biggest Southern California electrical utility of sparking the preliminary flames.

Associated: Edison Utility Sued Over Role of Equipment in Los Angeles Fire

SCE, which is the primary subsidiary of Edison Worldwide, has mentioned it has not discovered proof that its tools is accountable for the fireplace.

What’s Subsequent

Moody’s mentioned it believes a state wildfire fund and California utilities’ capacity to recuperate fire-related prices shall be supportive of SCE’s credit score.

That would change if there’s sufficient proof to show SCE’s infrastructure brought on the fireplace, which might make the corporate extra weak to lawsuits, Moody’s mentioned.

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Different elements that might hurt SCE financially embody a depleted wildfire fund, which gives reimbursements for some wild-fire associated injury claims, or if the regulatory and political assist for California utilities space begins to wane, Moody’s mentioned.

Key Quotes

“We may additionally change our view primarily based on an expectation of extra frequent and extra extreme catastrophic wildfires that create larger dangers to the corporate’s credit score profile,” Moody’s mentioned.

(Reporting by Laila Kearney; Enhancing by Bernadette Baum)

Prime picture: Photograph from the Eaton Hearth that began within the Metropolis of Los Angelas, January 2025. Souce: CalFire.

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