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

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

Why It’s Necessary

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 triggered the catastrophe, a number of lawsuits filed in opposition to SCE this week accuse gear owned by the biggest Southern California electrical utility of sparking the preliminary flames.

Associated: Edison Utility Sued Over Position of Gear in Los Angeles Hearth

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

What’s Subsequent

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

That would change if there may be sufficient proof to show SCE’s infrastructure triggered the fireplace, which might make the corporate extra susceptible to lawsuits, Moody’s mentioned.

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Different elements that might hurt SCE financially embrace a depleted wildfire fund, which supplies reimbursements for some wild-fire associated harm 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 based mostly on an expectation of extra frequent and extra extreme catastrophic wildfires that create better 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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