Edison's Wildfire Link: Shares Tumble Amidst Ongoing Investigation

As the wildfires in Los Angeles continue to rage on, Edison International, the parent company of Southern California Edison (SCE), has announced that it has not found any electrical anomalies before the Eaton blaze. This revelation comes amidst an ongoing investigation into the potential link between Edison's equipment and the wildfires, which have resulted in at least 24 deaths and the destruction of over 10,000 homes and other structures. Edison's stock price has taken a hit, reaching a 52-week low, as investors grapple with the uncertainty surrounding the investigation.

Edison International, in a press release, stated that it had filed an Electric Safety Incident Report (ESIR) once it learned that fire agencies were investigating whether SCE equipment was involved in the ignition of the wildfires. The company noted that the fire was reported at approximately 10:10 PM on 7 January, and preliminary information reflects that the Eagle Rock - Sylmar 220 kV circuit experienced a relay at 10:11 PM. A downed powerline was discovered at a tower associated with the Eagle Rock - Sylmar 220 kV circuit, but Edison does not know whether the damage observed occurred before or after the start of the fire.

Despite the ongoing investigation, Edison has been working tirelessly to restore power to affected customers. As of 12 January, the company has restored power to over 500,000 customers, with 62,662 customers still without power. Edison has warned that restoration times may take longer than usual due to severe equipment damage and access restrictions in areas impacted by wildfire.

The ongoing wildfires have had a significant impact on Edison's financial performance, with the company announcing a $1 million contribution to support relief efforts and assist those affected by the wildfires. Additionally, Edison has received notices from insurance companies to preserve evidence related to the Eaton Fire, which is still burning in Los Angeles. The company may face legal liabilities and insurance claims related to the wildfires, which could impact its short-term financial performance.

The uncertainty surrounding the investigation has led to a decline in investor confidence in Edison. The company's stock price has fallen by more than 10% since the investigation was announced, and analysts have lowered their expectations for the company's fourth-quarter earnings. This decline in investor confidence is reflected in the number of hedge funds holding stakes in Edison, which has fallen from 32 in Q2 2024 to 29 in Q3 2024.

In conclusion, the ongoing investigation into Edison's potential link to the LA wildfires has led to a decline in the company's stock price and investor confidence. While Edison has not found any electrical anomalies before the Eaton blaze, the investigation is still ongoing, and the company is cooperating with fire agencies to determine the cause of the wildfires. Edison has been working to restore power to affected customers and has announced a financial contribution to support relief efforts. However, the company may face legal liabilities and insurance claims related to the wildfires, which could impact its short-term financial performance. As the investigation continues, investors will be closely watching the developments and the potential impact on Edison's financial performance.