EIX · 10-Q · 2026Q3 · Full report
Wildfire Liability Reform
EDISON INTERNATIONAL · 2026-10-29 · Importance 34 · Surprise 42 · Matches filing data
In April 2026, the CEA submitted a report to the California Legislature and Governor under SB 254, citing increasing catastrophe risks and potential effects on utility costs, customer rates, insurance premiums, and SCE’s credit and access to capital. The report outlined policy options involving community-level mitigation, allocation of catastrophe burdens through insurance and liability mechanisms, and potential state catastrophe financing or risk-pooling roles; it did not endorse a specific approach. The 2025–2026 California legislative session ended without enacting legislation addressing those options, and Edison International and SCE continued stakeholder engagement to advance the process.
Key facts
- With valid safety certification at the time of ignition, SCE would have to reimburse the Initial Account for CPUC-disallowed amounts up to an approximately $4.3 billion Liability Cap, unless the fund administrator finds conscious or willful disregard of others' rights and safety. source
- If the CPUC finds SCE's Eaton Fire ignition-related conduct imprudent, SCE may still receive full or partial cost recovery based on factors within and beyond its control that exacerbated costs. source
- The 2025–2026 California legislative session concluded without enacting legislation addressing any of the policy options identified in the April 2026 CEA report. source
- Because SCE held a valid safety certification when the Eaton Fire occurred, it will be presumed prudent unless a party creates serious doubt about its conduct, after which SCE bears the burden of proving prudence. source
- SCE may seek electric-rate recovery for prudently incurred uninsured wildfire costs not covered by the Initial Account under the prudency standard clarified by the California Wildfire Legislation. source
- As of October 22, 2026, the CPUC had not issued a final decision applying the California Wildfire Legislation prudency framework to a wildfire cost-recovery proceeding. source
- Edison International and SCE stated they cannot predict whether or when a comprehensive economy-wide solution will mitigate California investor-owned utilities' significant wildfire-related risk. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| liability | negative | contingent | -0.3% | With valid safety certification at the time of ignition, SCE would have to reimburse the Initial Account for CPUC-disallowed amounts up to… |