Camp Fire, Other Wildfires Renew Liability Concerns for California Utilities
We are cutting our fair value estimates for California utilities PG&E and Edison International to reflect possible liabilities related to state wildfires. However, we think the market has overreacted to the extent of potential liabilities, and the stocks appear undervalued as of midday Nov. 12. In the last two trading days, PG&E has lost $7.4 billion of market value, or 30%, and Edison has lost $4.7 billion of market value, or 21%, both exceeding our initial estimates of fire liabilities...Edison International is a holding company. Through its subsidiary, Southern California Edison Company (SCE), which is an investor-owned public utility, the company is primarily engaged in the business of supplying and delivering electricity to southern California. The company is also the parent company of Edison Energy Group, Inc., a holding company for Edison Energy, LLC, which is engaged in the business of providing energy services to commercial and industrial customers. SCE supplies electricity to its customers through transmission and distribution networks. Its transmission facilities include sub-transmission facilities and are located primarily in California but also in Nevada and Arizona.
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