Monitor the California legislature for potential special session on wildfire liability reform before the November 15 constitutional deadline. The Eaton Fire loss range remains unestimable; any future disclosure of a loss estimate or material settlement would be a significant event. Track CPUC decisions on pending regulatory applications, particularly the 2023 and 2024 WMCE proceedings awaiting proposed decisions.
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Executive Summary
Edison International (EIX) held a business update presentation on October 29, 2026, reaffirming its 2026-2028 core EPS guidance ranges and outlining a $38-$41 billion five-year capital expenditure plan through 2030. The presentation highlighted progress on wildfire mitigation, the Eaton Fire loss status (currently unable to estimate a range of losses, with $1.8 billion in settlements entered into), and the need for durable wildfire reform in California after the regular legislative session ended without action.
Key Facts
- EIX reaffirmed 2026-2028 core EPS guidance: 2026 $5.90-$6.20, 2027 $6.25-$6.65, 2028 $6.74-$7.14.
- SCE forecasts $38-$41 billion in capital expenditures from 2026-2030.
- SCE rate base projected to grow at ~7% CAGR from 2025-2030, reaching $67.9 billion by 2030.
- EIX projects 5-7% core EPS CAGR from 2025-2030, with a 2030 target of $7.45-$8.20.
- Eaton Fire: Total settlements entered into are $1.8 billion; expected recoveries recorded include $917 million self-insurance, $859 million Wildfire Fund, and $70 million FERC rates.
- Eaton Fire: Edison International and SCE are currently unable to reasonably estimate a range of losses that may be incurred.
- SCE has hardened ~90% of its High Fire Risk Area distribution system (14,880+ circuit miles completed).
- California's regular legislative session ended without wildfire liability reform; SCE supports reconvening in a special session.
- No equity issuance forecasted through 2030; share count of 385 million.
- 22 consecutive years of dividend growth; current dividend yield ~6% based on October 28, 2026 stock price.
Financial Impact
Reaffirmed 2026 core EPS guidance of $5.90-$6.20; 2027 $6.25-$6.65; 2028 $6.74-$7.14. Five-year capex plan of $38-$41 billion. Eaton Fire losses currently unestimable with $1.8 billion in settlements entered into.
Risk Factors
- California wildfire liability reform not achieved in 2026, leading to continued uncertainty and elevated credit spreads.
- Eaton Fire losses currently unestimable; potential for material adverse loss development beyond the $1.8 billion in settlements already entered into.
- CPUC prudency determination for Eaton Fire costs could result in disallowances and require reimbursement to the Wildfire Fund, subject to a liability cap of ~$4.3 billion.
- Credit rating downgrades: S&P has a negative outlook on both EIX and SCE; Fitch has a negative outlook.
- Execution risk on the $38-$41 billion capital plan and achieving projected rate base and EPS growth.
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0000827052-26-000075 |
| Document: eix-20261029.htm | 0000827052-26-000075 |
| Document: 0000827052-26-000075-index-headers.html | 0000827052-26-000075 |
| Document: 0000827052-26-000075-index.html | 0000827052-26-000075 |
| Document: 0000827052-26-000075.txt | 0000827052-26-000075 |
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