Edison International Reports Decline in Q2 Earnings, SCE Faces Wildfire-Related Challenges

Edison International and its subsidiary, Southern California Edison Company (SCE), reported their financial results for the second quarter and first half of 2025, revealing a decline in earnings compared to the previous year. For the three months ended June 30, 2025, Edison International's net income available to common shareholders was $343 million, down from $439 million in the same period of 2024. For the first half of 2025, net income was $1.351 billion, a significant increase from $428 million in the prior year, primarily driven by SCE's recovery of costs related to wildfire claims under the TKM Settlement Agreement.

SCE's operating revenue for the second quarter of 2025 was $4.532 billion, an increase of $208 million from $4.324 billion in the same quarter of 2024. However, the company's net income for the quarter fell to $476 million from $572 million year-over-year. The decrease in net income was attributed to higher operation and maintenance expenses, which rose by $295 million, largely due to increased wildfire mitigation costs. For the first half of 2025, SCE's operating revenue was $8.334 billion, slightly down from $8.388 billion in the same period of 2024.

In terms of strategic developments, SCE is currently engaged in a General Rate Case (GRC) proceeding with the California Public Utilities Commission (CPUC), which proposed a base rate revenue requirement of $9.8 billion for 2025, reflecting an increase of approximately $1.2 billion over the previous year. The proposed decision also includes capital expenditures of $6.2 billion for 2025. Additionally, SCE has filed for a cost of capital application seeking a return on equity of 11.75% for the next three years, which could further impact its revenue requirements.

Operationally, SCE continues to face challenges related to wildfire risks, with ongoing litigation stemming from various wildfire events, including the recent Eaton Fire in January 2025, which resulted in significant damage and loss of life. As of June 30, 2025, SCE had approximately 300 lawsuits related to the Eaton Fire, representing around 4,500 individual plaintiffs. The company has accrued estimated losses related to these claims but has not yet determined the full extent of potential liabilities.

Looking ahead, Edison International and SCE remain focused on managing their wildfire risk and regulatory challenges while pursuing cost recovery through ongoing regulatory proceedings. The companies are optimistic about their ability to recover costs associated with wildfire-related claims, particularly under the provisions of AB 1054, which provides a framework for cost recovery for utilities that maintain safety certifications during wildfire events.