What Edison International told the SEC could break it.

SCE faces large wildfire liability — it will exhaust self-insurance for the 2025 Eaton Fire (a 'covered wildfire'), seeking Wildfire Fund Initial Account reimbursement for eligible third-party-damage losses above $1.0 billion, on top of legacy 2017/2018 wildfire/mudslide claims.

“SCE will exhaust self-insurance recoveries available for losses related to the Eaton Fire as a result of costs incurred and settlements entered into as of February 11, 2026. ... SCE will be reimbursed for losses incurred in excess of $1.0 billion for eligible claims for third-party damages related to the Eaton Fire from the Initial Account, subject to approval of the fund administrator and the Initial Account's claims-paying capacity.”

SCE depends on California's Wildfire Fund and wildfire legislation for cost recovery, with reimbursement obligations capped at 20% of the equity portion of T&D rate base per period; earnings also hinge on CPUC GRC rate decisions and ROE.

“requirement to reimburse the fund over a trailing three calendar year period is capped at 20% of the equity portion of the utility's transmission and distribution rate base for the year of ignition. The California Wildfire Legislation also permits reimbursement obligations for disallowed costs to be offset with SCE's contributions to the Continuation Account, but not the Initial Account.”

Substantially all of Edison International's business is electric-utility operations through SCE, serving only southern and central California — concentrating exposure to California-specific events, regulation, legislation and judicial decisions.

“Substantially all of Edison International's business activities are concentrated in the electric utility industry. Edison International's principal subsidiary, SCE, serves customers only in southern and central California. As a result, Edison International's and SCE's future performance may be affected by events and economic factors unique to California or by regional regulation, legislation or judicial decisions.”

SCE buys most of its delivered power from external parties (only ~15% from its own generation) and natural gas for its plants; commodity-price exposure is largely mitigated by regulatory recovery mechanisms but affects cash-flow timing.

“SCE and its customers are exposed to the risk of a change in the market price of natural gas, electric power and transmission congestion. Due to regulatory mechanisms, exposure to commodity prices is not expected to impact earnings but may impact timing of cash flows.”