Climate Changed

Best Shot a Utility Has Against Fire Costs May Be Climate Change

  • Edison CEO says climate change contributes to statewide crisis
  • Edison, PG&E may be liable for billions in costs from fires

A Pacific Gas & Electric (PG&E) employee works on a home burned by wildfires in Napa, California, on Oct. 13, 2017. 

Photographer: David Paul Morris/Bloomberg
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Across America, utility executives are getting grilled this earnings season about the consequences of tax reforms, slackening growth and possible mergers. In California, though, Wall Street just wants to know one thing: Are power companies going to take the heat for deadly wildfires?

California’s two largest utilities, PG&E Corp. and Edison International, have both seen billions of dollars of their market value wiped out by devastating fires that broke out last year. Because of a state law, they could end up on the hook for damages if downed power lines were the cause. Their chief executive officers were prepared for a flood of questions from analysts about the blazes during their earnings calls, and they seized the moment to deliver what was essentially the same line: Climate change is the real problem.