MANY MINDEDEdison warns California sits one notch above junk
California's investor-owned utilities could face credit rating downgrades if state lawmakers do not act before the legislative session ends on 31 August, Edison International president and chief executive Pedro Pizarro told analysts on the company's second-quarter earnings call, Utility Dive reported on 31 July 2026.
Pizarro said he had seen no draft legislation addressing the state's soaring wildfire costs, and was direct about the position that leaves Southern California Edison in. The utility is rated BBB- by S&P, the lowest investment-grade rung, with no lower investment-grade step to fall to; the next move down is non-investment grade. He framed the consequence as a higher cost of debt passed through to SCE customers.
The liabilities behind that are already large. As of 30 June, Edison had recorded $1.6 billion in settlement costs related to the 2025 Eaton Fire. In April 2026 the California Public Utilities Commission granted SCE's request to collect between $274 million and $650 million from customers to cover Eaton Fire costs. The company reported $534 million in second-quarter income, up from $343 million a year earlier, and carries a five-year capital plan of $38 billion to $41 billion. Sixty percent of the energy SCE delivered to customers was carbon-free.
This is friction in the most direct sense. Electricity is the input cost sitting underneath most other needs getting cheaper, and climate damage is now being priced into the balance sheet that delivers it. A downgrade raises the cost of capital funding the grid, and that lands on bills.
Two caveats. The downgrade is a warning, not an event — Pizarro also said a lower rating would not immediately affect the capital plan, because Edison does not expect to raise new equity before 2030. And he declined to say how the company would respond if reform does not pass.
Source: Utility Dive