Citi says new fires could influence Edison’s regulatory outlook

Citi analyst Ryan Levine thinks the fires in Pacific Palisades, Los Angeles, along with an eventful wildfire season, has the potential to change the political and regulatory perception of wildfire risk in California. This may impact the outcome for Southern California Edison’s cost recovery proceeding of the legacy Woolsey fire, the analyst tells investors in a research note. The firm says the company’s Thomas Fire, Koenigstein Fire, and Montecito Mudslides cost recovery is less exposed as Southern California Edison’s settlement was adopted as proposed decision by California Public Utilities Commission’s administrative law judge and could be voted on January 30 at the earliest. However, Citi expects California names “to be volatile and weak until this risk is better understood.” The firm has a Buy rating on Edison International (EIX) with an $86 price target The stock in afternoon trading is down 13%, or $9.86, to $67.50.