trending Market Intelligence /marketintelligence/en/news-insights/trending/NaiINRvWoP7CkJgiOoSjIQ2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

S&P downgrades SDG&E, SoCalEd, Edison International on wildfire, climate risk

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August

S&P downgrades SDG&E, SoCalEd, Edison International on wildfire, climate risk

S&P Global Ratings on Jan. 21 downgraded Edison International, its subsidiary Southern California Edison Co. and San Diego Gas & Electric Co. to reflect that the companies "will continue to experience catastrophic wildfires because of climate change and without sufficient regulatory protections due to California's common law application of the legal doctrine of inverse condemnation."

S&P Global Ratings lowered the issuer credit rating of SoCalEd and Edison International to BBB from BBB+. Additionally, Edison International's unsecured debt was downgraded to BBB- from BBB, and SoCalEd's unsecured debt was downgraded to BBB from BBB+, its secured debt to A- from A and its preferred stock to BB+ from BBB-, with all ratings on CreditWatch with negative implications.

For SDG&E, S&P Global Ratings lowered its long-term issuer credit rating and issue-level rating on unsecured debt to BBB+ from A-. The rating agency also revised its assessment of SDG&E's business risk profile to "strong" from "excellent" and reassessed but did not change the utility's relationship to parent company Sempra Energy.

Citing California utilities' exposure to wildfires, the rating agency described Senate Bill 901 as a first step to protect the credit quality of utilities but called for further reform to help shield the companies from the risks of the state's unique inverse condemnation policy.

PG&E Corp. and its utility Pacific Gas and Electric Co. announced plans Jan. 14 to file for reorganization under Chapter 11 bankruptcy law. "[T]he swift deterioration of PG&E's financial health only heightens the uncertainties facing all of California's other electric utilities," S&P Global Ratings analysts wrote.

For SoCalEd and Edison International, S&P Global Ratings expects annual capital spending of approximately $5 billion, $800 million in annual dividends, a base rate increase, potential contingent liabilities, tax reform, and continued Federal Energy Regulatory Commission formula rates. The rating agency anticipates a funds from operations-to-debt ratio in the range of 16% to 18%.

For SDG&E, S&P Global Ratings expects continued "robust" annual capital spending averaging more than $1.2 billion, continued rate-case increases and attrition rates, tax reform, above-average customer growth, and a funds from operations-to-debt ratio of about 20%.

"We now believe that if there is a catastrophic wildfire in SDG&E's service territory, and the utility is identified as the cause of the fire, Sempra's support would be limited to protect its other investments," S&P Global Ratings analysts wrote.

S&P Global Ratings said it could downgrade the ratings on SDG&E, SoCalEd and Edison International further if lawmakers and regulators do not take concrete steps to address the financial risks facing the companies.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here and here.