Latest news with #utility
The Guardian
an hour ago
- Business
- The Guardian
Insurance claims from LA fires could ‘fully exhaust' $21bn state fund
Insurance claims from the Eaton wildfire could 'fully exhaust' a state fund that was set up to protect customers when a wildfire is caused by a utility company. The devastating wildfire in Los Angeles killed 17 people and destroyed more than 9,000 structures in January. One leading theory is that ageing equipment belonging to Southern California Edison, the primary electricity provider in the region, ignited the fire. If the utility company is found to have been responsible for igniting the devastating January blaze, then the 'financial health of the fund could be strained', according to documents published by California's Catastrophe Response Council, a group of lawmakers and members of the public who oversee the state's wildfire fund. California lawmakers established the state's $21bn wildfire fund in 2019 in an effort to prevent the state's largest utility companies from declaring bankruptcy if their equipment caused a fire. The fund is made up of money the utility companies contribute and a surcharge on customers' utility bills. Power lines and other utility equipment are a top cause of wildfires in drought-ridden California – and have sparked some of the state's most devastating blazes including the 2018 Camp fire that killed more than 80 people. Although investigators are still determining the cause of the Eaton fire, the utility company has been under scrutiny since the blaze broke out. The wildfire fund is overseen by a seven-member council that includes the governor, insurance commissioner, treasurer and secretary for natural resources, members of the public and lawmakers. Before the council's scheduled 24 July meeting, the group published minutes from its 1 May meeting and a draft annual report to the legislature. Those documents suggest that insurance claims from the Eaton fire could drain its resources entirely. Insured losses for both wildfires that devastated southern California in January – the Eaton and the Palisades fires – range from $20bn to $45bn, according to estimates from financial services companies, such as Moody's and Milliman, and the University of California at Los Angeles Anderson School of Management. The risk management firm Verisk estimates that insured losses from the Eaton fire alone could reach $15.2bn. Those estimates have prompted the fund council to warn that, if it is determined that the Eaton fire was sparked by utility equipment, 'the resulting claims may be substantial enough to fully exhaust the Fund'. The losses could far exceed the fund pending ongoing lawsuits. Dozens of families who lost homes in the Eaton fire have sued Southern California Edison. If investigators determine the blaze was sparked by utility equipment, the state fund would also be responsible for paying any settlements in those lawsuits. The documents published before the council's meeting include strategies its members are considering in consultation with experts to ensure the financial durability of the fund. The committee also drafted a letter stating that 'they want to make sure most of the Fund is going to wildfire recovery experts and not third-party actors', such as hedge funds or attorneys. The council documents note that hedge funds are purchasing insurance industry subrogation rights, or the right to the insurance claim, in an attempt to profit from the wildfires. By doing so, hedge funds are agreeing to pay the insurance claim, but would take home any winnings from a legal settlement if Southern California Edison is found liable. The California Earthquake Authority, which administers the fund under the oversight of the council, also told the Los Angeles Times that it worries attorney fees could shrink the fund further (up to half of settlement amounts can go to legal fees). Another tactic may include paying out 'only reasonable claims'. In notes to the fund administrator, one council member asks their colleagues to consider requiring utility companies to 'settle claims with diligence' – since the fund, not the utilities, ultimately pay those settlements.
The Guardian
10 hours ago
- Business
- The Guardian
Insurance claims from LA fires could ‘fully exhaust' $21bn state fund
Insurance claims from the Eaton wildfire could 'fully exhaust' a state fund that was set up to protect customers when a wildfire is caused by a utility company. The devastating wildfire in Los Angeles killed 17 people and destroyed more than 9,000 structures in January. One leading theory is that ageing equipment belonging to Southern California Edison, the primary electricity provider in the region, ignited the fire. If the utility company is found to have been responsible for igniting the devastating January blaze, then the 'financial health of the fund could be strained', according to documents published by California's Catastrophe Response Council, a group of lawmakers and members of the public who oversee the state's wildfire fund. California lawmakers established the state's $21bn wildfire fund in 2019 in an effort to prevent the state's largest utility companies from declaring bankruptcy if their equipment caused a fire. The fund is made up of money the utility companies contribute and a surcharge on customers' utility bills. Power lines and other utility equipment are a top cause of wildfires in drought-ridden California – and have sparked some of the state's most devastating blazes including the 2018 Camp fire that killed more than 80 people. Although investigators are still determining the cause of the Eaton fire, the utility company has been under scrutiny since the blaze broke out. The wildfire fund is overseen by a seven-member council that includes the governor, insurance commissioner, treasurer and secretary for natural resources, members of the public and lawmakers. Before the council's scheduled 24 July meeting, the group published minutes from its 1 May meeting and a draft annual report to the legislature. Those documents suggest that insurance claims from the Eaton fire could drain its resources entirely. Insured losses for both wildfires that devastated southern California in January – the Eaton and the Palisades fires – range from $20bn to $45bn, according to estimates from financial services companies, such as Moody's and Milliman, and the University of California at Los Angeles Anderson School of Management. The risk management firm Verisk estimates that insured losses from the Eaton fire alone could reach $15.2bn. Those estimates have prompted the fund council to warn that, if it is determined that the Eaton fire was sparked by utility equipment, 'the resulting claims may be substantial enough to fully exhaust the Fund'. The losses could far exceed the fund pending ongoing lawsuits. Dozens of families who lost homes in the Eaton fire have sued Southern California Edison. If investigators determine the blaze was sparked by utility equipment, the state fund would also be responsible for paying any settlements in those lawsuits. The documents published before the council's meeting include strategies its members are considering in consultation with experts to ensure the financial durability of the fund. The committee also drafted a letter stating that 'they want to make sure most of the Fund is going to wildfire recovery experts and not third-party actors', such as hedge funds or attorneys. The council documents note that hedge funds are purchasing insurance industry subrogation rights, or the right to the insurance claim, in an attempt to profit from the wildfires. By doing so, hedge funds are agreeing to pay the insurance claim, but would take home any winnings from a legal settlement if Southern California Edison is found liable. The California Earthquake Authority, which administers the fund under the oversight of the council, also told the Los Angeles Times that it worries attorney fees could shrink the fund further (up to half of settlement amounts can go to legal fees). Another tactic may include paying out 'only reasonable claims'. In notes to the fund administrator, one council member asks their colleagues to consider requiring utility companies to 'settle claims with diligence' – since the fund, not the utilities, ultimately pay those settlements.
Yahoo
10 hours ago
- Business
- Yahoo
Will Fortis (FTS) Beat Estimates Again in Its Next Earnings Report?
Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Fortis (FTS), which belongs to the Zacks Utility - Electric Power industry. This electric and gas utility has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 2.48%. For the most recent quarter, Fortis was expected to post earnings of $0.7 per share, but it reported $0.69 per share instead, representing a surprise of 1.45%. For the previous quarter, the consensus estimate was $0.57 per share, while it actually produced $0.59 per share, a surprise of 3.51%. Price and EPS Surprise Thanks in part to this history, there has been a favorable change in earnings estimates for Fortis lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank. Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Fortis has an Earnings ESP of +1.48% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #2 (Buy), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on August 1, 2025. With the Earnings ESP metric, it's important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss. Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate. Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fortis (FTS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
12 hours ago
- Business
- Bloomberg
Edison Sets Up Compensation Program for Eaton Fire Victims
Southern California Edison will set up a program to compensate victims of a deadly Los Angeles wildfire that it has acknowledged may be linked to the company's electrical equipment. The utility, owned by Edison International, said the voluntary claims program will provide direct payments and fast resolutions to eligible individuals and businesses impacted by January's Eaton Fire. While the cause of the wildfire that killed 18 people and destroyed more than 9,000 structures has yet to be determined, Southern California Edison has said it will probably incur material losses from the blaze that started near the base of one of its transmission lines.
Reuters
a day ago
- Business
- Reuters
Iberdrola launches $5.9 billion capital increase to fund growth in US, Britain
MADRID, July 23 (Reuters) - Europe's largest utility Iberdrola ( opens new tab launched a 5 billion euro ($5.87 billion) capital increase on Wednesday to help pay for a big increase in investments in power grids in Britain and the United States. The company plans to increase its annual investments to around 15 billion euros from a current level of around 12 billion euros, building on its shift towards upgrading and expanding power grids in countries where returns are steady and healthy, such as the U.S. and Britain. In the next six years, it will invest some 55 billion euros in power grids, more than 80% in these two countries. The planned investment represents a 75% increase over the previous six years. As a result, the value of its grid assets, whose returns are regulated and guaranteed, will top 90 billion euros by 2031 - 75% of which will be in Britain and the U.S. - from 55 billion euros this year and just 30 billion euros at the beginning of the decade. The weight of its Spanish home market in the network business is set to decline significantly, as a share of both investments and regulated assets. Spanish utilities have recently warned that the country risked losing critical investments in grids to other countries as the remuneration on grid assets proposed by regulators was set below what they expect. The cash raised by Iberdrola's capital increase, along with debt, operating cash flow, asset sales and partnerships will help fund the new strategy the company will present in September. No further equity raises are expected until at least the end of the decade, Executive Chairman Ignacio Sanchez Galan said in a call with investors. The shares offered through a process of accelerated book-building were set to be priced at 15.10 euros, one of the bookrunners said. Iberdrola's share price closed at 15.895 euros on Tuesday. Spain's stock market regulator suspended trading of Iberdrola's shares on Wednesday morning. The capital increase was unexpected, RBC analyst Fernando Garcia said. Separately, the utility said first-half net profit declined 14% from a year earlier, when results were boosted by the inclusion of the sale of gas assets in Mexico. Net profit for the period was 3.56 billion euros ($4.18 billion) compared to 4.1 billion euros a year earlier. Excluding one-offs, profit was up 20%, it said. ($1 = 0.8523 euros)
