5 Dead, Nearly 180,000 Evacuated In Los Angeles Wildfires: California Utilities Face Scrutiny

California utility companies could come under pressure from regulators and investors after devastating Los Angeles wildfires have left at five people dead and almost 180,000 evacuated from their homes due to multiple wildfires.

Here's the latest.

What Happened: Areas near Los Angeles, California have been hardest hit by one of the most destructive wildfire events in the state.

At least five people are dead, found in buildings in Altadena, where the Eaton Fire exploded Tuesday night, as reported by the LA Times.

179,783 people are under evacuation orders as of Thursday, according to Los Angeles Sheriff Robert Luna, NBC News reported. Another 200,000 face evacuation warnings.

Over 2,000 buildings have been burned. Multiple fires continue blazing Thursday and have not been contained.

“What we saw here in the last 24 hours is unprecedented," LAPD Chief Jim McDonnell said Wednesday. "I've never seen anything like this."

Limited resources including a lack of firefighters, firetrucks and water in fire hydrants have been reported in several regions.

California Gov. Gavin Newsom has called on the National Guard for its assistance in helping with evacuation orders and to assist with the devastating fires.

Utility Stocks in Focus: Utility companies including Edison International EIX and San Diego Gas & Electric, which is owned by Sempra SRE, began cutting power to customers to reduce fire risk ahead of elevated winds during the week, as reported by The New York Times.

Edison plans to continue utility shutoffs for customers through Friday after already cutting power to over 150,000 customers.

Restoration of power for customers will depend on future weather, the containment of fires and inspections of power lines.

"Our top concern right now is the safety of our customers, crew members and emergency personnel," Edison spokesman David Eisenhauer said.

Edison said the fires, which it called an "extreme weather event," are an evolving situation it is monitoring.

"Safety remains our number one priority for customers, employees and our communities," the company said.

Public safety power shutoffs have been conducted by SDG&E due to the dry conditions and Santa Ana winds, the company said Wednesday. The proactive measure is being done to protect public safety and help reduce wildfire risk.

A statement from Pacific Gas & Electric PCG said the company has sent helicopters and wildlife resources to the region to help with the fires, including two Blackhawk helicopters.

PG&E said it is monitoring conditions in its serviced areas including Kern, Santa Barbara and San Luis Obispo counties.

Edison stock was hit the hardest of the utility companies connected to the California wildfires, falling 10% to $69.50 on Wednesday. The stock is now down 5% over the last year.

Pacific Gas & Electric shares fell 4% to $19.25 on Wednesday.

Sempra shares fell 2% to $82.82 on Wednesday.

These utility companies remain top holdings in utility ETFs. In the SPDR Select Sector Fund – Utilities XLU, Sempra is the sixth largest holding at 4.5% of assets, PCG 10^th largest at 3.6% of assets and EIX comprises 2.3% of the ETF’s assets.

In the Vanguard Utilities ETF VPU, Sempra (4.3% of assets), PG&E (3.2% of assets) and Edison International (2.5%) are among the largest holdings.

Fire Cause: One of the key question on the minds of California residents and investors will be who or what caused the fire. Right now, this remains a mystery.

As the New York Times reports, scrutiny of power lines will likely come after the fires, as utility equipment has led to some of the largest California wildfires in the past, including the 2018 Camp Fire that left 85 people dead.

In 2024, four wildfire incidents were caused by utility equipment, including two by Edison International-owned Southern California Edison, according to the report.

Pacific Gas & Electric, which may have limited exposure to this week’s infernos, is a lesson in the liability risk that California utilities face.

The utility company declared bankruptcy in 2019 related to damages and claims from wildfires. This included a $13.5 billion settlement for its alleged role in the fires. The company emerged from bankruptcy in 2020.

In 2024, Pacific Gas & Electric paid $45 million in penalties related to the Dixie Fire in 2021, which state regulators found was linked to the company's power lines, as reported by CNN.

California state law AB-1054, passed in 2019, established a Wildfire Fund of up to $21 billion to provide liquidity for fire events in the state and limits the liability of utility companies.

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