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Investing.com -- Shares of Edison International (NYSE:EIX) dropped 2.5% early Monday following reports from Bloomberg Law that a lawsuit claims the company's Southern California utility equipment may have sparked the Eaton (NYSE:ETN) fire, which resulted in significant fatalities and destruction. New video evidence from a gas station in Altadena, California, suggests that an electric arc from Edison's equipment could have ignited the blaze, according to a law firm suing the utility. The fire has led to at least 17 deaths and the loss of over 9,000 homes and businesses.
Edison International has responded with a regulatory update, emphasizing that there was no transmission system activity in the area at the time of the fire and that their systems were operating as intended. The company has also submitted a letter to the California Public Utilities Commission providing additional information on the incident and their ongoing investigation.
The utility has faced scrutiny from the Los Angeles County Fire Department, which is leading the investigation into the fire's origin and cause, with support from other agencies, including the California Department of Forestry and Fire Protection (Cal Fire). Edison International's preliminary analysis of electrical data indicates no faults on the energized transmission lines until more than one hour after the reported start time of the fire.
Despite these claims, the new surveillance video and statements from plaintiffs' counsel have prompted further investigation into the condition of Edison's equipment in Eaton Canyon. The company is taking measures to preserve evidence and cooperate with requests for information from fire agency investigators and plaintiffs' law firms.
The impact of the wildfire and subsequent legal developments have raised concerns among investors about potential liability and costs for Edison International. The stock's decline reflects the market's reaction to the uncertainty surrounding the company's involvement in the Eaton fire and the potential financial implications. Edison International has committed to providing further updates on the incident in its report to the Public Utilities Commission and will continue to work towards a resolution.
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