Nearly 100 utilities’ credit ratings downgraded since 2020 as wildfire risks grow

Emma Penrod | Source: Utility DIVE | Posted 10/26/2024

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Rising insurance and mitigation costs threaten utilities’ financial stability, but there may be hope on the horizon, according to a report from Charles River Associates.

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Increased wildfire risk has led to nearly 100 utility company credit downgrades since 2020, impacting their ability to borrow money and increasing insurance costs. These financial burdens have been passed on to consumers through rate hikes, according to a report by Charles River Associates.

Credit rating agencies like Moody’s and S&P Global have downgraded numerous utility credit ratings due to wildfire risks. While utilities face significant financial instability in fire-prone areas, effective wildfire mitigation strategies, public policy initiatives, and utility-led efforts have shown promise in reducing these risks and stabilizing the industry, as highlighted by Charles River Associates’ findings and statements made by Andrew Dressel, the Vice President of Energy at the consulting firm.

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Source Link: https://www.utilitydive.com/news/nearly-100-utilities-credit-ratings-downgraded-since-2020-wildfires/730657/

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Nearly 100 utilities’ credit ratings downgraded since 2020 as wildfire risks grow

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