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- More than $1.6 billion of the $2.7 billion that Edison paid to more than 5,000 victims of the Thomas fire will be covered by its customers. The rest will be paid by shareholders of the for-profit company.
- A second proposal, still pending, would shift $5.4 billion of costs it paid to victims of the 2018 Woolsey fire to customers.
- Investigators said Edison’s equipment sparked both fires.
The California Public Utilities Commission voted Thursday to allow Southern California Edison to raise electric rates to cover payments it made to victims of the devastating 2017 Thomas wildfire.
Investigators found that the utility’s equipment sparked the blaze, one of the largest in California history. The fire’s devastation also helped spur the catastrophic debris flows in Montecito, which killed 23.
With no discussion, the commission approved the rate hike by a 4-0 vote. The vote means that more than $1.6 billion of the $2.7 billion that Edison paid to more than 5,000 victims of the fire will be covered by its customers. The rest will be paid by shareholders of the for-profit company.
After the vote, seven Democratic state legislators sent a letter to the commission, saying the action harmed customers and failed to hold Edison accountable.
“Those in regions prone to wildfires have already suffered the consequences of utility failure by being forced to endure power outages, property destruction, and displacement,” wrote the legislators, who include Sen. Ben Allen (D-Santa Monica). “It is reprehensible to require these same consumers to assume the financial responsibility for corporate mismanagement and infrastructure deficiencies.”
Edison said it planned to minimize the impact on customers by spreading the cost over 30 years. Most customers would see an increase to their monthly bill of about $1, the company said.
The commissioners approved the rate hike despite dozens of written comments from the public saying it wasn’t fair to make customers pay for costs of a wildfire that state and local government investigators had determined was started by the utility’s equipment.
“Relieving Edison of its duties to provide safe and reliable services by forcing its customers to foot the bill for their outright negligence is unconscionable,” wrote Emma Mailey, a resident of Los Angeles. She added that such an action “will teach them nothing and lead to more inaction on Edison’s part.”
Edison disputed investigators’ claims that its actions negligently caused the fire, saying in a press release last year that it had “prudently operated its system, managing it at or above what is required by regulators.”
“Climate change is driving catastrophic wildfires,” Pedro Pizarro, president of Edison International, said in the release, “and SCE will continue its work to mitigate the effects.”
The company has also asked the commission to approve a second rate increase for $5.4 billion in payments to victims of the devastating 2018 Woolsey fire, which the commission will consider at a later date. Investigators found Edison’s equipment also sparked that fire.
Combined, the two proposals would increase rates by more than 2%.
As Southern California Edison fights claims that it caused the deadly Eaton fire, the company is lobbying state regulators to have its customers cover more than $7 billion for damages it paid to the victims of two massive wildfires in 2017 and 2018.
California’s electric rates are the second-highest in the nation. Edison’s rates have increased 48% in the last three years, according to a December report by the utility commission’s public advocates office.
After the vote, Alice Reynolds, the commission’s president, said that if she and the other members hadn’t approved the settlement agreement it could have led to litigation “with an unknown result.”
Reynolds and the other commission members were appointed by Gov. Gavin Newsom.
She said the commission was operating under a legal standard in a 2019 law that said if a wildfire was sparked by a utility’s equipment but the company was found to have acted “prudently,” the costs would be covered by customers.
The 2019 law, known as AB 1054, created a wildfire insurance fund. The Thomas and Woolsey fires don’t qualify for money from the fund because they happened before the law passed.
State regulators criticized Southern California Edison for falling behind in inspecting transmission lines in areas at high risk of wildfires just months before the deadly Eaton fire, according to state documents.
Edison’s equipment is now under scrutiny in the wake of the Eaton firestorm in Altadena, which killed at least 17 people and destroyed thousands of homes and businesses.
Lawyers representing victims point to cellphone videos taken by eyewitnesses that show the first flames below the company’s transmission tower in Eaton Canyon.
Edison said it is conducting its own investigation while cooperating with government fire investigators probing the cause of the inferno.
The 2017 Thomas fire swept through almost 282,000 acres in Ventura and Santa Barbara counties, destroying more than 1,000 structures and causing two deaths.
Investigators said Edison’s equipment was the cause of two separate ignitions on Dec. 4, 2017, near Santa Paula. The two fires eventually merged together.
Cal Fire and Ventura County fire investigators said one ignition was caused by an electric wire falling and igniting dry brush. The other ignition happened, the investigators said, when two wires slapped together, releasing molten metal into the vegetation.
The commission’s safety and enforcement division later said the company had violated five rules and regulations, including failure to cooperate with investigators.
In January 2018, while the fire was still burning, heavy rainfall led to debris flows in Montecito. Officials said the mud and boulders were dislodged in part because of the fire’s toll on vegetation and soil.
Edison has argued that its equipment wasn’t responsible for one of the two ignitions. And it says it disagrees with findings of the commission’s safety and enforcement division that it had violated any rules or regulations, including the claim that it had failed to cooperate with investigators.
Terrie Prosper, a commission spokesperson, said that although the agency’s enforcement staff identified the violations, the commission approved a 2021 agreement with Edison that found no violations related to the Thomas fire. As part of that agreement, Edison agreed to $550 million in financial penalties for multiple wildfires, including the Thomas fire.
Edison said it blames the damage and deaths caused by the Montecito debris flows on “inadequate governmental flood control infrastructure and deficient evacuation communications.”
