Investigating the reason behind Eaton fire may necessitate 12-18 months, as per Edison International's statement.
The Eaton Fire, which claimed the lives of 17 individuals and ravaged approximately 14,000 acres in California's fourth quarter, is under investigation for its cause. Evidence gathered suggests a possible link between the fire and idle power lines owned by Southern California Edison (SCE), a major investor-owned utility in the state.
SCE is currently facing several lawsuits related to the Eaton Fire. The company, however, maintains that it had engaged in extensive grid hardening and executed a public safety power shutoff prior to the fire's ignition. Southern California Edison also plans to use its self-insurance fund before turning to California's Wildfire Fund, if necessary, to pay claims related to the Eaton Fire.
The California Wildfire Fund (CA Wildfire Fund) was established to limit utility companies' liability for wildfire damages. The fund, which currently holds about $21 billion, is funded by a mix of utility customer surcharges and shareholder contributions from major investor-owned utilities, including SCE, PG&E, and SDG&E.
Governor Gavin Newsom is pushing legislation to raise an additional $18 billion to bolster the fund, with a goal of increasing its capacity in light of massive wildfire damages. The proposed revisions include extending the fund’s sunset date to 2045 from the current 2035 and capping insurers' subrogation claims on the fund.
There is opposition to the expansion plan, with utility executives preferring to replenish the fund through ratepayers rather than shareholders. Insurers, on the other hand, warn that capping subrogation claims might lead to higher insurance rates or reduced private coverage in wildfire-prone areas.
Edison International, the parent company of SCE, is discussing potential revisions of the statute that created the California Wildfire Fund with lawmakers and stakeholders. Pedro Pizarro, president and CEO of Edison International, believes state regulators will find that SCE took reasonable steps to prevent the Eaton Fire. Pizarro also aims to reassure investors that the Eaton Fire will not impact the company's financial performance.
The long-term durability of the California Wildfire Fund has been raised as a question due to the magnitude of recent fires. State lawmakers seem motivated to ensure the fund remains viable, with Newsom expressing a sense of urgency regarding the need to extend the California Wildfire Fund or make changes.
Negotiations regarding the methodology for testing SCE's equipment are ongoing between SCE and litigants. The process of testing could take weeks due to the involvement of multiple plaintiff's attorneys. Edison International may seek reimbursement for any claims against the company from California's state-run wildfire fund.
References: 1. California Wildfire Fund 2. California Legislative Information
- The California Wildfire Fund, a state-established entity to limit utility companies' liability for wildfire damages, is currently under discussion for expansion due to its potential insufficiency in light of massive wildfire damages, as proposed by Governor Gavin Newsom.
- Southern California Edison (SCE), a major utility company in California, is facing multiple lawsuits related to the Eaton Fire, and is currently involved in negotiations regarding the methodology for testing its equipment, with the possibility of seeking reimbursement for any claims against the company from California's state-run wildfire fund.
