Edison wants to raise rates to pay for wildfires linked to its equipment

Southern California Edison is asking state regulators to make its customers cover more than $7 billion in damages it paid to the victims of two devastating wildfires in 2017 and 2018.

At its meeting Thursday, the California Public Utilities Commission will consider Edison’s request to pass on to its ratepayers $1.6 billion in damages from the 2017 Thomas wildfire in Santa Barbara and Ventura counties, one of the largest fires in state history.

The commission at a later date will consider a similar action that would tap Edison customers to cover $5.4 billion in damages from the 2018 Woolsey fire in Ventura and Los Angeles counties, which killed three people.

If both measures are approved, Edison customers will have a roughly 2% surcharge on their bills for the next 30 years, according to regulatory documents. That means the average monthly bill for a residential customer, now $177, would rise to $181.

Investigators found that Edison’s equipment ignited the Thomas and Woolsey wildfires. Utility safety regulators found that in each case Edison had violated multiple state safety regulations, including impeding their investigations.

Edison, which is contesting claims that its equipment also ignited this month’s deadly Eaton fire, said in a statement last year that transferring Thomas fire damage costs to customers would enable it to “continue doing necessary work to mitigate the effects of climate change.”

The company said it had “prudently operated its system, managing it at or above what is required by regulators.”

Dozens of people have written to the state commission, asking the panel to deny the request. Theresa Serventi of Hemet said as a retired person she was already struggling to pay her rising electric bill on a fixed income.

“They cannot and must not be allowed to punish their customers for their wrongdoing,” Serventi wrote after Edison filed its request to raise electric rates to cover the Thomas fire claims.

The Thomas fire killed two people and also helped cause the debris flows in Montecito that killed 23 more.

Fadia Khoury, Edison’s assistant general counsel, noted that under the settlement negotiated with the commission’s public advocates office the company would get only about 60% of the $2.4 billion it originally requested for the Thomas fire. About 40% — or about $1 billion — would be picked up by the company and its shareholders.

Low-income customers will see no increases to their bills for the recovery of costs from either fire, Khoury said.

The Wild Tree Foundation, an environmental group, also is calling on the commission to vote against the Thomas fire settlement agreement. The group says that documents from investigators at the California Department of Forestry and Fire Protection, the Ventura County Fire Department and the commission’s safety and enforcement division show that Edison “failed to act reasonably and prudently.”

“This is not the first time the commission has bailed out utilities for catastrophic wildfires and it will likely not be the last,” said April Maurath Sommer, the foundation’s executive director.

If the commission approves the plan Thursday, Sommer said, Edison would recover most of what it paid to victims of the Thomas fire “by raising electricity rates on those very victims themselves.”

The Thomas fire swept through almost 282,000 acres in Ventura and Santa Barbara counties, destroying 1,063 structures.

Investigators said Edison’s equipment was the cause of two separate ignitions Dec. 4, 2017, near Santa Paula. The two fires then spread and eventually merged.

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. The division said Edison had failed to provide all the photos, notes and texts taken by the Edison employees who were the first at the scene.

Khoury said Edison disagreed with investigators that the company was negligent in causing the Thomas fire. The company also disagrees that its equipment sparked one of the ignition sites, she said.

“We are operating a complicated business as safely as we can,” she said.

Terrie Prosper, a spokeswoman for the utilities commission, said that although the agency’s enforcement staff identified the violations, the five-member commission later did not find any violations related to the Thomas fire.

The Thomas and Woolsey fires occurred before the state Legislature created a wildfire insurance fund. That fund would help to cover some costs if investigators find that Edison’s equipment sparked the firestorm that started in Eaton Canyon on Jan. 7. At least 17 people have died.

The company says that its initial internal investigation did not find that its equipment started the fire, and that the investigation is continuing. Lawyers representing victims of the fire disagree. They point to videos of the fire starting below one of the company’s transmission towers built high in the canyon.

Edison’s application to transfer $5.4 billion it paid out to victims of the Woolsey fire to customers is still being reviewed by state officials.

The Woolsey fire started Nov. 8, 2018, on the site of the old Santa Susana test lab near Simi Valley. High winds sent it raging across almost 97,000 acres, destroying 1,643 structures and killing three people.

Investigators determined that a loose down guy wire attached to a steel pole contacted a jumper wire, creating an arc flash. The arc flash caused hot metal fragments to drop and ignite dried brush, the investigators said.

Prosper at the commission said that Edison had contested all 26 violations found by its safety and enforcement division after its investigation into the Woolsey fire.

Edison says that in recent years it has spent heavily on work to mitigate wildfires, including trimming trees and putting in wires with a coating that greatly reduces the risk of fire.

That wildfire mitigation work now makes up about 11% of the average bill for an Edison customer, according to the commission’s public advocates office.

The company says that work has reduced the risk of a catastrophic wildfire ignited by its equipment by 85% to 90% compared with what it was before 2018.

The number of ignitions involving its equipment have not fallen as much, according to data the company reported to the commission.

In 2017, there were 105 ignitions involving Edison’s equipment. That number rose to 173 ignitions in 2021. Last year, there were 90 ignitions — a 14% decline since 2017.

Khoury said the reduced risk of catastrophic wildfire should not be compared with reductions in the number of ignitions, which would include even those happening in rainy weather.

The commission’s meeting is scheduled for 11 a.m. Thursday. The five-member panel has put the decision on the consent agenda, which means it is expected to pass without discussion. The panel allows the public to speak at the start of the meeting.

People can also comment at the commission’s website under proceeding 23-08-013.