Southern California Edison requested approval of a settlement agreement today that will allow recovery of wildfire-related costs so the company can continue doing necessary work to mitigate the effects of climate change.
In August of 2023, SCE asked the California Public Utilities Commission to allow recovery of $2.4 billion in claim settlement costs and expenses related to the 2017 Thomas Fire and 2018 Montecito debris flows.
In recent months, SCE has worked with the California Public Advocates Office to reach a fair agreement.
Upon approval by the CPUC, today’s filing will grant partial recovery:
- SCE will recover approximately $1.6 billion from customers, or 60% of its request, inclusive of costs incurred after the filing.
- Edison International shareholders will cover approximately $1 billion and fund $50 million of system enhancements to further mitigate wildfire risk and make SCE’s system safer for customers and communities.
- About $55 million of the costs to restore service after the Thomas Fire will be recovered from customers, and almost $10 million of these needed restoration costs will be paid for by Edison International shareholders.
After the CPUC approves the settlement, SCE plans to seek approval to spread the costs over 30 years, so most residential customers will pay about $1 more on their monthly SCE bills. Income-qualified customers participating in CARE and FERA programs will not pay more on their bills because of this settlement.
“The people who lost their lives, family members, homes and businesses will always be in our hearts,” said Pedro J. Pizarro, president and CEO of Edison International. “Climate change is driving catastrophic wildfires, and SCE will continue its work to mitigate the effects of climate change and harden the electric system. This settlement will help provide long-term financial certainty that will allow the utility to do that work.”
In 2017, the Thomas Fire started in two locations – one which involved SCE equipment, while SCE believes the other was not started by SCE equipment. In both locations, SCE prudently operated its system, managing it at or above what is required by regulators. In early 2018, while the Thomas Fire was still burning, debris flows devastated the Montecito area because of inadequate governmental flood control infrastructure and deficient evacuation communications.
SCE settled claims related to these incidents, many of which were filed under a legal concept known as inverse condemnation that some courts have interpreted in a way that makes the utility liable for wildfire costs even if it wasn’t negligent and even if it acted entirely reasonably while operating its equipment. SCE disagrees with that interpretation.
SCE will continue its wildfire mitigation work. The utility has already installed 5,900 miles of covered conductor and continues to enhance operational practices and improve situational awareness with weather stations and wildfire cameras — technologies that the utility makes available to local emergency services and firefighting agencies. Through that work, plus the strategic use of Public Safety Power Shutoffs, SCE has reduced the risk of catastrophic wildfire by 85% to more than 90% compared to 2018 levels.
The settlement acknowledges there are always opportunities for utilities to further enhance their efforts. This includes studying industry best practices and piloting and evaluating other technologies that can further reduce wildfire risk in SCE’s service area.
