Utilities pushed toward fire prevention as Edison is blamed for Thomas Fire

Pressure mounted on California utilities Wednesday to shift priorities to fire prevention, as investigators determined that Southern California Edison power lines sparked a major 2017 blaze that later resulted in a deadly mudflow.

A joint investigation of federal, state and local authorities found the Thomas Fire—like megafires last year and the year before in Northern California areas served by Pacific Gas & Electric Co.—was sparked by utility equipment.

In the Edison case, a so-called “line slap” brought power lines into contact with each other, creating an electrical arc that caused molten metal from the lines to ignite surrounding vegetation. The fire, which started Dec. 4, 2017, and raged for 40 days in Ventura and Santa Barbara counties, destroyed more than 1,000 structures, killed two people and led to a massive mudslide that claimed 20 more lives.

According to the Los Angeles Times, the finding puts Edison on the hook for more than $1.3 billion in insurance claims from fire victims and for $400 million in claims from the mudslides. Edison will have to work with insurance companies to handle thousands of claims.

Heightened fire risks in the era of climate change are already battering utilities in the market, as rating services, concerned about soaring liability, have lowered their bond ratings and increased their borrowing costs.

PG&E has filed for bankruptcy, admitting last month that its transmission line likely triggered the 2018 Camp Fire, the deadliest blaze in state history. That utility, the state’s largest, recorded a $10.5 billion charge in anticipation of damage claims for that Butte County fire.

Edison can take advantage of a state law passed last year that makes it easier for utility companies to absorb the cost of fire damages by borrowing from the state and charging customers to pay back the bonds over many years, a procedure called securitization.

Under SB 901, the state can take into account the financial health of the company; a five-member Commission on Catastrophic Wildfire Cost and Recovery would help regulators decide whether utilities can pass costs onto customers. In January, PG&E opted to file for Chapter 11 reorganization rather than wait for the state to establish that regulatory approval process, contending that bankruptcy was its only option as access to capital dwindled.

But on Wednesday, the Southern California utility argued that SB 901 isn’t enough, arguing in a statement that utilities need more liability relief “to address the critical issues of fire prevention, enhanced suppression efforts and fair cost allocation rules.”

Meanwhile, legislators representing the communities impacted by the Thomas Fire said they’d like to see utilities do more on their own to address their historic failure to invest in fire safety.

“The Thomas Fire and the January 9th Debris Flow have left serious scars in our community,” said Assemblywoman Monique Limόn in a statement to CALmatters. “I am hopeful the full report will include concrete steps on how we can prevent this in the future.”

“Best practices, best available technologies, they are out there,” added Sen. Hannah-Beth Jackson. “It’s just that, frankly, PG&E in particular but Edison to some extent have failed to commit to these more protective kinds of infrastructure and I think now they will be required to do so. It’s my hope they will because to protect the safety and security of life and property and our economy, it’s going to be critical they do so.”

Jackson noted that after San Diego Gas & Electric was unable to pass costs from a 2007 blaze onto customers, it invested heavily to protect its equipment and hasn’t experienced a major wildfire since.

“Clearly,” she said, “we need to hold Southern California Edison responsible and make the victims whole and ensure that they take all the preventative steps possible to ensure this doesn’t happen again.”

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