Southern California Utility Will Raise Rates to Help Pay for a Wildfire Settlement

State utility regulators on Thursday approved a settlement that will require Southern California Edison customers to foot about $1.7 billion in claims from the 2017 Thomas Fire and the resulting 2018 Montecito Debris Flows.

The company’s equipment, investigators previously found, caused the December 2017 fire, which burned more than 280,000 acres in Santa Barbara and Ventura counties, killing two people. Rainfall the following month led to debris flows that killed 23 people.

“It’s an agreement to settle contested claims that would have been litigated with an unknown result if this settlement is not adopted,” Alice Reynolds, president of the California Public Utilities Commission, said after the vote.

The settlement comes as Edison disputes evidence that its power lines may have ignited the Eaton fire in Los Angeles County earlier this month.

The agreement between the utility and ratepayers representative Cal Advocates is about $1 billion less than the utility originally requested be passed to customers. It passed 4-0 as part of the commission’s consent agenda. Commissioner Matthew Baker recused himself from the vote; he was head of Cal Advocates, which represents ratepayers before the commission, while the settlement was being hashed out.

“We’re pleased with the commission’s approval of the settlement,” said David Eisenhauer, spokesperson for Southern California Edison. “The settlement is a fair outcome given the evidence put forward by [Southern California Edison] and Cal Advocates.”

Those affected by utility-caused wildfires would typically have eligible claims paid out by the California Wildfire Fund, a state-run pool of money funded by the three major investor-owned utility companies — Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric. But the fund was established under a law signed by Gov. Gavin Newsom in 2019, after the Thomas fire.

As part of the agreement, Southern California Edison must set aside $50 million in shareholder funds over five years for wildfire mitigation costs, which customers will not be responsible for.

Because the decision was on the consent agenda, there was no discussion of the item at Thursday’s meeting.

The utility has also asked for the commission to have ratepayers pay for damages amounting to $5.4 billion for the 2018 Woolsey Fire. A decision on that request will be made at a later date.