California’s Wildfire Fund, a state pool created six years ago to keep utilities out of bankruptcy if they are found responsible for massive property losses, could be headed into uncharted territory with the Eaton fire.
State lawmakers established the fund in 2019 after Pacific Gas & Electric filed for Chapter 11 bankruptcy in the face of tens of billions of dollars in damages from a series of catastrophic fires triggered by the utility in Northern California, including the inferno that tore through the town of Paradise.
If Southern California Edison is found to have ignited the Eaton fire, which destroyed more than 9,400 structures and killed 17 people, the utility would be eligible to tap the state fund to avoid the same fate.
“This (Eaton) fire is going to be the first pressure test for the California Wildfire Fund,” predicted attorney Alexander Robertson, whose firm is suing SCE, alleging a power line sparked the fire. More than 40 such lawsuits have been filed against SCE in the Eaton fire since a video surfaced that implicated high-voltage lines in starting the blaze.
“Everyone is curious to see how this is going to work because we’ve never been here before,” Robertson said.
Asked whether SCE is considering using the fund, spokesperson Kathleen Dunleavy responded by email, “This is too early to speculate.”
$12 billion in liquid revenue
The state fund has $12 billion in liquid revenue but has been approved for up to $21 billion to help pay for damages from any wildfires sparked by its three investor-owned members: PG&E, SCE and San Diego Gas & Electric. The utilities’ shareholders are responsible for half of the $21 billion and ratepayers will be slowly charged the balance in their monthly bills through 2035.
The Los Angeles Department of Water and Power is not eligible to tap into the wildfire fund because the publicly owned utility did not contribute to it and their ratepayers don’t pay into it. That means the LADWP would be on its own to…
Read the full article here
