SoCal Edison customers face $1.6 billion bill for Thomas Fire settlement

In December 2017, the Thomas Fire ignited in Ventura and Santa Barbara counties, eventually becoming the largest recorded wildfire in California history, scorching over 280,000 acres. The devastating fire triggered mudslides in Montecito weeks later, resulting in the tragic deaths of 23 individuals. In response to the destruction caused by the fire and subsequent mudslides, the California Public Utilities Commission allowed Southern California Edison to recoup $1.6 billion in settlement costs from its ratepayers. This decision followed an agreement with the California Public Advocates Office to address claims related to the incident. The approval by the California Public Utilities Commission of a 4-0 vote enabled the utility company to shift the burden of settlement costs onto customers, a move characterized as necessary to settle contested claims that would have required extensive litigation otherwise. SoCal Edison argued that it had managed its operations prudently prior to the incident and attributed the tragic outcomes in Montecito to inadequate governmental flood control infrastructure. Additionally, the settlement includes a provision to credit customers in case certain cross-claims yield recoveries. Edison International shareholders are also contributing to the financial implications, taking responsibility for approximately $1 billion and committing another $50 million toward system enhancements designed to reduce wildfire risks. The financial handling of the disaster was facilitated by legislation such as Assembly Bill 1054, which established an insurance fund to cover wildfire-related expenses, although this did not apply to events occurring before January 1, 2019, such as the Thomas Fire. The impact of climate change on the frequency and intensity of wildfires was emphasized by Edison officials, who declared their commitment to ongoing efforts aimed at mitigating climate change and enhancing the safety of their electric systems. As California faces an increase in wildfire activity linked to changing climate conditions, SoCal Edison’s actions highlight the challenges utilities face in balancing operational costs with safety and prevention measures.