WILDFIRE FUND LEADS INEVITABLY TO SMUG UTILITIES

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, SEPTEMBER 30, 2025 OR THEREAFTER

 

BY THOMAS D. ELIAS
“WILDFIRE FUND LEADS INEVITABLY TO SMUG UTILITIES”

 

The tone has bordered on smug among executives of the Southern California Edison Co. ever since the Eaton Fire last January destroyed most of Altadena and some of neighboring Pasadena, consuming a total of about 9,400 structures and doing at least $27 billion worth of damage.

 

Edison has all but admitted some of its equipment sparked that fire, but somehow has acted as if it needs never even to worry about bankruptcy, the procedure its sister utility Pacific Gas & Electric Co. went through after its equipment sparked the fire that destroyed virtually all of Paradise in Butte County seven years ago.

 

Edison has even offered settlements to Eaton fire victims who lost homes: $900,000 in rebuilding money to owners of burnt typical 1,500-square-foot homes, plus a $200,000 reward for settling directly with the utility and more for pain and suffering. 

 

This move to defuse the myriad lawsuits against the utility is a first, made possible by the work Gov. Gavin Newsom, his legislative minions and his appointees to the state Public Utilities Commission did to protect PG&E and its fellow privately owned utilities from most liability when they cause fires in the future. Now Edison gets that protection.

 

The bailout mechanism invented by Newsom and friends in 2019 while consumer groups were advocating a breakup of PG&E, is known as the California Wildfire Fund. As part of the rescue, almost all customers of the three big private California utilities (San Diego Gas & Electric also benefits), now pay a $3 monthly surcharge on their bills to cover post-2019 fire damages caused by utilities. 

 

Even the $21 billion or so in the Wildfire Fund today might not be enough to cover all Edison’s prospective liabilities from the Eaton fire. So pending Newsom's expected signature, the Legislature this month agreed to extend the $3 monthly customer payments all across the state until 2045 rather than the previously scheduled 2035 expiration date.

 

That will up the Wildfire Fund $18 billion, half paid by Edison shareholders and half by customers.

 

Californians cannot blame President Trump for this, even if his firing thousands of Forest Service workers could help make this year’s fire season the most costly ever. This injustice sits squarely with Newsom, who appears unworried because the $3 fee is buried in most electric bills and rarely noticed by rate payers.

 

Myriad lawsuits from homeowners hit by the Eaton fire now charge Edison with failure to turn off the power to a transmission tower just above that fire’s generally accepted ignition point. The lawsuits claim Edison had ample warning of fire prone conditions, but still left the juice on. Those actions go away in cases where victims opt for Edison’s offers.

 

Final damage figures from the Eaton fire and the simultaneous Palisades fire are not certain and could almost double the current $27 billion estimate. Even if Edison’s payments are widely accepted, insurance companies would likely pay back much of that amount. Edison could also take a big drawdown from the Wildfire Fund, possibly leaving the fund broke.

 

All of which raises the question that dogged the original legislation creating the fund: Why are most California electric customers paying for damages caused by negligence or malfeasance from the state’s monopoly investor-owned utilities?

 

Customers did not cause the fires; in fact many are fire victims still trying to get fair settlements from their own insurance companies.

 

The upshot is that the swiftly and carelessly drawn legislation created solely to keep today’s companies in business despite self-made crises could prove both unfair to most consumers and inadequate to cover damages assessed to Edison and future perpetrators of other fires. 

 

Meanwhile, Edison’s chief executive Pedro Pizarro, when queried during the summer about prospects for an extension of the Wildfire Fund surcharge, correctly responded that “The governor’s office is engaged, as are our legislative leaders.” How smug could he sound?

 

The alternative could have been much simpler and more just: If proven negligent and/or careless, Edison and its utility brethren could have been forced into bankruptcy and then broken up, with cities, counties and the state picking up parts of the current infrastructure.

 

For if privately-owned utilities keep starting fires, why do they deserve their current monopolies, complete with billions yearly in guaranteed profits?

 

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    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net