SCE requests regulators approve wildfire cost recovery settlement

Southern California Edison (SCE) recently filed a settlement agreement with state regulators that, if approved, would help the utility recover more than a billion dollars in wildfire-related costs.

“Climate change is driving catastrophic wildfires, and SCE will continue its work to mitigate the effects of climate change and harden the electric system,” said Pedro Pizarro, president and CEO of SCE’s parent company, Edison International. “This settlement will help provide long-term financial certainty that will allow the utility to do that work.”

In August 2023, SCE asked the California Public Utilities Commission (CPUC) to allow recovery of $2.4 billion in claim settlement costs and expenses related to the 2017 Thomas Fire and the 2018 Montecito debris flows.

In recent months, SCE has worked with the California Public Advocates Office to reach an agreement that, upon approval by the CPUC, would grant partial recovery.

For instance, Edison International said in an Aug. 29 statement that SCE would recover approximately $1.6 billion from customers, or 60 percent of its request, inclusive of costs incurred after the CPUC filing.

Edison International shareholders would cover roughly $1 billion and fund $50 million of system enhancements to further mitigate wildfire risk and make SCE’s system safer for customers and communities, the company said in a statement.

About $55 million of the costs to restore service after the Thomas Fire would be recovered from customers, and almost $10 million of these needed restoration costs would be paid for by Edison International shareholders.

If the CPUC approves the settlement, SCE also plans to seek approval to spread the costs over 30 years, so most residential customers then would pay about $1 more on their monthly SCE bills, while low-income customers participating in CARE and FERA programs would not pay more on their bills because of the settlement.

In 2017, the Thomas Fire started in two locations where SCE operated its system. And in early 2018, while the fire was still burning, debris flows devastated the Montecito, Calif., area because of inadequate governmental flood control infrastructure and deficient evacuation communications, according to Edison International.

“The people who lost their lives, family members, homes and businesses will always be in our hearts,” Pizarro said, noting that SCE settled claims related to those incidents and is continuing its wildfire mitigation work.

For example, SCE has already installed 5,900 miles of covered conductor and continues to enhance operational practices and improve situational awareness with weather stations and wildfire cameras. The utility also uses Public Safety Power Shutoffs, which have reduced the risk of catastrophic wildfire by 85 percent compared to 2018 levels.

The SCE settlement also acknowledges there are always opportunities for utilities to further enhance their efforts, such as studying industry best practices and piloting and evaluating other technologies that can further reduce wildfire risk in its service area.

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