Light shed on Edison’s potential liability in L.A. region’s east-side fires

Southern California Edison reported to state regulators Thursday that its equipment may have played a role in sparking the Hurst Fire that burned nearly 800 acres in Sylmar last month and investigators are looking at Edison as a potential source of the much larger Eaton fire.

Both fires hit communities nestled into, or that back up to, Angeles National Forest on Los Angeles County’s east side. The Eaton fire has been classified by the California Department of Fire and Forestry as the state’s second most destructive historically.

Sylmar is at the northern tip, while Pasadena and Altadena, wracked by the destructive path of the Eaton fire, are nestled against the mountain range’s southeastern segment.

The source of the smaller Hurst fire in Sylmar — further north on Los Angeles’ east-side than the Eaton fire — has been tracked to a SoCal Edison transmission tower where downed lines were discovered.

The Hurst resulted in thousands of people being evacuated and caused damage to two homes, but no reported injuries. The Eaton fire burned more than 14,000 acres and destroyed thousands of homes and businesses.

SoCal Edison submitted two letters to the California Public Utilities Commission providing updates on its ongoing analysis into the origin of the Eaton and Hurst wildfires that began on Jan. 7 in accordance with state reporting requirements, according to the company. The reports follow an interim update on the Eaton Fire submitted to the CPUC on Jan. 27.

“While SCE’s investigation remains ongoing, SCE has taken immediate steps to further strengthen and standardize its grounding practices with respect to idle lines,” the company said in a regulatory filing.

The utility hasn’t determined if its equipment is also responsible for the much more destructive Eaton fire, but an inactive power line near the source of that fire is being considered as a potential source, according to its latest filing with the CPUC.

“While we do not yet know what caused the Eaton wildfire, SCE is exploring every possibility in its investigation, including the possibility that SCE’s equipment was involved,” said Pedro J. Pizarro, president and CEO of SCE’s parent company, Edison International.

“We have been fully engaged since the start of the fires in supporting the broader emergency response, containment, recovery and investigation efforts.”

Information and data have come to light, such as videos of the fire’s early stages, “suggesting a possible link to SCE’s equipment, which the company takes seriously. SCE has not identified typical or obvious indications that would support this association, such as broken conductors, fresh arc marks in the preliminary origin area, or evidence of faults on the energized lines running through that area,” according to the utility.

It could take months for fire investigators to determine the cause of the Eaton fire, but SoCal Edison is already facing the threat of several lawsuits from plaintiff’s attorneys, which could result in billions of dollars in liability.

S&P Global Ratings revised the outlook on Southern California Edison and its parent company to negative on Feb. 3, citing the potential depletion of the state’s bond wildfire fund created by California lawmakers to bail out investor-owned utilities facing wildfire liability risk. S&P affirmed the BBB issuer credit ratings on the parent company and the SoCal subsidiary’s debt.

S&P said in its report that given the extent of the potential liabilities, the wildfire fund could be “at risk of material depletion.”

The seed money for the $21 billion bond fund, established in 2019, came from up to $10.5 billion in Department of Water Resources bonds to be matched with $10.5 billion from the utilities. It was established to act as a line of credit for utilities to cover wildfire damages and limit the financial obligations of ratepayers.

The outlook “reflects the number of structures that have been damaged or destroyed (over 10,000) due to the Eaton fire, and the possibility that SCE’s equipment may be linked to the fire,” S&P analysts wrote.