By Jason Fordney
Edison International CEO Pedro Pizarro said the company is hopeful that several bills working their way through the California State Legislature will ease the financial pressure stemming from hundreds of millions of dollars in wildfire costs.
The company’s main subsidiary, Southern California Edison, is the target of civil lawsuits stemming from the Thomas Fire that began in December 2017 in Ventura County, Calif., burning about 440 square miles and causing two deaths. While the California Department of Forestry and Fire Protection, the Ventura County Fire Department and the California Public Utilities Commission’s Safety and Enforcement Division look into the causes of the fire, the utility is conducting it own investigation, Pizarro said.
During an earnings call Tuesday, Pizarro called for the state to implement wildfire mitigation operating standards to help determine whether a utility properly ran its transmission system prior to a fire.
“An updated standard of liability that considers degree of fault rather than the current standard of strict liability would ensure that there is a fair sharing of the increasing risk of climate change impacts across society,” Pizarro said. He said he was “heartened” by Gov. Jerry Brown’s comments in March about updating utility liability rules for wildfires. Three related bills have been introduced into the legislature: SB 819, SB 901 and SB 1088.
The third bill, set for a May 7 hearing at the Senate Committee on Appropriations, would allow utilities to recover wildfire costs if they conform to state-regulated safety plans, but it faces heavy opposition from critics who say it lets utilities off the hook for their contribution to wildfires. (See Calif. Legislation Shields Utilities from Wildfire Costs.)
Wildfire costs and the financial health of the state’s investor-owned utilities have sparked concerns in the capitol about the impact on utility stock prices and the potential for bankruptcies — shades of the electricity crisis of the early 2000s. (See Wildfire Costs Ignite Worry at CPUC, Legislature.)
Edison reported first-quarter net income from continuing operations of $242 million, compared with $392 million in the same quarter last year. Operating revenue was $2.5 billion in the first quarter, and total operating expenses were $2.2 billion. SCE is a waiting for a CPUC decision on its 2018 retail general rate case.
SCE on April 3 filed an application at the CPUC for a Wildfire Expense Memorandum Account to track incremental wildfire costs. The company is in the process of renewing its wildfire insurance for 2018 and 2019 and said the cost of additional insurance may substantially exceed the amount authorized in rates or in the pending 2018 rate case. The utility has proposed a schedule that would see a decision on the account issued by August.
The state’s three utilities have banded together on the wildfire issue after the CPUC last year denied San Diego Gas & Electric’s request to recover $379 million in wildfire-related costs. (See Besieged CPUC Denies SDG&E Wildfire Recovery.)