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Dive Brief:
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Although investigations into the cause of January's Eaton Wildfire in Southern California remain ongoing, it seems “probable” that Southern California Edison will incur material losses in connection with the fire, Pedro Pizarro, president and CEO of parent company Edison International, told investors during a quarterly earnings call on Tuesday.
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Preliminary evidence, disclosed in February by SCE, indicates the company's equipment may have been involved in starting the fire. To date, neither SCE nor third party investigators have identified solid evidence to suggest that another source could have ignited the fire, Pizarro said.
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It could take 12 to 18 months for investigators to come to a conclusion about the cause of the fire, Pizarro said. Meanwhile, the company has opened discussions with state lawmakers about the future of California's wildfire insurance fund for utilities, which SCE plans to tap to pay any legal claims that may result from the fire.
Dive Insight:
Pizarro wouldn't rule out the possibility that the Eaton Fire could have been started by something other than SCE’s power lines. But three months after the fire began, the absence of any competing theories about its ignition suggest it is “probable” that the utility will be found liable for losses associated with the fire, he said.
SCE expects investigations into the cause of the fire to continue for a year or more and potential settlements with plaintiffs could be even further out, Pizarro said. The County of Los Angeles and the cities of Sierra Madre and Pasadena have already filed suit against SCE for damages related to the fire, which the California Department of Forestry and Fire Protection estimates burned 14,000 acres and destroyed more than 9,000 structures.
Pizarro declined to estimate the financial value of those damages, but said that third-party estimates he has seen remain within the scope of the California Wildfire Fund’s financial capacity. The recent occurrence of several catastrophic wildfires within a relatively short window of time has raised questions about whether the $21 billion fund will prove adequate to cover utilities' legal losses.
Experts who helped shape the fund also believe it should be able to cover the Eaton Fire damages, but worry it may not have enough left over to pay for the next catastrophic California wildfire.