SoCal Edison to Pay $80 Million In Settlement Over 2017 Thomas Wildfire

The United States Attorney’s Office of the Central District of California announced this week that the electric utility company Southern California Edison (SoCal Edison) has agreed to pay $80 million to resolve a lawsuit on behalf of the U.S. Forest Service over costs and damages stemming from the 2017 Thomas Fire in the Los Padres National Forest.

The Thomas Fire, which burned through Ventura and Santa Barbara Counties between December 2017 and March 2018, was the eighth largest in state history, burning 440 square miles, destroying 1,063 buildings and directly causing the deaths of two people. In addition to the two deaths, a further 21 deaths in and around Montecito from mudslides caused by the fires removing areas of trees also occurred later in 2018.

According to investigators, SoCal equipment had sparked, causing the fires to begin. Following this finding, the lawsuits and fines rolled in throughout the late 2010s and early 2020s. In September 2020, SoCal Edison reached a $1.16 billion settlement agreement with insurance companies over both the Thomas Fire and the Montecito mudslide. The next year, SoCal Edison reached another agreement, this time with the California Public Utilities Commission (CPUC), paying a $550 million settlement over 5 fires associated with them, including the Thomas Fire. However, as part of the settlement, the company did not admit fault.

However, outstanding costs with the federal government remained, leading to yet another settlement on Monday, ending a four year legal battle. While the company once again did not admit fault, they did have to pay another $80 million over damages to the National Forest and costs associated with fighting the fire.

“This record settlement provides significant compensation to taxpayers for the extensive costs of fighting the Thomas Fire and for the widespread damage to public lands,” said First Assistant United States Attorney Joseph T. McNally in a statement. “The United States Attorney’s Office will continue to aggressively pursue compensation from any entity that causes harm to our forests and other precious national resources.”

SoCal Edison was quiet on the settlement, simply noting that the settlement was “a reasonable resolution” and that further efforts were being made to avoid such fires and equipment malfunctions in the future.

Rate Hikes

Despite the case now being over, many customers and industry experts worry that SoCal Edison might introduce a rate hike sometime in the near future to help pay for all the upgrades. Last year, PG&E raised electric bills for 16 million people by an average of $32 per month in an effort to help pay for more underground lines and other advances to deter wildfires in the future. This action was met with uproar by PG&E customers, with many saying they had to pay for mistakes caused by the company, such as the 2018 Camp Fire, which killed dozens of people in the town of Paradise and cost PG&E $13.5 billion in settlements with the victims  alone.

With SoCal Edison racking up similar figures, many worry that they might try the same. While SoCal Edison has had more rate hikes nixed by regulators in the past than PG&E, such as a recent attempted rate hike to increase electrification of fossil fuel utilities, hikes to combat wildfires have already been happening. The 2024 annual rate hike increase shot up to 17%, with one of the main reasons given as allowing “the company to mitigate financial risks related to California’s wildfires.” The settlement on Monday led to more fears that it could go even higher.

“There are many costs that are out of utility companies hands, and others that are necessary, so rate hikes make sense and people expect them,” said former environmental lobbyist Margaret Horner to the Globe. “But rate hikes for something they caused is pretty low. Look how many people complained about the PG&E ones. It’s why they hide those reasons in the annual rate hikes, so its lumped in with all the other reasons. And to be fair to both customers and companies, taking steps to avoid wildfires is a good thing. It’s just how they’re doing it is low, charging the customer more. There’s plenty of other options like cutting dividends or finding alternate revenue streams. But they just add on more. So, keeping a close eye on SoCal Edison rate hikes will be a good thing, because they just might raise it even more after this settlement.”

More wildfire settlements are expected to be announced soon.