December 7, 2022 Breaking News, Latest News, and Videos

Fire Ruling Has Huge Effect on Utilities

By Tom Elias

Thomas B. Elias, Columnist

Under intense political pressure at the same time bone-dry Santa Ana and Sundowner winds propelled unchecked wildfires across Southern California in early December, the California Public Utilities Commission handed down perhaps its most consumer-friendly decision in several decades.

Unanimously, the five commissioners forced the San Diego Gas & Electric Co. – not its customers – to pay more than $379 million in uninsured costs from the 2007 Witch, Guejito and Rice fires that devastated large parts of San Diego County, destroying more than 1,300 homes and killing two persons. SDG&E had tried to fob those costs off on consumers, including some whose homes burned in the same fires.

The commissioners also were unanimous in imposing new, stricter rules for utilities to help stem future wildfire risks.

Investigators found SDG&E failed before the 2007 fires to properly maintain its equipment, failing to trim tree branches and chaparral growing near power lines, which arced and sparked as those infernos began. The company and its insurers paid more than $2 billion in claims, but it wanted customers to foot almost all the remaining bills.

The PUC previously went along with similar utility company requests, but this time, for once, commissioners stood by consumers.

Multiple results were immediate: While the Lilac Fire raged in late fall in north San Diego County, SDG&E turned off power to as many as 170,000 persons when winds propelling the new blaze picked up. So arcing power lines could not contribute to this fire disaster. A lot of folks living in areas around Boulder Creek and Palomar Mountain were inconvenienced, but this time the fire destroyed “only” 157 structures, not 10 times that many.

Knowing it might actually have to pay very steep costs if it kept the power on, the utility played it safe. No one can be certain whether that action or lessened wind was the main factor that kept the Lilac Fire much smaller than some previous ones. But cutting the power certainly didn’t hurt, counter though it is to hallowed utility company practices that aim to keep the juice flowing no matter what.

The PUC’s landmark decision was also felt in other areas of California, where fires both in December and earlier in the fall devastated hundreds of thousands of acres in places like Napa, Sonoma, Orange and Ventura counties, Santa Clarita, Montecito and the Bel-Air, Sylmar and Tujunga Canyon sections of Los Angeles.

No, neither Pacific Gas & Electric Co. nor Southern California Edison Co. nor the Los Angeles Department of Water & Power made prophylactic power shutdowns like those near San Diego, but both PG&E and Edison were sorely affected. PG&E suspended dividends while watching its stock tank by 9 percent in December, largely because of potential liability from the many fire-related lawsuits it faces.

And while the Thomas fire blitzed through Ventura County and on toward Santa Barbara, the stock value of Edison’s parent company, Edison International, fell as much as 15 percent. There is no official finding yet on the cause of that fire, which has consumed more than 700 homes and spurred at least two fatalities. But investors and stock analysts fear Edison, like SDG&E, might have to pay not only billions of dollars for damage, but also might never see its own repair and service restoration costs returned.

The same for PG&E, whose customer lawsuits stem from reports of PG&E lines sparking into nearby vegetation just as devastating October blazes got underway in the Wine Country. PG&E’s dividend decision shows management feels the same fears as investors.

The PUC’s decision was key to much of the stock market response to the fires, just as it probably spurred SDG&E to shut down its power, even though the company never copped to that. For if these utilities are now to be held more responsible than before for their errors and neglect, their financial futures will be affected.

And yet, no one knows what the PUC might do years from now when utilities inevitably demand that customers pay most of their costs from this year. That’s one reason for paying close attention to the next governor’s appointments to this vital, but scandal-compromised, commission.

Related Posts

A SMa.r.t. Thanksgiving

November 23, 2022

November 23, 2022

SMart has much to be thankful for this year: We are thankful for the courage of all who face death...

SMa.r.t. Column: Renting and Owning. The Santa Monica Long View

November 18, 2022

November 18, 2022

In May, 2020, SMa.r.t. urged the city to consider establishing community land trusts, in which community-owned land is leased at...

SMa.r.t. Column: Santa Monica Housing Development – Poison Pills, Bad Data and the Blame Game

November 11, 2022

November 11, 2022

Prior councils have made long term decisions that have locked the city into an extraordinarily fixed path, the consequences of...

Column – Gas Gougers Beware: California Is Onto You at Last

November 11, 2022

November 11, 2022

By Tom Elias It has taken more than 50 years of on-and-off gasoline price gouging, but at long last California...

Video: Santa Monica College on Measure SMC

November 7, 2022

November 7, 2022

Enjoy this live interview with Measure SMC campaign co-chair Shari Davis in this paid segment.

Video: Santa Monica Police Officers Association on Their Election Endorsments

November 7, 2022

November 7, 2022

Santa Monica Police Officers Association Vice Chair Carlos Madrid joins the Santa Monica Mirror for a paid segment on the...

Santa Monica Mirror 2022 Election Endorsements

November 4, 2022

November 4, 2022

By the Santa Monica Mirror Editorial Board Santa Monica City Council Albin Gielicz  Albin has been involved with the community...

S.M.a.r.t. Election Recommendation

November 4, 2022

November 4, 2022

Editor’s note: The following endorsements should not be attributed to the Santa Monica Mirror. They are the opinion of Santa...

Letter to the Editor Santa Monica Mirror: In Response to Mr. Schwich’s Letter of November 1, 2022

November 3, 2022

November 3, 2022

Mr. Schwich, an employee of the United States Tennis Association, made many serious and disingenuous allegations in his letter to...

Letter to the Editor: Tennis v Pickleball (and the City of Santa Monica)

November 1, 2022

November 1, 2022

In communities both large and small across America, the debate involving tennis and pickleball has become increasingly louder. But in...

Column: Who’s the ‘True’ Democrat in CD-11?

October 30, 2022

October 30, 2022

So who is the true Democrat in this race to succeed Mike Bonin in CD-11? While the campaign for city...

SMa.r.t. Column: Santa Monica’s Pending Apocalypse

October 28, 2022

October 28, 2022

Editor’s note: The following endorsements should not be attributed to the Santa Monica Mirror. They are the opinion of Santa...

Column: Follow the Money This Election Season

October 27, 2022

October 27, 2022

By David G. Brown Earlier this month I read with great interest the coverage of local campaign finance filings and...

Column: Excess School Lands for Teacher Housing?

October 22, 2022

October 22, 2022

By Tom Elias, Columnist Do voters want more teachers living in their communities, even if it means a little more...

SMa.r.t. Column: 4500+ Units Permitted!

October 22, 2022

October 22, 2022

In the last month your City was forced by the State of California to approve the construction of about 16...