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The devastating Eaton fire, which erupted in January, could lead to increased utility bills for over 30 million Californians. If Southern California Edison equipment is found to have sparked the blaze, as alleged in numerous lawsuits, the damage claims could deplete the state's $21-billion wildfire fund. The fire, which caused significant destruction in Altadena, killed 18 people and destroyed more than 9,000 structures.
An early estimate places fire losses between $24 billion and $45 billion. If the state's wildfire fund is exhausted, officials may consider extending a monthly utility bill surcharge beyond its planned expiration in 2035. This surcharge, known as the non-bypassable charge, currently adds about $3 to the average residential bill. According to the Los Angeles Times, extending the fee by an additional 10 years could require customers to contribute an extra $9 billion to the fund.
The wildfire fund was established to protect California's three major utilities—Edison, Pacific Gas & Electric, and San Diego Gas & Electric—from bankruptcy in the event of liability for massive fire damages. Edison International, Southern California Edison's parent company, has access to a billion-dollar self-insurance fund and plans to use the state wildfire fund if necessary. However, the cause of the Eaton fire remains under investigation, and it could take 12 to 18 months to determine the exact cause.
Edison International CEO Pedro Pizarro noted that the company had taken extensive measures to prevent fires, including grid hardening and public safety power shutoffs. He expressed confidence that state regulators would find the company took reasonable steps to prevent the fire. Utility Dive reports that Edison is in discussions with lawmakers and stakeholders about potential revisions to the statute that created the wildfire fund to ensure its long-term viability.
Consumer advocates, however, argue that ratepayers have already contributed significantly to the fund and should not bear additional costs. Mark Toney, executive director of The Utility Reform Network, stated, "We think ratepayers have more than done enough." The state legislature is considering various options to address the issue, but no solution has been reached yet.