Edison Raises California Fires Loss Estimate to $7.5 Billion

(Bloomberg) -- Edison International’s Southern California Edison raised its estimated losses from 2017 and 2018 wildfires to $7.5 billion after reaching a settlement over the blazes with state regulators. 

The owner of the largest electric utility in Southern California said it agreed to pay a total of $550 million for violations found by investigators of the California Public Utilities Commission related to five wildfires, including the Woolsey and Thomas fires, according to a statement Tuesday. The company had previously estimated its total losses from the blazes at $6.2 billion. 

The 2018 Woolsey Fire tore through parts of the seaside town of Malibu, destroyed more than 1,600 structures including the homes of singer Miley Cyrus and rocker Neil Young, and killed 3 people. The Thomas fire consumed almost 300,000 acres north of Los Angeles in late 2017, killing two people and destroying more than 1,000 structures.

Edison didn’t admit imprudence, negligence or liability as part of the agreement with regulators, Chief Executive Officer Pedro Pizarro said Tuesday during a call with investors. 

The settlement costs include a $110 million fine to be paid to the California general fund, $65 million of shareholder-paid safety measures and an agreement by SoCal Edison to waive its right to seek cost recovery for $375 million in third-party uninsured payment claims. 

Edison disclosed the regulatory settlement and revised total fire loss estimate as part of its third-quarter earnings. The Rosemead, California-based company reported a quarterly loss of $341 million, or 90 cents a share, compared with a loss of $288 million, or 76 cents a share, a year earlier. 

Pizarro said the company settled $485 million in fire claims for the quarter and has now resolved about 70% of the estimated claims. 

(Updates with CEO comment in the fourth paragraph)

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