Southern California Edison Seeks Approval for Settlement Agreement

(Reuters) – Southern California Edison, a unit of utility Edison International (NYSE:EIX), announced on Thursday its intent to seek approval for a settlement agreement aimed at recovering nearly 60% of losses related to wildfires and mudslides that occurred in 2017 and 2018.

Agreement Details

Under the proposed agreement with the California Public Utilities Commission, if approved, the company would be authorized to recover approximately $1.6 billion of the $2.7 billion in losses tied to the Thomas Fire, Koenigstein Fire, and Montecito Mudslides.

The settlement would cover $1.3 billion in uninsured claims paid until May 31, along with $300 million in legal and estimated financing costs.

Wildfires Overview

The Thomas Fire, which began on the night of December 4, 2017, burned over 280,000 acres (113,312 hectares) or about 440 square miles, including more than 150,000 acres of National Forest System land in Santa Barbara and Ventura counties.

The incident resulted in two fatalities and more than 1,300 damaged or destroyed structures. Authorities cited the utility’s power lines as a cause of the fire, although Edison International contended that the fire started at least 12 minutes before an issue occurred with its equipment.

Additional Payments

Earlier this year, Southern California Edison agreed to pay the U.S. $80 million to offset costs and damages incurred by the U.S. Forest Service due to the fire.

The proposed settlement would also allow the company to recuperate about $55 million of the total restoration costs amounting to $65 million. Furthermore, Edison International has committed to $50 million for wildfire and public safety-related system upgrades funded by shareholders.