Utilities push special session to shield shareholders from wildfire costs Play

Southern California Edison and the other big utilities in California are asking the governor to call the legislature back in a special session this fall. They want ratepayers to pay any future damages for wildfires caused by power company negligence. They want the governor to bring in lawmakers to debate how to reduce the utilities' fire risks and put in a possible limit on what their shareholders would have to pay for utility company negligence.

The utilities say their shareholders need to be shielded because the wildfire worries on Wall Street have damaged the power company credit ratings. That means they have to pay more to borrow money, an increased cost that gets passed on to their ratepayers — not to mention that it also threatens the dividend payments that go to shareholders, plus the multi-million-dollar bonuses paid to power company executives.

The executives at Southern California Edison recently told their investors that without liability protection from the legislature, they may spend less on capital improvements, including undergrounding power lines.

Edison looks like it is on the hook for billions of dollars of damages from the Altadena fire, the Eaton fire, but also for a smaller amount of damages for the Palisades fire in Malibu. The company is arguing that it was not negligent in either fire.

If SCE is found to be negligent, it will not be able to tap into a state savings account — money from ratepayers that has already been paid — for damages. A state report has already pointed the finger at Edison for being negligent in the Altadena fire. SCE's president has told investors that the power company thinks they acted prudently.

It will be up to the California Public Utilities Commission to decide that, and whether Edison can use the $21 billion state wildfire fund to pay off its damages, or if that bill goes to the shareholders.