Though no utilities have been blamed for the deadly wildfires in Los Angeles so far, stakeholders have cautioned that companies like Southern California Edison are not completely out of the woods and still face financial and legal risk.
Commenting on the wildfires in a Jan. 16 newsletter, investment bank Jefferies noted that electrical monitoring company Whisker Labs did not find evidence of a major transmission line fault before the Eaton Fire erupted. The blaze burned more than 14,000 acres, causing damage to thousands of structures and at least 17 fatalities, according to officials.
However, Whisker Labs found there were energized distribution lines west of Eaton Canyon despite warnings about high winds prior to the fire’s start, the newsletter stated.
Whisker Labs cannot point to a specific source for any fault event, but “based off of multiple faults detected in the lead up to the fire’s reported start time, the team confirmed with certainty there were energized distribution lines west of the fire,” according to Jefferies.
SCE, one of the area’s largest utilities, told RTO Insider on Jan. 13 that no fire agency has suggested its facilities were involved in igniting the Eaton Fire.
Local utility Pasadena Water and Power also operates in the region.
Still, if SCE’s equipment is found to be at fault down the line, the utility’s credit rating could take a hit, Moody’s Ratings cautioned in a report Jan. 16, per Reuters. The report also said the company could see financial damage if the California Wildfire Fund runs out of money. Utilities pay into the fund to receive reimbursements for some wildfire claims.
Additionally, legal challenges are already starting to trickle in. Some affected by the Eaton Fire filed lawsuits against SCE last week, alleging the blaze began under one of the company’s transmission towers. SCE has also received preservation notices from counsel representing insurance companies.
Another issue is whether SCE took adequate measures to mitigate risks under its California Public Utilities Commission-approved Wildfire Mitigation Plan, Jefferies contended.
“To date, we have not seen evidence supporting ‘serious doubt’ of prudency, but we will be closely looking to see whether EIX followed its preemptive safety power shutoffs to the letter,” Jefferies stated.
Fire agencies are investigating whether SCE equipment was involved in the smaller Hurst Fire, the utility announced Jan. 12.
SCE said the Hurst Fire was reported at approximately 10:10 p.m. and that a 220-kV circuit experienced a relay at 10:11 p.m. A downed power line was discovered at a tower associated with the circuit, and “SCE does not know whether the damage observed occurred before or after the start of the fire,” the utility added.
