A group representing thousands of Eaton fire victims is asking Gov. Gavin Newsom to block state approval needed for Southern California Edison to collect higher profits until the utility agrees to immediately pay $200,000 to each household displaced by the monstrous blaze.
The 8,500-member Eaton Fire Survivors Network said victims are teetering on homelessness and that SCE could recoup the money from a $21 billion state fund for three privately owned utilities that ignite wildfires.
In a Nov. 12 letter, Joy Chen, executive director of the survivors network, asked the governor to urge the state Public Utilities Commission to delay raising SCE’s guaranteed profit margin from 10.33% to 11.75% until the utility takes care of displaced fire victims.
Chen added that the housing relief should come with no strings attached, meaning desperate survivors should not have to forfeit their right to sue to receive the money.
“More than 80% of us remain displaced, living in temporary rentals, trailers or cars. Most will lose housing (insurance) coverage within months. Credit cards are maxed out, savings are gone, and GoFundMe campaigns have been spent,” she wrote. “Parents are skipping meals to pay rent. Seniors are sleeping in cars near the neighborhoods that once were their homes.”
Chen wrote that SCE could use its credit resources to front the money and then seek reimbursement from the $21 billion state Wildfire Fund, created in 2019 to keep privately owned utilities from going bankrupt if found liable for a wildfire. SCE, if found to be the cause of the Eaton fire, likely would go to the fund for any damages above $1 billion, creating concerns that the blaze would deplete the entire account. State legislators are considering ways to bolster the fund.
Meanwhile, Chen noted that SCE is financially healthy. She noted that parent company Edison International had a third-quarter net income of $832 million compared to a net income of $516 million in the same quarter last year. Edison CEO Pedro Pizarro, in a recent earnings call, reported the company has made “significant progress derisking” the utility’s financial outlook.
Edison’s fiscal performance was bolstered by the PUC’s approval of SCE’s request for rate increases, which Pizarro said are essential for the company’s investments in the power grid and its safety.
“It would be unreasonable to grant any further profit increase while the families displaced by Edison’s fire remain without stable housing,” Chen wrote to Newsom. She contended there is precedent for the survivors network request because Pacific Gas and Electric provided emergency relief to survivors of the 2015 Butte Fire while litigation was pending.
The official cause of the Eaton fire, which damaged or destroyed more than 9,000 structures and killed 19 people in January, is still under state investigation. But Pizarro has acknowledged there is evidence the blaze was caused by a power line dormant for more than 50 years that became reenergized during the fierce windstorm.
More than 100 lawsuits have been filed blaming SCE for the fire. As an alternative to litigation, SCE has launched its own compensation program for victims who agree not to sue.
Edison has declined the request to immediately pay housing relief, in favor of concentrating on its own compensation program. The utility also urged the PUC to grant its profit request.
“Southern California Edison’s cost-of-capital request supports the financing necessary for a reliable and resilient grid. We remain committed to the community we have served for nearly 140 years,” spokesperson David Eisenhauer said.
Under the “fast pay” component of SCE’s compensation plan, owner/occupants of a destroyed 1,500-square-foot house would receive $900,000 in rebuilding money, plus $200,000 for going through the program. Another $115,000 per adult would be paid for noneconomic damages, while children would receive $75,000.
Each death would bring $1.5 million for pain and suffering, plus $500,000 for each surviving spouse and eligible dependent. Another $5 million would be paid as a premium for going directly through the Edison plan. SCE officials say victims submitting claims would receive an offer in 90 days and payment 30 days after that — much quicker than litigation.
However, attorneys in the lawsuits allege the SCE program would pay survivors less than they could receive through litigation, which is scheduled for trial in January 2027.
Newsom’s office did not respond to an email requesting comment on the survivors network letter.