The CEO of Edison International recently admitted to investors that faulty company equipment was responsible for last year’s deadly Woolsey Fire. This admission comes after fire investigators for Ventura and Los Angeles Counties came to the same conclusions.

This admission comes as California struggles with more deadly wildfires in Los Angeles and Sonoma Counties.

The Woolsey Fire

The 2018 wildfire season was the most destructive in California’s 170-year history, with over 8500 fires destroying nearly 1.9 million acres. Costs to contain the fires came to $432 million, while insurance claims have come to $12 billion (as of May 2019). While much of the conflagrations were due to a record number of dead trees in the state and the effects of climate change, poorly-maintained and defective electrical equipment has been implicated in a number of the fires.

The Woolsey Fire broke out in the afternoon of Nov. 8, 2018, at an Edison substation near an industrial research lab south of Simi Valley. Reports indicate that a loose wire had come into contact with one of the company’s power lines.

What began as a brush fire was fanned by hot, dry Santa Ana winds and an unusual abundance of fuel. By the following day, it had crossed Highway 101 and spread into the town of Agoura Hills. High winds prevented aerial efforts to contain the blaze has the fire went on to engulf over 70,000 acres, forcing nearly 300,000 residents to flee.

By the time the fire was contained nearly two weeks later, approximately 400 homes had been destroyed, along with two rehabilitation centers and three summer camps. At least three people are known to have died as a result of the fire.

Consequences for SoCal Edison?

The assignment of liability to Edison for the Woolsey Fire came as little surprise to investors, as the company had stated earlier this year that it might be found responsible for the fire. Following CEO Pedro Pizzaro’s announcement on October 29th, the company’s stock dropped by nearly 20 percent.

In December 2017, California fire officials released their report on an investigation that found the Thomas Fire, which also affected Ventura County, was caused by two Edison power lines coming into contact, producing sparks that fell on nearby vegetation.

Wildfires in 2017 and 2018 in which Pacific Gas & Electric was found responsible drove the company into a Chapter 11 bankruptcy proceeding after its liabilities hit the $30 billion mark. In response, the California State Assembly passed legislation to protect utility companies by setting up a special insurance fund to cover future claims. According to Pizzaro, his company has paid $2.4 billion into the fund thus far.

Presently, that fund is all that prevents Edison shares from being downgraded into junk status. SoCal Edison also faces possible felony charges for its alleged role in starting the Thomas Fire of 2017-18, which affected the same area, causing two deaths and destroying over 1,000 buildings. California’s attorney general, Xavier Becerra, is currently investing Edison’s role in both the Woolsey and Thomas fires.

This article is not legal advice. It is presented
for informational purposes only.