The cost of the Eaton fire, which burned near Los Angeles in January, could be passed on to Californians. The fire burned more than 14,000 acres, killing 18 people and destroying more than 9,000 structures.
Eaton fire cause
Numerous lawsuits blame the Eaton fire on equipment from utility company Southern California Edison (SCE), which services approximately 15 million people. Early estimates on the cost of the Eaton fire, along with the Palisades fire, are between $35 billion and $45 billion, according to property analytics firm CoreLogic.
If the figures hold, that could wipe out California’s $21 billion wildfire insurance fund. The nest egg was established in 2019 to help compensate victims and shield utilities like SCE from financial collapse.
If the fund is depleted, officials could extend a monthly utility bill surcharge beyond its scheduled expiration in 2035. Known as a non-bypassable charge, the insurance fund surcharge currently adds about $3 to the average residential bill.
An LA Times report shows extending that fee by an additional 10 years could put customers on the hook for an additional $9 billion towards the fund.
As of now, the cause of the Eaton fire officially remains under investigation, and a final report could take more than a year. In April, lawyers blamed a decommissioned transmission tower for sparking the fire. A month later, SCE removed two towers for examination.
SCE’s parent company, Edison International, does have access to a billion-dollar self-insurance fund and does plan to use the wildfire fund if necessary. SCE generated $1.69 billion in revenue last year.
Preventing wildfires
In May, SCE released a wildfire mitigation plan, outlining how it plans to prevent future fires. The company expects a cost of $6.2 billion over three years to install hundreds of miles of covered conductor, additional support for aerial firefighting and more.
In recent months, SCE has said the company’s equipment may have been involved in starting the Eaton fire, and there has been no evidence to suggest another cause.
Wildfires burn LA
In January, the Palisades and Eaton fires began within days of each other. In total, 28 people died, more than 16,000 structures burned and over 37,000 acres were scorched.
Recovery efforts continue in Southern California after the fires displaced thousands of people.
