California Fires Rout Almost 1 Million People, Kill 5 (Update7)

Oct. 24 (Bloomberg) -- Weakening winds aided Southern California firefighters as they battled blazes that may top $1 billion in damages and forced almost 1 million people from their homes, the biggest evacuation in California's history.

Hot, dry winds that have fanned flames in the past three days are easing and humidity increased as of 5:49 p.m. local time today, according to the National Weather Service. While winds may fall and humidity rises until Friday, winds may still shift unexpectedly near the coast, the Weather Service said.

``Fire crews need to stay alert to possible wind reversals and erratic conditions,'' the Weather Service said.

Many planes carrying flame retardant were grounded by the winds, which sometimes reached hurricane strength.

Californian officials reduced the number of homes threatened to 25,925 today from 68,500 yesterday, as fires in some areas such as the San Fernando Valley north of Los Angeles are under better control.

In hills and canyons from Santa Barbara to San Diego, about 8,000 firefighters struggled against more than a dozen wildfires that had scorched at least 645 square miles (1,670 square kilometers), an area twice the size of New York City, in the past four days. Five people had died and 2,327 structures had been destroyed or damaged as of earlier today.

``It's not just the number of homes lost, it's the response costs, the economic factors,'' Henry Renteria, director of California's Office of Emergency Services, said in Sacramento. ``We are starting to get some reports of some agriculture damage, and that's going to be huge to that industry.''

Bush Declaration

President George W. Bush declared a ``major disaster'' in the region today, offering federal aid to residents who have lost homes.

``I want the people of Southern California to know that Americans all across this land care deeply about them,'' said Bush, who will visit the state tomorrow. ``They can rest assured that the federal government will do everything we can to help put out these fires.''

The U.S. Federal Emergency Management Agency is aiming to add 1,900 firefighters by tonight, spokesman Aaron Walker said.

San Diego was ``seconds'' away from a massive power outage, said Rachel Laing, a spokeswoman with San Diego Gas & Electric. California electricity officials put a Southwest Power Link back in service this afternoon, about the time that three high-voltage lines connecting San Diego to the north were knocked out of service.

Arson Possible

The causes of the fires haven't been determined, and arson is a possibility, said Jay Alan, a spokesman for the state's emergency response office.

The four major fires that have burned the most homes are far from being controlled, according to the state's Web site. In San Diego County, there is only 10 percent containment at the Harris Fire, which has burned 73,000 acres and 200 homes, and the Witch Fire that burned 196,420 acres and 645 homes. The Rice fire, which burned 7,500 acres and destroyed 206 homes, is 15 percent contained.

A fire called Slide in the mountainous community of Green Valley north of Los Angeles burned 300 homes and has zero containment, the state said.

``The entire community of Green Valley was surrounded by the fire and evacuated,'' according to the state's Web site.

Largest Evacuation

Since the latest wildfires broke out Oct. 21, about 321,000 residents have been ordered to leave their homes, and an additional 500,000 people have left voluntarily, making it the largest evacuation in California's history, the governor's office and state emergency-services officials said.

About 2,576 homes have been destroyed or damaged according to a state emergency Web site. About 184 businesses were destroyed or damaged, while 2,055 are threatened, the Web site said.

Damage in San Diego County alone has reached $1 billion, local emergency officials said, the Associated Press reported.

The most expensive wildfire in U.S. history occurred in the hills above Oakland and Berkeley, California, in 1991, according to Insurance Information Institute data. That fire caused $1.7 billion in insured losses, or $2.52 billion in today's dollars.

Insurance Impact

Allstate Corp., the largest publicly traded U.S. home insurer, may post fourth-quarter profit 8.6 percent below analysts' estimates because of the California wildfires, according to Lehman Brothers Holdings Inc. analyst Jay Gelb. The wildfires will cut income for the insurer about 15 cents a share if industry losses reach $1 billion, Gelb said in a note to investors today.

Companies with business in the area such as Pfizer Inc., the world's biggest drugmaker, closed their San Diego operations during the fires. Pfizer shut its 33.5 acre research center in La Jolla, saying an estimated half of its 1,000 scientists and workers live in areas affected by the fires.

There are 22,000 people in shelters across the region, thousands of them in San Diego's Qualcomm Stadium. About 2,000 people today are at an evacuation center at the Del Mar Fairgrounds.

Ted Morrow of Rancho Bernardo constantly checked lists of destroyed homes printed in the San Diego Union-Tribune.

``This is just a few blocks away from me,'' Morrow said as he ran his finger across a group of addresses. ``The hardest part has been not knowing whether you have anything to go back to.''

To contact the reporters on this story: Peter J. Brennan in Los Angeles at pbrennan3@bloomberg.net; Demian McLean in Washington at dmclean8@bloomberg.net.

To contact the editors responsible for this story: JoAnne Norton at jnorton@bloomberg.net; Peter Torday at ptorday@bloomberg.net.