California’s Wildfires Are a $9 Billion Threat to Power Companies
A fund meant to limit electricity providers’ financial risk may come up short.
A downed powerline during the aftermath of the Palisades fire in Los Angeles.
Photographer: Michael Nigro/Bloomberg
It is a measure of California’s range of natural dangers that the state’s Wildfire Fund is administered by the California Earthquake Authority. The cost of making a state prone to drought, flood, fire and tremors not merely viable but desirable, and who pays, have been controversial constants all the way back to Los Angeles’ so-called “water wars” a century ago. Today, as LA contends with fire, the question of liability is as potent as ever.
The stock market quickly digested the awful news and images from LA and promptly wiped 10%, or $3.1 billion, from the value of Edison International Inc., owner of Southern California Edison, the utility serving 15 million customers across a swath of territory including much of Los Angeles County. That was on Wednesday. By Friday, the wipeout had reached $4.8 billion. That same day, PG&E Corp., whose Northern California territory is nowhere near LA, dropped by 8%, or more than $4 billion.