A Decade of Destruction Leaves $6 Billion Trail of Legal Settlements
As Southern California battles yet more destructive blazes in what has become a year-round fire season, the region’s largest utility provider faces mounting scrutiny over its role in devastating wildfires that have scorched hundreds of thousands of acres across Los Angeles County and surrounding areas. With speculation growing about Southern California Edison’s involvement in the recent Eaton fire, a look back at the utility’s history reveals a troubling pattern of equipment failures, multibillion-dollar settlements, and repeated promises of reform.
Early Warning Signs: The 2007 Malibu Canyon Fire
The story begins in the autumn of 2007, when fierce Santa Ana winds whipped through Malibu Canyon. A single overloaded power pole snapped in the gusts, igniting a blaze that would destroy dozens of homes and char nearly 4,000 acres of the pristine Southern California coastline.
The incident would prove to be just the beginning of Southern California Edison’s wildfire woes, leading to a $37 million settlement with state regulators and establishing a pattern that would repeat itself with devastating consequences over the next decade and a half.
The Devastating Thomas Fire of 2017
A decade later, in December 2017, the Thomas Fire erupted in Ventura County, marking the beginning of SCE’s most devastating period of wildfire involvement. The blaze, which investigators later attributed to SCE’s power lines coming into contact with each other during high winds, devoured nearly 282,000 acres and claimed two lives, setting the stage for deadly mudslides that would follow.
The financial toll was staggering: in September 2020, SCE agreed to pay $1.16 billion to settle insurance claims related to both the fire and subsequent mudslides.
Woolsey Fire Compounds the Crisis
Before the ash could settle from the Thomas Fire, the Woolsey Fire ignited in November 2018, tearing through 96,000 acres of Los Angeles and Ventura Counties. The fire, which SCE later acknowledged was likely connected to its equipment, destroyed over 1,600 structures and claimed three lives. The financial aftermath was staggering: in January 2021, SCE agreed to pay $2.2 billion to settle insurance subrogation claims alone. This came on top of a $360 million settlement with local governments announced in November 2019, and settlements with approximately 1,000 individual plaintiffs. The Woolsey Fire settlements represent one of the largest utility-fire payouts in Los Angeles County history.
Mounting Financial Impact
The financial impact of these disasters has been enormous. In 2021, SCE estimated its potential exposure for the 2017 and 2018 wildfires at over $4.6 billion, excluding certain fines and penalties.
That same year, the utility reached a comprehensive settlement totaling $550 million in fines, penalties, and cost disallowances, including $110 million in direct penalties to California’s General Fund and $65 million for improved safety measures.
Recent Fires and Ongoing Settlements
The pattern continued into the new decade. In September 2020, the Bobcat Fire erupted in the Angeles National Forest northeast of Los Angeles, ultimately consuming nearly 116,000 acres and destroying or damaging more than 170 structures. While SCE did not admit wrongdoing, it agreed to pay over $80 million to settle claims from Los Angeles County alone.
Most recently, in February 2024, SCE agreed to pay an additional $80 million to settle claims by the U.S. Forest Service related to the Thomas Fire’s damage to Los Padres National Forest, demonstrating that the financial repercussions of these disasters continue to unfold years after the flames are extinguished.
Promises of Reform
In response to this devastating track record, SCE has promised substantial reforms. The utility’s 2020-2022 Wildfire Mitigation Plan committed approximately $3.8 billion to risk reduction measures, including:
- Replacing bare power lines with insulated ones
- Upgrading to fire-resistant poles
- Installing fast-acting fuses and remote-controlled sectionalizing devices to quickly isolate faults
New Concerns: The Eaton Fire Investigation
The pattern of SCE’s involvement in wildfire incidents may be continuing with the recent Eaton fire that erupted in Los Angeles County’s Altadena area. The blaze, which has already claimed five lives and burned nearly 14,000 acres, began near a large transmission tower and distribution pole around 6:15 p.m. on a day of extreme fire danger.
While the cause remains under investigation, grid monitoring data from Whisker Labs showed that power was still flowing through transmission lines in the area when the fire started, despite the extreme Santa Ana wind conditions. The National Weather Service had predicted winds between 80 and 100 mph could hit the Altadena area, particularly in the San Gabriel Mountains and foothills where Eaton Canyon is located.
SCE has acknowledged that the fire began in its service area and has already received evidence preservation notices from insurance companies. While the utility claims it had de-energized distribution lines west of Eaton Canyon before the fire, eyewitnesses reported seeing flames erupting near transmission infrastructure, and monitoring data showed homes in the area still had power when the fire began.
The Growing Cost of California’s Utility-Sparked Fires
The utility’s ongoing struggle to prevent fire ignitions highlights the challenges faced by power companies operating in California’s increasingly fire-prone environment. While SCE has remained financially resilient, generating hundreds of millions in net income most years and leveraging insurance and utility bonds to cover wildfire liabilities, the human and environmental costs of these fires continue to mount.
According to a recent report from California’s Legislative Analyst’s Office, wildfire-related costs now account for up to 13 percent of utility bills, a dramatic increase from just a few years ago when such costs were considered “negligible.” This rising financial burden reflects the growing magnitude of damages and risks from utility-sparked wildfires in recent years.
The Human Cost
For the communities of Southern California, particularly in Los Angeles County and its surrounding areas, the story of SCE’s wildfire involvement is not just about corporate liability and financial settlements. It’s about neighborhoods reduced to ash, lives lost, and an environment forever altered by flames.
As climate change threatens to make fire seasons longer and more severe, and with the Eaton fire investigation still ongoing, the pressure on SCE to prevent future ignitions has never been greater.