Utilities on the Hook for Fire Damage

LOS ANGELES (CNS) - In a sweeping effort to reduce the wildfire risk from electric power lines, Southern California Edison says it wants to spend $582 million for a series of improvements to its grid, which likely would mean higher bills for ratepayers, it was reported today.

The utility giant's actions underscore power companies' growing concerns over their fire liability, the Los Angeles Times reported. In the last few years, the state has experienced its largest and most destructive blazes on record.

Another huge California utility, Pacific Gas & Electric, faces up to $15 billion in losses from last year's wine country fires, which destroyed more than 8,000 homes and killed more than 40 people. Residents have blamed downed power lines for the fires, though officials have not completed their investigation of the causes.

Many of California's most destructive fires have been fueled by powerful winds, which in some cases have caused power lines to snap off and spark blazes. Utility companies are on the hook for hundreds of millions of dollars in losses, and officials have warned that the losses will grow if the agencies can't find ways to reduce the risks.

Edison is asking the state for permission to spend $582 million on improvements, including strengthening poles and using better technology to determine when winds put the power grid at risk, according to The Times. Over the next two years, an estimated 600 miles of exposed power lines would be replaced with insulated ones that would not spark if they came in contact with a fallen branch or a Mylar balloon.

Officials told The Times that ratepayers would see their bills increase between 81 cents and $1.20 a month, but far less than if Edison is found liable for a catastrophic fire like those that hit Sonoma, Napa, Lake and Mendocino counties last October. Edison is estimated to face up to $4 billion in losses from the Thomas fire, which hit Ventura and Santa Barbara counties in December, and the Montecito mudslide that occurred a month later.

PG&E's potential losses from the October blazes were so vast that the utility said it faced possible bankruptcy if it did not get some relief from the state. Those concerns prompted the state Legislature last month to approve a bill that would allow PG&E to borrow money for its 2017 wildfire costs while using funds collected from ratepayers to pay back the loan.

PG&E lobbied lawmakers heavily for help, warning that Wall Street investors could downgrade the company's credit rating without relief from the Legislature. The bill was controversial, with some calling it a bailout for a utility that should have been better prepared to deal with the wildfire danger, The Times reported.

Photos: Getty Images

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