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- Southern California Edison is offering Eaton fire victims hundreds of thousands of dollars despite not accepting responsibility for the devastating blaze.
- Homeowners who lost 1,500-square-foot properties could receive $900,000 to rebuild, $200,000 for settling directly with the utility company and an additional amount for pain and suffering.
- The January wildfire destroyed more than 9,400 homes and structures in Altadena and killed at least 19 people.
Southern California Edison hasn’t accepted responsibility for igniting the Eaton fire, but it is now offering each victim who lost their home hundreds of thousands of dollars, according to a draft of its planned compensation program.
The owner of a 1,500-square-foot home destroyed in the wildfire, given as an example in the company’s draft, would receive $900,000 to rebuild. In addition, the utility is offering that owner an additional $200,000 for agreeing to settle their claim directly with Edison.
The family of each destroyed home also would get compensation for pain and suffering — $100,000 for each adult and $50,000 for each child, according to the draft.
Edison announced in late July that it was creating a program to directly compensate Eaton fire victims to help avoid lengthy litigation. The Jan. 7 fire destroyed more than 9,400 homes and other structures in Altadena and killed at least 19 people.
Pedro Pizarro, chief executive of Edison International, the utility’s parent company, said in a news release Wednesday that the compensation program for victims was “designed to help them focus on their recovery.”
The company said that it would hold four community meetings to get public comments on the proposed compensation plan, the first scheduled for Thursday at 7 p.m.
“While the investigation continues, inviting input on draft details is the next step in helping the community rebuild faster and stronger,” Pizarro said.
Regulators wanted Southern California Edison and other utilities to remove abandoned power lines — such as the one suspected of igniting the Eaton fire — but backed down amid utility opposition.
Edison said it had hired consultants Kenneth Feinberg and Camille Biros, who both worked on the September 11th Victim Compensation Fund, to help create the program.
“The proposed fund is designed as an alternative to conventional litigation in the courtroom,” Biros said. “The terms and conditions are completely transparent and voluntary. No claimants or their lawyers are required to participate until and unless they are satisfied with the compensation offer.”
Private lawyers representing Eaton fire victims have urged caution. They say similar programs created by utilities to compensate victims of other wildfires resulted in lower payouts than families received through lawsuit settlements.
Richard Bridgford, a lawyer who represents some of the victims, said he believed Edison was offering the compensation program before the investigation into the fire’s cause was complete to “try to come between clients and their attorneys.”
“It’s a ploy,” Bridgford said. “They want to pay less money to victims.”
In court, Edison already faces dozens of lawsuits filed by Eaton fire victims. Settling those lawsuits is expected to take years. Attorneys bringing the cases on behalf of victims would get 30% or more of the eventual settlement amounts.
Edison’s draft protocol lists proposed payments for people who were injured, renters who lost their belongings and businesses that lost property or revenue when they were forced to close.
Also eligible for payments are the owners of homes within the fire perimeter that were damaged by smoke or ash.
The payments would be reduced by amounts that victims had recovered through insurance settlements, according to the draft.
Among the payments to the families of those who died would be $1.5 million for pain and suffering and other noneconomic damages, according to the draft. Each surviving spouse and other dependent would receive an additional $500,000.
In addition, the family who lost a loved one would receive a direct claim premium — a bonus for settling directly with Edison — of $5 million, according to the plan.
Edison said the direct claim premiums — which include $200,000 for families who lost their homes, $10,000 to those whose homes were damaged as well as other amounts for other victims — were only available through its program and would not be offered in litigation.
Edison said in the draft that it calculated the proposed payments using historical data and its experience in prior wildfire settlements.
To determine the payment for property losses, Edison said it had hired economists at Compass Lexecon, a consulting firm. The utility said it had also hired RAND, the nonprofit research group in Santa Monica, to review the proposed property-loss settlements.
The utility said victims don’t need an attorney to apply for the compensation. But it is also offering to add 10% to the damage amounts, excluding the direct claim premiums, to cover legal fees of those who have a lawyer.
Victims will get their compensation offers within nine months of applying, Edison said. The company said it also was offering victims a “fast pay” option in which they could receive their financial settlement offer within 90 days.
“Speed in processing claims is essential,” Feinberg said.
Edison has said that the government’s investigation into the fire could take as long as 18 months. Pizarro said in April that a leading theory was that a century-old transmission line that had not been in service since the 1970s somehow became reenergized and sparked the fire.
If Edison’s equipment is found to have caused the blaze, the company would be reimbursed for most or all of the cost of amounts it pays to victims by a $21-billion state fund.
Edison’s direct compensation plan could alleviate the pressure on the fund, which state officials say could be at risk because of the scale of the Eaton fire claims.
The fund was created by lawmakers in 2019 to shield utilities from bankruptcy if their equipment ignites a catastrophic fire. Electricity customers of Edison and the state’s two other big for-profit utilities contributed half of the $21-billion state fund. The three utilities’ shareholders contributed the rest.
Edison has told its investors that it won’t have to reimburse the state fund for claims paid to victims unless outside parties can raise “serious doubt” that it had acted prudently in maintaining its equipment. However, even if that happened, the company said, the law would cap its liability at $3.9 billion.
The public must register to attend the meetings at sce.com/directclaimsupdates. The final meeting is at 7 p.m. Sept. 29.
Meanwhile, Edison continues to hike its electricity rates. On Thursday, the California Public Utilities Commission voted 4 to 0 to allow the company to increase its rates by 9.1% next month. The average customer will see an increase of more than $15 to their monthly bill, the commission said. Edison requested the increase, saying it was needed to safely maintain its system. Additional proposed hikes are now pending commission approval.
Edison’s actions to prevent wildfires are under scrutiny after the devastating Eaton wildfire that killed 17 people and destroyed 10,000 homes and other structures
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