'Effectively a bailout': New law benefits Edison

[Edison, from At] Assn. “It is unfortunately what happens when major policies are done in the final hours of the Legislature with little transparency.”

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A BILL Gov. Gavin Newsom signed allows Edison to start charging customers for Eaton fire costs that exceed the state's wildfire fund. ROBERT GAUTHIER Los Angeles Times

(ROBERT GAUTHIER Los Angeles Times)

Damages for the Eaton fire have been estimated to be as high as $45 billion — which could greatly exceed the $21-billion fund.

Sheri Scott, an actuary at Milliman, told state officials in July that insured losses alone range from $13.7 billion to $22.8 billion. That estimate doesn’t include payments to families who were uninsured or underinsured, or compensation for pain and suffering.

The bill allows Edison to issue bonds secured by new payments from its electric customers for Eaton fire costs that can’t be covered by the $21-billion fund.

Kathleen Dunleavy, an Edison spokeswoman, said the company supported the bill’s language because the bonds secured by customer payments provide a lower cost of borrowing than if the company used traditional financing.

“Every dollar counts for our customers,” Dunleavy said.

“There are a lot of variables here,” Dunleavy added. “The investigation is ongoing and there is not an estimate of the total cost of the Eaton fire.”

Newsom's office noted that under the amendments the utilities won't get to earn a profit on $6 billion of wildfire prevention expenditures. Customers will still have to pay for the costs, but they won’t be charged extra for shareholders’ profit.

Since early this year, Edison, Pacific Gas & Electric and San Diego Gas & Electric had been lobbying Newsom and state legislative leaders, urging them to bolster the $21-billion fund because of concerns it could be exhausted by the Eaton fire's extraordinary cost.