pedro pizarro

Southern California Edison increased the number of Eaton fire victims that are eligible to file claims for damages in its final compensation proposal, though some Altadena residents say the utility’s program still falls short.

After talking to residents about the plan it released in July, Edison said it decided to expand the area of homes that are eligible for compensation for smoke damage.

“Expanding the eligibility area is one of the most significant updates made as a result of feedback,” said Pedro Pizarro, the chief executive of Edison International, the utility’s parent company. “The number of qualified properties nearly doubled for those with damage from smoke, soot or ash.”

The utility also increased the amount of compensation it is offering for some victims. For example, each child in a family that lost its home will be eligible to receive $75,000 for pain and suffering, up from $50,000 in the initial plan.

To receive payments under the utility’s Wildfire Recovery Compensation Program, families must agree to drop any lawsuits they filed against the utility for the Jan. 7 fire.

The program also is open to businesses that lost revenues and renters who lost property. And it covers those who suffered physical injuries or had family members who died.

Edison is launching the victim compensation program even though government fire investigators have not released their report on the cause of the fire. The inferno swept through Altadena, destroying 9,400 homes and other structures and killing 19 people.

Videos captured the fire igniting under a century-old transmission line in Eaton Canyon that Edison had not used since 1971, and Pizarro has said a leading theory is that the line somehow re-energized and ignited the blaze. Edison said in a federal securities filing this week that “absent additional evidence, SCE believes that it is likely that its equipment could be found to have been associated with the ignition.”

In documents detailing its final compensation plan, the utility included the example of a family of four with a 1,500-square-foot home that was destroyed. The family would receive $900,000 to rebuild, $360,000 for personal property, $140,000 for loss of use and $380,000 for pain and suffering. It also would receive a $200,000 “direct claim premium” for agreeing to settle outside of court.

That total of $1,980,000 is then reduced by the family’s $1 million of insurance coverage, according to the company’s example.

On Thursday, state Sen. Sasha Renée Pérez (D-Pasadena) sent a letter to Edison saying she was concerned about how the utility was requiring victims to waive their future legal rights in order to get compensation. And she called on Edison to provide immediate housing assistance to fire victims.

“Having acknowledged its potential role in starting the Eaton Fire, Edison must do everything within its power to prioritize the needs of survivors and make this commitment a core part of its corporate duty,” she wrote to Pizarro. “This means ensuring fire victims can recover and rebuild their lives with the support they are owed.”

Edison expects to be reimbursed for most or all of the payments it makes to victims by a $21-billion state wildfire fund that Gov. Gavin Newsom and lawmakers created in 2019 to shield utilities from bankruptcy. Administrators of the wildfire fund told members of the state Catastrophe Response Council this week that they expect Eaton fire claims “to be in the tens of billions of dollars.”

In September, Newsom signed a bill that will bolster the money available by another $18 billion for future wildfires. Under that bill, Edison is allowed to raise electric rates for any Eaton fire costs that exceed the original $21-billion fund.

Some Eaton fire survivors told the council, which oversees the wildfire fund, that Edison’s program fails to fully cover damages suffered by victims. Joy Chen, executive director of the Eaton Fire Survivors Network, recently sent the council a report detailing where her group found shortfalls. For example, Chen said, Edison is deducting a homeowner’s full insurance coverage from the compensation amounts even if the insurer has reimbursed the family for only part of that amount.

“Nine months after Edison’s negligence shattered our lives, the toll is clear,” the group’s report states. “Many have drained retirement savings, maxed out credit cards, or watched marriages and health deteriorate under the strain. “

“You destroyed our homes, lives and community,” the report says of Edison. “Fix what you broke. “

Chen’s group joined with Perez in calling for Edison to provide emergency housing assistance for victims.

Edison said its program is designed “to help the community recover and rebuild faster.” The utility said a report by RAND, the non-profit research group it hired to assess the compensation plan, determined the payment amounts “used modern statistical methods and in our judgment were thoughtfully done and well executed.”

Edison said victims can start filing for claims now and that it expects to get back to them with an offer within 90 days.

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 would also 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 press 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.

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,” said Biros. “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.

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 revenues when they were forced to close.

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 home, $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.

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 was also offering victims a “fast pay” option where 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 the cost of amounts it pays to victims by a $21 billion state fund. The fund was created by lawmakers in 2019 to shield utilities from bankruptcy if their equipment ignites a catastrophic fire.

The public must register to attend the meetings at ce.com/directclaimsupdates. The final meeting is at 7 p.m. on Monday.

Gov. Gavin Newsom is preparing draft legislation that would add an additional $18 billion to a state fund for wildfire victims that officials have warned could be exhausted by January’s deadly Eaton wildfire.

Under Newsom’s plan, customers of the state’s three biggest for-profit utilities would pay another $9 billion to supplement a state fund created in 2019 that holds $21 billion.

The other $9 billion would come from shareholders of Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric, according to a draft of the proposal.

“We continue to work with the Legislature on policy that will stabilize California’s Wildfire Fund to support the recovery of wildfire survivors and to protect California utility consumers — even as wildfires become bigger and more destructive due to climate change,” Newsom’s office said in a statement Thursday.

Customers of the three utilities are already on the hook for contributing half of the original $21 billion fund through a surcharge of about $3 on their monthly bill. The proposal would have customers pay $9 billion more by extending that surcharge by 10 years beyond 2035, when it was set to expire.

“We’re very disappointed to be at a point where there is even talk of more ratepayer money going to the wildfire fund,” said Mark Toney, executive director of the the Utility Reform Network, a consumer advocacy group.

Utility executives also criticized the plan, which was reported earlier by Bloomberg, for proposing that their shareholders pay additional amounts into the fund.

Pedro Pizarro, chief executive of Edison International, told Wall Street analysts on a conference call that the company has told Newsom and lawmakers that any legislation to shore up the fund “would not have a shareholder contribution.”

“We will need to see the balance of an ultimate package,” Pizarro said.

Newsom’s plan has been circulating with legislative leaders and others and would require approval of the state Senate and Assembly. Under the draft proposal, the $18 billion would go into a new “Continuation Wildfire Fund.” The new fund would not be created until the administrator of the state’s original wildfire fund determines additional funds are needed.

Newsom and lawmakers created the $21 billion fund in 2019 to protect utilities from bankruptcy in the event their equipment sparks a devastating fire.

Toney said said state officials told him then that there was a 99% chance the fund would last 20 years. Now it could be wiped out by a single fire.

He said he believes there needs to be limits on the liabilities that the fund will pay for. “We can’t go back every three or four years and put more money in,” he said.

Since the fund was created, electric customers have also paid $27 billion for tree trimming and other work aimed to prevent wildfires, which is fast driving up electric bills, Toney said.

Despite that spending, fires sparked by Edison’s equipment leaped from 90 in 2023 to 178 in 2024.

The investigation into the Eaton fire, which killed 19 people and destroyed thousands of homes and businesses in Altadena, is continuing. Video captured the fire igniting on Jan. 7 under an Edison transmission tower.

Pizarro has said a leading theory is that a dormant Edison transmission line, not used since 1971, somehow became electrified and sparked the blaze.

The insured property losses alone could be as much as $15.2 billion, according to an estimate released by state officials last week. That amount does not include uninsured losses or damages beyond those to property, such as wrongful death claims. A study by UCLA estimated losses at $24 billion to $45 billion.

Seeking to avoid lengthy litigation, Southern California Edison said Wednesday it will offer to compensate Eaton fire victims directly for damages suffered, even though it has yet to formally concede that its equipment ignited the blaze on Jan. 7.

Edison said it planned to launch a Wildfire Recovery Compensation Program this fall that would be open to those who lost homes, businesses or rental properties in the fire that killed 19 people and destroyed more than 9,400 homes and other structures in Altadena. It would also cover those who were harmed by smoke, suffered physical injuries or had family members who died.

“Even though the details of how the Eaton Fire started are still being evaluated, SCE will offer an expedited process to pay and resolve claims fairly and promptly,” Pedro Pizarro, chief executive of Edison International, the utility’s parent company, said in a press release. “This allows the community to focus more on recovery instead of lengthy, expensive litigation.”

The utility said it had hired consultants Kenneth R. Feinberg and Camille S. Biros, who had worked on the September 11th Victim Compensation Fund, to help design the program.

Dozens of lawsuits have been filed against Edison in the wake of the Jan. 7 fire that videos captured igniting under a transmission line in Eaton Canyon. The cause is still under investigation, but Pizarro has said a leading theory is that an idle Edison transmission line, last used in 1971, somehow became re-energized and started the blaze.

An attorney who represents fire victims expressed skepticism of the plan, saying it could lead to reduced compensation for fire victims.

“In the past, the utilities have proposed these programs as a means for shorting and underpaying victims,” said attorney Richard Bridgford said. “Victims have uniformly done better when represented by counsel.”

Edison said the program would be designed to quickly compensate victims, including those who were insured. People can apply with or without an attorney, it said. The program is expected to run through 2026.

“The architecture and timing of the SCE direct claims program will be instrumental in efficiently managing funding resources, mitigating interest costs and minimizing inflationary pressures so funds can address actual claims and fairly compensate community members for their losses,” Pizarro said.

If Edison is found responsible for the fire, the state’s $21 billion wildfire fund is expected to reimburse the company for all or most of the payments it makes to victims. Brigford said he believed the wildfire fund would be enough to cover the Eaton fire claims.

“They are trying to make people panic so they don’t get adequate representation,” he said.

Others are concerned that the state wildfire fund is inadequate. Officials at the Earthquake Authority, which administers the wildfire fund, said in documents released in advance of a Thursday meeting that they fear the costs of the Eaton fire could exhaust the fund.

State officials plan to discuss what can be done to lengthen the life of the fund at the meeting.

Edison said more information on eligibility and other details of the compensation plan would be released in the coming weeks.

Edison International officers and directors misled the company’s investors about the effectiveness of its efforts to reduce the risk of wildfire in the months and years before the devastating Eaton fire, a shareholder lawsuit claims.

The lawsuit, filed last week in U.S. District Court in Los Angeles, points to repeated statements that the utility made in federal regulatory reports that said it had reduced the risk of a catastrophic wildfire by more than 85% since 2018 by increasing equipment inspections, tree trimming and other work aimed at stopping fires.

The complaint also raises doubts about news releases and other statements that Edison made soon after the start of Eaton fire, which killed 18 people and destroyed thousands of homes and businesses in Altadena.

“We take all legal matters seriously,” said Jeff Monford, a spokesman for Edison. “We will review this lawsuit and respond through the appropriate legal channels.”

The lawsuit claims that Edison’s early statements on the Eaton fire — in which it detailed why it believed its equipment was not involved in the fire’s start — were wrong.

“Edison obfuscated the truth by making false and misleading statements concerning its role in the fire,” the lawsuit claims.

More recently, Pedro Pizarro, the chief executive of Edison International, said the leading theory for the fire’s start was the reenergization of an unused, decades-old transmission line in Eaton Canyon.

The investigation by state and local fire investigators into the official cause of the deadly fire is continuing.

The lawsuit was filed as a derivative action in which shareholders sue a company’s officers and directors on behalf of the company, claiming they had breached their fiduciary duties. It seeks financial damages from Pizarro, Chief Financial Officer Maria Rigatti and members of the company’s board of directors. Money recovered would go to the company.

It also directs Edison “to take all necessary actions” to reform its corporate governance procedures, comply with all laws and protect the company and its investors “from a recurrence of the damaging events.”

The lawsuit was brought by Charlotte Bark, a shareholder of Edison International, the parent company of Southern California Edison.

“Prior to the outbreak of the Eaton Fire, the Company had a long history of not prioritizing the safety of those who lived in the areas it serviced, and paying fines as a result,” the lawsuit states. Since 2000, it says, Edison has paid financial penalties of $1.3 billion for violating utility safety regulations.

The complaint points to an October regulatory report that was the focus of a Times report. In the article, state regulators criticized some of Edison’s wildfire mitigation efforts, including for falling behind in inspecting transmission lines in areas at high risk of fires.

The lawsuit lists the major destructive wildfires that investigators said were sparked by Edison’s equipment in recent years, including the Bobcat and Silverado fires in 2020, as well as the Coastal and Fairview fires in 2022.

“The recurring wildfire incidents connected to the Company display that the Board has repeatedly failed to mitigate a risk that materially threatens Edison,” the complaint states.

The lawsuit accuses Pizarro, Rigatti and the company’s board of directors of “gross mismanagement” and claims that the defendants “unjustly enriched” themselves.

“Because the Individual Defendants failed to carry out their respective duties, the compensation they received was excessive and undeserved,” the suit states.

It asks the court for an order that would require the officers and directors to pay restitution, including returning the compensation they received that was tied to how well the company performed.