Rate Hike to Cover Damages from Southern California Fires

By Published On: December 14, 2003

Southern California?s investor-owned electric utilities are expected to file for a rate hike to recoup the cost of repairing thousands of downed power poles and lines caused by the wildfires that swept through almost a million acres late last month. In a third-quarter 10-Q form filed with the Securities and Exchange Commission November 10, Southern California Edison said that it sustained more than $50 million in damages from the fires, primarily in the San Bernardino Mountains, where some 1,500 power poles and 220 transformers were damaged. More than 240,000 people in Edison?s service area lost power at some point during the fires, which raged for almost two weeks. ?It?s not going to be covered through insurance,? said Marlon Walker, an Edison spokesperson. ?It?s likely going to be a filing.? In its 10-Q form, Edison said that it is tracking fire-caused damages under a ?catastrophic event memorandum account? it has initiated with the commission and expects to recover the associated costs ?in future rates with no impact on earnings.? To the south, San Diego Gas & Electric suffered more severe damages and still is tallying the costs, said company spokesperson David Johnson. The utility lost 3,000 power poles and 300 miles of lines. Seventeen high-voltage transmission lines sustained varying degrees of damage, and some transformers were damaged as well in the fires, which caused 108,000 people in the utility?s service area to lose power at some point. Johnson said he expects the company will total the damages within a week or two. Under California Public Utilities Commission rules, utilities have 30 days after a natural disaster to initiate a catastrophic event memorandum account. The Los Angeles Department of Water & Power sustained transmission line damage in San Bernardino County, according to Henry Martinez, assistant general manager for power. Overall, the department sustained some $17 million in damages. ?We are eligible for reimbursement,? said Martinez. Public power agencies that sustain damage in counties declared disaster areas by the president may seek public assistance through the Federal Emergency Management Agency, according to Sheryl Tankersley, a public assistance specialist with the agency who is handling fire damages in Southern California. The federal agency can cover up to 75 percent of the damages for public agencies, she said, and before leaving office, former governor Gray Davis committed the state to covering the other 25 percent of damages sustained by public agencies. Investor-owned utilities are not eligible to apply for FEMA assistance, Tankersley said.

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