An investigation into the Saddleridge wildfire, which has burnt through nearly 8,000 acres in Los Angeles County this week, has established that the blaze originated near the base of a Southern California Edison electrical tower, according to reports from Reuters.
The cause of the fire still remains uncertain, but the Los Angeles Fire Department confirmed that the fire started near a high-voltage transmission tower owned by the unit of utility company Edison International.
An Edison spokeswoman also told Reuters that its “system was impacted near the reported time of the fire” on October 10, when the fire broke out.
The Saddleridge wildfire triggered the evacuation of 100,000 people after threatening more than 17,000 homes, although only 75 homes and other structures have been damaged or destroyed at present count.
A report into the incident does not state whether the Edison tower is suspected of causing the fire, but it would not be the first time an energy supplier has been linked to a wildfire outbreak in California.
For example, Edison’s power lines were previously identified as the ignition source for a much larger fire in December 2017 that destroyed more than 1,000 structures in Ventura and Santa Barbara counties.
Similarly, PG&E has been found liable for a series of wildfires in 2017, as well as the Camp Fire in 2018, for which it recently confirmed an $11 billion agreement to resolve all insurance subrogation claims.
Were Edison to be found liable in the Saddleridge case, it is likely that the resultant losses could trigger the company’s property liability tower of coverage.
Southern California Edison stated in its 2018 annual report that it had obtained $750 million of wildfire-specific insurance coverage for the period ending June 30, 2020, subject to a self-insured retention of $10 million per occurrence and up to $115 million of co-insurance.
The company added that its cost of obtaining wildfire coverage “increased significantly” this year, partly due to the numerous severe wildfire events in California over the previous two years.
This resulted in an anticipated $321 million spend on wildfire insurance in 2019, Southern California Edison said, representing a 35% increase on its $237 million costs for the previous year.
This figure could potentially have risen if the company purchased any additional wildfire coverage since the annual report was released.
As of December 31, 2018, Southern California Edison had a regulatory asset of $128 million related to wildfire insurance costs, and it believes that such amounts are probable of recovery.
