(Reuters) – Southern California Edison (SCE) said it had received notices from insurance companies to preserve evidence related to the Eaton Fire that is still burning in Los Angeles, but said no fire agencies have pointed the utility’s connection to the fire.
The group, a unit of U.S. utility Edison International, said on Thursday its filing to regulators was triggered by online publications that “seemingly suggest” the group’s equipment may have been associated with the fire’s ignition.
“To date, no fire agency has suggested that SCE’s electric facilities were involved in the ignition or requested the removal and retention of any SCE equipment,” it said.
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Edison’s shares declined 2.65% to $67.66 in premarket trading on Friday.
Evercore ISI analyst Durgesh Chopra said on Friday a 10% decline in the company’s stock value on Wednesday, as wildfires raged out of control near Los Angeles, erased about $3 billion in its equity value.
The decline, he said, was close to the company’s maximum exposure of $3.9 billion to AB 1054, also known as Wildfire Insurance Fund, if deemed imprudent with its electric equipment and facilities.
The fund was established with a nearly $21 billion in 2020 to reimburse utilities for wildfire-related claims above $1 billion.
If the company is found imprudent or partially imprudent, shareholders must pay up to 20% of the $3.9 billion for Edison and the investigation can take one to two years, added Chopra.
The utility added that it did not find any interruptions or anomalies in its transmission lines until more than an hour after the reported start time of the fire, citing preliminary analysis done by the group.
“Aside from the preservation notices suggesting SCE’s potential involvement and significant media attention surrounding the fire, we do not believe this incident meets the reporting requirements,” the utility added.
Two massive wildfires, the Palisades Fire between Santa Monica and Malibu on the city’s western flank and the Eaton Fire in the east near Pasadena, have consumed more than 34,000 acres (13,750 hectares) and have lead to 10 deaths.
The fires have collectively devoured over 10,000 homes and other structures and have been ranked as the most destructive in Los Angeles history.
Private forecaster AccuWeather have estimated the damage and economic loss at $135 billion to $150 billion, portending an arduous recovery and soaring homeowners’ insurance costs.
(Reporting by Bipasha Dey and Arunima Kumar in Bengaluru; Editing by Raju Gopalakrishnan and Shinjini Ganguli)
