(Bloomberg) -- Edison International said its equipment has been identified as the cause of one of the most destructive fires in California history, which killed three people and burned parts of Malibu.
County fire officials have determined that the Woolsey Fire, which raged for weeks in Los Angeles and Ventura counties in November 2018, was sparked by the utility’s electrical equipment, Edison Chief Executive Officer Pedro Pizarro said in a call with investors on Tuesday. The company had previously taken a $1.8 after-tax charge in connection to wildfires in 2017 and 2018. It said on Tuesday that it doesn’t anticipate the need for another one at this time.
Edison shares plunged as much as 19% to $52.75 in after-hours trading before recovering much of the losses. Investors had expected the company would be blamed for the fire. The firm said earlier this year that it believed equipment owned by its Southern California Edison utility may be cited as the cause.
The finding comes as California is grappling with yet another devastating wildfire season. Fires have erupted at both ends of the state. One in the Los Angeles area has scorched more than 600 acres and spurred evacuations of thousands of people in some of the city’s wealthiest neighborhoods. In Northern California, another blaze ripping through wine country has burned 75,000 acres and destroyed 124 structures.
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The intensifying wildfire risk became a crisis for California’s utilities after the state’s largest, PG&E Corp., ignited a series of devastating blazes in 2017 and 2018 and wound up in bankruptcy with an estimated $30 billion worth of liabilities. Governor Gavin Newsom got lawmakers to pass legislation over the summer designed to prevent another power company from spiraling into Chapter 11 by setting up a $21 billion utility fire insurance fund for future claims.
Edison has made a $2.4 billion payment into that fund, Pizarro said.
Edison had warned that it faced downgrades into junk status without the fund.
The Woolsey Fire broke out Nov. 8 and ripped through almost 100,000 acres, forcing Malibu to be evacuated, before being contained. It destroyed about 1,600 structures and was the seventh-most destructive wildfire in state history, according to Cal Fire.
Edison, based in the Los Angeles suburb of Rosemead, had reported a power failure on its system near the fire’s origin, where it found a loose wire had come in contact with one of its power lines.
Earlier this year, investigators said Edison’s equipment started the 2017 Thomas Fire, the 10th most destructive in state history. The company has contested part of that finding. The California attorney general is probing the utility’s role in both blazes.
Edison said it was “not aware of any basis for felony liability” tied to the Thomas or Woolsey fires.
(Updates with Edison comment in last paragraph.)
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