Edison to pay $37 million for 2007 Malibu Canyon fire

Utility poles and lines lie amid the scorched area of Webb Way and Winter Canyon Road after the October 2007 Malibu Canyon Fire. Photo by Teresa Gelbman

Southern California Edison (SCE) has agreed to a proposed $37 million settlement for its role in the 2007 Malibu Canyon fire, and admitted that one of three failed power poles owned by the company was overloaded with telecommunications equipment before it snapped and started the blaze, Edison and officials from the California Public Utilities Commission (CPUC) announced Monday.

Under the proposed settlement, Edison would pay $17 million to establish a “Safety Enhancement Fund” to assess poles in Malibu Canyon and elsewhere in the Malibu area, and replace ones that do not meet safety requirements. The remaining $20 million would go to the State of California’s General Fund.

“I am pleased to present this settlement agreement to the Commissioners for their consideration,” said Brigadier General (CA) Jack Hagan, the Director of the Safety and Enforcement Division. “As part of the settlement SCE acknowledges its responsibility in a major incident. If the settlement is approved it will go a long way toward making SCE’s system safer and more reliable.”

The fire began on Oct. 21, 2007, when three power poles next to Malibu Canyon Road failed in heavy Santa Ana winds and ignited dry brush nearby. The fire burned 3,836 acres, 36 vehicles and 14 structures, including Castle Kashan and the Malibu Presbyterian Church, and damaged 19 other structures.

In a press release Monday, Edison admitted it violated the law by “not taking prompt action to prevent telecommunications company Next G from attaching fiber optic cables to joint poles in Malibu Canyon” which caused the pole to exceed state-mandated safety limits for weight.

The company also admitted “responses to the commission’s investigation of the pole failures may have impaired the investigation.”

Specifically, Edison failed to identify pole overloading and termite damage as possible contributing factors to the pole’s failure, in addition to high winds. An Edison investigator, Art Peralta, gave state investigators an incomplete copy of data regarding the failed poles. Finally, Edison admitted a failure to disclose to state investigators that it had reused and discarded some equipment that was attached to the failed poles.

The proposed settlement agreement represents 75 percent of the Safety and Enforcement Division’s recommended $49 million penalty.

SCE President Ron Litzinger said the company was working to improve pole loading practices in a press release announcing the settlement.

“Safety is a foundational principle at Southern California Edison and is a prerequisite to everything we do,” Litzinger said. “We are working with the communication companies we share poles with throughout our service territory to better coordinate and improve pole loading practices. Our focus is on continually improving our process for loading, inspecting, maintaining and replacing poles to further protect the public and enhance electric service reliability.”

The proposed settlement must be approved by the Public Utilities Commission, which is expected to vote on it “later this year,” according to the CPUC press release.

The $17 million allocated toward Malibu will fund assessment and replacement of poles in Malibu Canyon and Topanga Canyon stretching from PCH to Mulholland Highway, then the areas from Latigo Canyon Road and Kanan Dume Road to Mulholland Highway.

Hans Laetz, who has been involved in the settlement negotiations as a citizen intervener, said the initiative was underfunded and should be expanded.

“I’m going to be urging the state to expand boundaries of the special Malibu protocol area to include all of the risky areas.” Laetz said. “We’ve had deadly fires in Malibu that broke out north of Mulholland.”

The proposed settlement makes Edison the last of the companies to settle with the PUC. AT&T, Verizon and Sprint agreed to pay $12 million in a settlement approved by the CPUC in September 2012. A second settlement for $14.5 million with NextG awaits commission approval.

In its statement, Edison said “customer rates will not be impacted by the agreement,” but that funding from the settlement would come from shareholders of the company.