Business
Edison under scrutiny for Eaton fire. Who pays liability will be 'new frontier' for California
Six years ago, Pacific Gas & Electric filed for bankruptcy after it was found liable for sparking a succession of devastating wildfires, including the blaze that destroyed the town of Paradise and led to more than 100 deaths.
Wall Street investors lost confidence and ratings agencies threatened to downgrade California’s investor-owned utilities, prompting legislators to come up with an innovative solution: the establishment of a $21-billion wildfire fund, split equally between shareholders and utility customers.
Now, after two major wildfires have destroyed thousands of homes and left at least two dozen dead in and around Los Angeles, the state’s wildfire fund would face its first major test if another utility is found liable for sparking the blazes.
Even the lawmaker who spearheaded legislation to set up the wildfire fund is not sure whether his efforts to mitigate the risk to utility companies — allowing them to keep functioning in a state prone to escalating risk of wildfires — is enough.
“This is the most profound test case that the fund will potentially be up against,” said Christopher Holden, a former Democratic legislator who sponsored the bill that created the fund. “This is a new frontier,” said Holden, who lives in Pasadena and had to evacuate during the Eaton fire.
“It was a new frontier when we wrote the bill — and now, just five years later, we’re going through another frontier.”
If investigators determine that a utility company caused the Eaton or Palisades fire, it could send shock waves across the utility industry and the broader insurance market.
Mark Toney, executive director of TURN, The Utility Reform Network, said the massive scope of the L.A. County fires raised significant questions about the fund’s ability to cover insurance liability. Even if the fund is able to bail out utility companies for the fires, it’s uncertain whether it could then cover fires that may crop up in the future.
“Will the fund work right?” Toney said. “Who ends up paying?”
The causes of the fires have yet to be determined.
Investigators looking into the Eaton fire — which caused at least 17 fatalities and damaged an estimated 7,000 structures across Pasadena and Altadena — are focusing on an area around a Southern California Edison electrical transmission tower in Eaton Canyon.
Edison has denied fault in the Eaton fire. In a statement to The Times, the company said that its work to mitigate wildfires had cut the risk of catastrophic fires by 85% to 90% compared with the risk before 2018.
The Los Angeles Department of Water and Power, the municipal utility that operates in Pacific Palisades, says it did not opt into the wildfire fund because it would have been too costly for its customers. If the large municipal utility was liable for the Palisades fire, the city of L.A. could face exorbitant financial costs.
But sources with knowledge of the investigation have told The Times that the fire, which started in the Skull Rock area north of Sunset Boulevard, appears to have human origins. Officials are looking into whether a small fire possibly sparked by New Year’s Eve fireworks could somehow have rekindled Jan 7.
Michael Wara, an energy and climate scholar at Stanford University, said the state’s entire insurance landscape, not just California’s wildfire fund, might have to be recalibrated if a utility company were found to have caused a major L.A. fire.
“The big question is how available and affordable is overall insurance?” said Wara, who has served on the California Catastrophe Response Council, the fund’s oversight body. “California, I think, is going to face greater challenges than it has over even the last few years, when it hasn’t been easy for its primary insurers and other entities to access these global reinsurance markets that fund losses after a catastrophe.”
Under California law, utility companies are strictly liable for all damages to real property associated with a fire, including houses.
The wildfire fund is a new model in which the state’s three big owner-operated utility companies — Pacific Gas & Electric Co., San Diego Gas & Electric Co. and Southern California Edison — pay into a fund, which they can then tap into if their equipment is determined to have caused a blaze. When that happens, they are responsible, on their own, for the first $1 billion of losses. After that, the wildfire fund will pay.
“If the wildfire fund did not exist today, Edison might be in real trouble,” Wara said. “We would see something probably similar to what happened to PG&E after the Camp fire.”
Back then, Wara said, utilities were held to a standard of strict liability: If electrical equipment was found to have caused the fire, they were on the hook.
Now, if Edison is ultimately held responsible, Wara said, the company can go to the wildfire fund and get money.
“That’s really important in terms of making sure that the victims are made whole, at least for their property losses,” he said.
Although it is too soon to estimate the damage of the Eaton fire, Wara said thousands of structures have been lost in an area where the average home value is around $1.3 million. Costs, he said, could reach $10 billion.
If officials find that Edison caused the fire but acted responsibly, Wara said, as much as half of the fund’s $21 billion could be depleted.
“That’s half the fund in one fire — five years into the life of the fund,” said Wara, who has served as a wildfire commissioner for California and a member of the California Catastrophe Response Council, the oversight body of the California wildfire fund.
The problem is compounded by the fact that the wildfire fund has so far amassed only $14 billion, because utility companies cannot immediately expect ratepayers to pay their share of half the $21 billion.
“If you are an investor in PG&E or Edison, you might look at this and think, ‘Hmm, I thought the fund was big enough. Maybe now I’m not so sure.’ The fund is there to provide confidence. If the fund isn’t big enough, there will be less confidence.”
The California Department of Forestry and Fire Protection, or Cal Fire, will lead the investigation into what caused the fires.
Then, the California Public Utility Commission determines whether the utility company acted reasonably or unreasonably and, if so, to what degree.
If a utility was found to have failed to act prudently, Wara said, it would have to reimburse the fund. The amount it would pay, however, is capped on the size of the reimbursement relative to the size of their rate base.
Edison International Chief Executive Pedro Pizarro told Bloomberg Television that state regulations allowed the company’s holder liability to be capped at $3.9 billion.
“The reason the cap is there is if Edison is reimbursing the fund, that’s basically electricity customers reimbursing the fund,” Wara said. “Edison will go to the California Utility Commission and say, ‘We need this money to be expensed in rates.’”
The fund would also have to pay for wrongful deaths, Wara said, but that’s a different kind of claim.
“You have to show negligence, and that may be hard to prove, actually, because Edison may have acted reasonably, and yet the fire still was set by their equipment,” Wara said. “Edison would have a lot of reason to claim that it has acted reasonably, in a sense that it has spent enormous sums to try to reduce the risk, and there’s an agency that’s overseeing all of this and approving and monitoring compliance with its plans.”
Still, even if the wildfire fund bailed out Edison, there could be grave consequences for Edison and other utility companies. If a large portion of the wildfire fund’s $21 billion was depleted, that could affect market perception of the fund, negatively affect utility company credit scores, and plunge investor-owned utilities — which cover about 80% customers across the state of California — into chaos.
On Tuesday afternoon, shares for Edison International, the utility’s parent company, rose less than 1% to $57.27, marking a more than 24% drop in the week since the fires broke out. That represents a more than $7 billion decline in the company’s market cap.
“If the [utility] market collapses, then we’ve got a catastrophic situation,” Holden said. “We have to secure the market going forward.”
Last fall, state regulators criticized Southern California Edison for falling behind in inspecting transmission lines in areas at high risk of wildfires.
Utility safety officials also said in a report that the company’s visual inspections of splices in its transmission lines were sometimes failing to find dangerous problems.
“We have not seen in our telemetry any indication of an electrical anomaly,” Edison International CEO Pedro Pizarro said Monday on Bloomberg Television. “Typically, when you have a fire across infrastructure, you see voltage dropping. We have not seen that in our study.”
Pizarro said Edison had turned off distribution lines near the start of the Eaton blaze before it erupted in a canyon near Altadena, but not the transmission lines. “Transmission lines are larger and stronger,” he said, “and so they can operate safely at higher wind speeds.”
Several of California’s most destructive wildfires in the last decades have been caused by aging electrical equipment. The 2018 Camp fire was caused by 100-year-old high voltage transmission towers. The 2019 Kincade fire was caused by a line built half a century ago. It may be the case, Wara said, that California’s older utility infrastructure, even when inspected, is not up to the job.
“A lot of the transmission system in California is quite old,” Wara said. “There were pulses of construction activity that led to the system we have and the last big one was when Pat Brown was governor.. .If something failed on that tower that caused ground faults, at some point we need to ask ourselves… maybe we shouldn’t be relying on old infrastructure?”
In an era when hurricane-force winds can whip up wildfires that engulf vast areas, Toney questioned whether it made sense for a utility company to be responsible for the fate of every home. Wildfires, he said, are caused not just by faulty utility equipment, but by lightning, arson, even legal fireworks, and then fueled by poor development and insufficient cutting back of vegetation and landscaping.
“It’s a mistake just to isolate utility,” Toney said. “It’s time for a new paradigm. When it comes to the cost of rebuilding, the utilities may not be big enough.”
Business
How Google’s 32-million mosquito project could change California’s battle against dengue
Google took internet searches to the next level. Could it do the same for mosquito control?
The Silicon Valley-based tech giant is seeking to release up to 64 million sterilized male mosquitoes in California and Florida over two years, according to a notice in the Federal Register. It’s part of an ambitious effort to curb the diseases the insects spread.
Google says it can harness technology to optimize a concept that’s been around for decades, but hasn’t been successfully scaled with mosquitoes to rein in disease.
For example, the process often involves separating the insects by sex to isolate the males. Currently, that’s done manually and can be time consuming. Google says it’s “developing new technologies that combine sensors, algorithms and novel engineering to take advantage of unique aspects of mosquito biology to quickly and accurately sort males from females.”
The company also says it’s building software and monitoring tools to guide releases of sterile males, and its scientists and engineers are creating sensors, traps and software to decide which areas need to be treated and treated again.
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Called Debug, the project targets Aedes aegypti mosquitoes, which are native to Africa but have infiltrated nearly half of California’s counties since first being detected in the state in 2013. Not only do they drive residents nuts with itchy bites, but they can carry a number of potentially serious diseases, including dengue, Zika, chikungunya and yellow fever.
The plan is to infect males — which don’t bite — with a bacteria called Wolbachia, which effectively renders them sterile. They are then released to seek out wild females and mate. Females will lay eggs but these won’t hatch, which experts say drives down the population over time.
There are other methods to sterilize male mosquitoes. Vector control districts serving Los Angeles, Orange and San Bernardino counties have irradiated males and released them in recent years.
Early results are promising. Two neighborhoods treated by the Greater Los Angeles Vector Control District saw a more than 80% reduction in the female Aedes aegypti population in 2024 and 2025.
But as the Greater L.A. district seeks to expand its operations, cost poses a problem. Last year, business owners signaled they weren’t willing to shell out more every year to make it happen. District officials are still hoping to sway them.
If Google moves forward, it wouldn’t be the first time it has been involved in such an effort. In 2018, the company conducted a large-scale trial in Fresno County, releasing 14.4 million Wolbachia-infected males in three neighborhoods.
“At peak mosquito season, the number of female mosquitoes was 95.5% lower in release areas compared to non-release areas, with the most geographically isolated neighborhood reaching a 99% reduction,” a 2020 paper reported.
Google has applied for a permit from the Environmental Protection Agency to carry out the releases in California and Florida, for which the federal agency is currently seeking comments before deciding whether to grant approval.
The company aims to release up to 16 million Wolbachia-infected males in California, and the same in Florida, per year for two years, the Federal Register announcement said, for a total of 64 million.
Urgency to tamp down the invasive mosquito population in California has increased since 2023, when the state logged its first locally acquired dengue cases — meaning people were infected in their communities, not while traveling. The following year, the number of locally acquired cases ballooned to 18, with 14 of them in Los Angeles County.
A study published last week in “The Lancet Regional Health — Americas” found that approximately 18.2 million Californians — primarily in the Central Valley, L.A. and San Diego areas — live in regions where conditions are probably suitable for local dengue transmission.
“Under moderate scenarios of climate warming and urban expansion, an additional 4.1 million residents may be at risk by mid-century,” according to the study led by UC Berkeley’s Lisa Couper. Researchers note the current and future risk of transmission remains low except during summer in the Central Valley and Southern California.
“I’m pretty much in favor of whichever [sterile insect technique] approach gets us the disease prevention and nuisance control we need and at the lowest price,” Susanne Kluh, general manager of the Greater L.A. County Vector Control District, said in an email.
She said her district went with radiation because it was the only approved technique when they wanted to launch their pilot, and that it’s “also the only one where some company does not make a profit in the middle.” However, she wouldn’t rule out using Wolbachia if it turned out to be the most affordable option.
Business
In a first for the country, voters in Monterey Park ban data centers
Residents of Monterey Park voted overwhelmingly to ban data centers on election day, making the San Gabriel Valley city the first in the nation to do so by public vote.
As of Wednesday, 86% of votes were in favor of Measure NDC, the city ban, according to the Los Angeles County registrar-recorder/county clerk.
Other cities and towns have passed moratoriums on data centers, as a wave of opposition sweeps the country. But the Monterey Park vote can only be overturned by another ballot measure, making it the most permanent data center ban in a jurisdiction.
Monterey Park’s City Council had already banned data centers by ordinance, after a proposed 247,000-square-foot data center met an outpouring of public anger and concern. The developer withdrew that plan.
That facility would have been less than 500 feet away from the nearest home, and would have used three times the electricity of the entire 60,000-person city. Residents said it would have caused noise and air pollution and driven up electricity rates.
“This ensures long-lasting protections for current and future generations,” Amy Wong, co-founder of the group San Gabriel Valley Progressive Action, said of the vote. “It means that future city councils cannot overturn a data center ban, even if data center developers wanted to spend money to fund pro-data center candidates.”
The measure had no formal opposition. The developer of the proposed facility, investment firm HMC StratCap, said it wouldn’t engage in the ballot fight when it withdrew in March.
The Data Center Coalition, an industry trade group, expressed disappointment in the vote.
“It sends a signal that the area is closed for business, both for data centers and for other significant economic development projects,” state policy director Khara Boender said.
“It deprives local residents of the opportunity to compete for jobs and investment, while also causing the area to relinquish substantial long-term economic investment, high-wage jobs, and critical tax revenue to neighboring areas or other states.”
SGV Progressive Action worked with hyperlocal groups including No Data Center Monterey Park to rally support for the measure.
The group is now focused on stopping data center proposals in the City of Industry and fighting a move by City of Industry, Santa Fe Springs, Vernon and City of Commerce to welcome data centers and other industry with fast-tracked permitting and tax incentives.
City of Industry, in the San Gabriel Valley, and Vernon, south of downtown L.A., are primarily industrial areas, each with around 300 permanent residents. They are employment centers, and tens of thousands of workers commute in daily.
There has been little vocal opposition to data centers among the few residents of these cities. Wong said the protest is primarily coming from the surrounding neighborhoods.
“If a data center gets built in City of Industry, residents across the region would bear the brunt of pollution and increased utility costs,” Wong said, noting that it is surrounded by 16 other cities and unincorporated communities.
Data center proposals have been limited in California compared to Virginia, Texas, Georgia, Illinois and Arizona, which sit at the center of a recent boom in hyperscaler facilities to power artificial intelligence.
California has the third-most data centers in the country, with 300, but high electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in other hotspots.
That doesn’t mean opposition hasn’t been fierce. In Coachella and Imperial County, residents are showing up in droves to protest local proposals.
In the San Gabriel Valley, Montebello, El Monte and Baldwin Park have all enacted temporary moratoriums, and Alhambra recently banned data centers as part of a zoning code update.
Wong said she hoped the ballot measure vote would galvanize the opposition. “The vote is a testament to the people power of our region,” she said. “Our region is worth protecting, and we won’t let data centers determine our future.”
Business
Rent-hike ban to protect fire victims ends despite gouging concerns
A rule intended to prevent rent gouging in the wake of the Eaton and Palisades fires has lapsed in Los Angeles County, possibly exposing some renters to hikes.
The executive order that blocked rent increases was issued by Gov. Gavin Newsom amid the devastating wildfires last year. Under the order, landlords couldn’t increase rents by more than 10% above their prefire levels.
The rule, which was supposed to be temporary and was repeatedly extended, ended Friday after a vote to extend it again failed to garner enough votes. Supervisor Lindsey Horvath, whose district includes Pacific Palisades, sounded the alarm in a motion to extend price protections that failed to pass at the Board of Supervisors’ May 19 meeting.
“These price gouging protections continue to be necessary as construction and rebuilding continue, and as thousands of people remain displaced,” the motion said. “Families which signed short-term leases could face drastic price increases of 50% or more without further price gouging protection.”
Los Angeles County is home to more than 1 million rental properties, though not all of them needed protection from the new rule. There are already stricter rent increase caps for many residences, depending on the location, type and age of the building. Despite the rent control in the region, the people of Los Angeles pay among the highest rents in the country.
It is uncertain whether renters will face rapidly rising rents now that the protection has lapsed. But some real estate experts and policymakers said there was no need for the temporary rule that was part of the governor’s state of emergency.
Supervisors Kathryn Barger, Janice Hahn and Holly Mitchell abstained from voting on the motion to extend the protection, while Supervisors Hilda Solis and Horvath supported it.
“I abstained because I did not see sufficient evidence to justify extending this emergency ordinance, nor did I see evidence to eliminate it entirely,” Hahn said.
Barger’s office said she supported allowing the protections to sunset while waiting to see whether new information emerged.
“Market data already shows countywide rents are only about 2% above pre-emergency levels and rental inventory has grown,” Barger representative Helen E. Chavez Garcia said. “The Supervisor is also mindful of the burden these ongoing protections place on small property owners throughout the county.”
Mitchell did not immediately respond to a request for comment.
There haven’t been steep rent hikes in neighborhoods within three miles of the Palisades fire, according to a Times analysis of data from Zillow, the property listing company.
In ZIP Codes within three miles of the Palisades fire, rent increased 4.8% from December 2024 to April 2025. In areas around the Eaton fire, which destroyed swaths of Altadena, rent jumped 5.2% in the same period.
In L.A. County, ZIP Codes farther from the fires saw only about a 2% increase.
A landlords representative, Jesus Rojas of the Apartment Owners Assn. of Greater Los Angeles, told the supervisors during public comment at the meeting that the county’s rent-gouging rules have “long outlived the emergency they were intended to address” and are now being “wrongfully used to harm thousands of rental housing providers throughout the county.”
“There is no proof that multifamily rental housing providers are hugely increasing rents for impacted homeowners,” Rojas said.
Indeed, there are strong signs that the property market in the Los Angeles area has at last begun to cool.
L.A. metro-area rent prices recently fell to a four-year low, with the median rent slipping to $2,167 in December.
Meanwhile, condominium sales had their slowest start of the year in decades. Condo sales in Los Angeles have plummeted to a 20-year low, with fewer than 2,000 units sold in January and February — the worst start to the year since 2005.
Newsom defended the price-gouging protections shortly after they went into effect.
“In the days following the Los Angeles firestorms, we worked quickly to protect Los Angeles survivors from any form of exploitation,” he said in February 2025. “The state has the tools in place to not only block price gouging during this emergency, but also to prosecute bad actors.”
The Los Angeles County Department of Consumer and Business Affairs said it received more than 2,000 complaints after the fires, alleging that retailers and landlords were taking advantage of people put in hardship by their losses, and sent out more than 2,000 cease-and-desist letters to businesses and landlords for alleged price gouging, said Morine Merritt, who oversees department investigations into consumer and real estate fraud.
“Close to 90% of the complaints that we received involved allegations of rent increases,” Merritt said in an interview. Now that the fire-related protections have expired, existing laws and “regular market conditions determine price increases for goods and services, including rents,” she said.
Crackdowns on fire-related rent gouging have been rare, said Chelsea Kirk of the activist organization the Rent Brigade, which analyzed L.A. County’s rental market in the year after the fires. It reported 18,360 potential examples of price gouging in listings but said that few lawsuits had been filed by authorities so far.
Last week, Rent Brigade announced what it said was the first private civil lawsuit brought by a family that claimed to be rent-gouged in the aftermath of the wildfires. Plaintiffs Randall and Candy Renick, whose Altadena home was damaged, said they were charged nearly three times the maximum permitted rate for nearly 10 months. They seek restitution of $96,000 plus civil penalties and attorneys’ fees.
The rental market has probably stabilized since the fires, Kirk said, but other families may still be “locked into illegal rents” that they agreed to pay when they were in a rush to find housing after they were displaced.
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