Eaton Fire Officially Designated as Covered Wildfire, Saving SCE from Bankruptcy

The Eaton Fire's designation as a covered wildfire shields SCE from financial ruin. However, it raises concerns about the future resources of the state's wildfire liability fund.

, and Administrator

2025 October 31 . 5:09 AM

1 min read

In this picture at the top we have grass, mountains and greenery & in the bottom image we have... — In this picture at the top we have grass, mountains and greenery & in the bottom image we have vehicles on the road with fire.

Eaton Fire Officially Designated as Covered Wildfire, Saving SCE from Bankruptcy

The Eaton Fire, which devastated Los Angeles County in January 2023, has been officially designated as a covered wildfire. This means Southern California Edison (SCE) will draw from California's wildfire liability fund to cover its costs, potentially saving the utility from bankruptcy-level losses. The fire destroyed over 9,000 buildings and is set to become the costliest wildfire in the state-administered fund's history, with payouts expected to reach tens of billions of dollars.

The California Public Utilities Commission (CPUC) decided that SCE qualifies for a payout from the California Wildfire Fund. The California Earthquake Authority made this determination, marking a significant development in the aftermath of the fire. The Eaton Fire's designation as a covered wildfire shields SCE from potential financial ruin, but it also raises concerns about the fund's future resources. The payout could drain a substantial portion of the fund, leaving less to cover potential utility-caused fires in the future.

The Eaton Fire, with its devastating impact on Los Angeles County, has highlighted the complex interplay between wildfires, utilities, and insurance funds. While the official designation provides relief for SCE, it also underscores the need for careful management of the state's wildfire liability fund to ensure its long-term sustainability.