SCE Resolves All Insurance Subrogation Claims for the Woolsey Fire
January 25 2021 - 08:30AM
Business Wire
- All subrogation plaintiff claims for the 2017 and 2018
wildfire and mudslide events resolved.
- SCE’s best estimate of total losses for the 2017/2018
Wildfire/Mudslide Events remains unchanged.
Southern California Edison and the holders of Woolsey Fire
insurance subrogation claims have entered into an agreement
settling all subrogation claims in the pending litigation arising
from the 2018 Woolsey Fire. SCE also has reached settlements with
approximately 1000 individual plaintiffs in litigation arising from
the 2017/2018 Wildfire/Mudslide Events, which include the Woolsey
Fire, the 2017 Thomas and Koenigstein fires and the 2018 Montecito
Mudslides (TKM). No admission of wrongdoing or liability was made
in reaching these settlements.
“We have made another significant step toward resolving pending
wildfire-related litigation,” said Pedro J. Pizarro, president and
CEO of Edison International, parent company of SCE. “This
settlement is with all insurance subrogation plaintiffs in the 2018
Woolsey Fire litigation. Combined with the settlement announced on
Sept. 23, 2020, in the TKM litigation, SCE has resolved all
subrogation plaintiff claims for the 2017/2018 Wildfire/Mudslide
Events. The company continues to explore reasonable settlement
opportunities with other parties.”
Under the settlement, subrogation plaintiffs will receive $2.2
billion within 90 days for claims based on payments they have
already made to individual and business policyholders associated
with the Woolsey Fire. SCE will pay additional amounts for claims
arising from future payments that may be made to policyholders on
or prior to July 15, 2023, up to an agreed-upon cap.
After consideration of the settlement and other available
information, SCE’s best estimate of total losses accrued for the
2017/2018 Wildfire/Mudslide Events remains unchanged. As of Sept.
30, 2020, SCE’s best estimate of expected potential losses for
remaining alleged and potential claims related to the 2017/2018
Wildfire/Mudslide Events was $4.6 billion. As noted previously,
this estimate does not include any potential fines and penalties.
This amount will be reduced by the initial $2.2 billion to be paid
under the settlement. SCE has approximately $700 million remaining
in expected recoveries from insurance for the Woolsey Fire
litigation. SCE expects that this insurance will be exhausted after
expected recoveries for the settlement.
Timing differences between payments to the subrogation
plaintiffs and reimbursement by insurance will be financed by SCE
with short-term debt supported by its existing credit
facilities.
Consistent with the company’s update on its third-quarter 2020
earnings call, Edison International anticipates issuing
approximately $1 billion of equity to invest in SCE to enable the
utility to debt-finance claims payments and maintain
investment-grade credit ratings.
As previously disclosed, SCE will seek to recover uninsured
costs resulting from the 2017/2018 Wildfire/Mudslide Events through
electric rates. Recovery of these costs is subject to approval by
regulators.
Additional Information
The company also made an 8-K filing that can be accessed
here.
SCE’s Efforts at Managing the Wildfire Threat in
California
Our thoughts are with communities across the state that are
suffering losses due to wildfire. At SCE, safety remains our first
and highest priority. SCE continues to implement measures to reduce
wildfire risk as outlined in its latest Wildfire Mitigation Plan
(WMP), approved by the California Public Utilities Commission on
June 11, 2020. The company will file its 2021 WMP on Feb. 5.
Safe Harbor Statement for Investors
Statements contained in this press release about the settlements
and SCE’s wildfire mitigation efforts, and other statements that do
not directly relate to a historical or current fact, are
forward-looking statements. In this press release, the words
“believes,” “continuing to,” “predict,” “plan,” “may,” “will” and
variations of such words and similar expressions, or discussions of
strategy, plans or actions, are intended to identify
forward-looking statements. Such statements reflect our current
expectations; however, such statements necessarily involve risks
and uncertainties. Actual results could differ materially from
current expectations. Other important factors are discussed in
Southern California Edison’s Form 10-K, most recent Form 10-Q and
other reports filed with the Securities and Exchange Commission,
which are available on our website: edisoninvestor.com. Edison
International and Southern California Edison Company have no
obligation to publicly update or revise any forward-looking
statements, whether due to new information, future events or
otherwise.
About Southern California Edison
An Edison International (NYSE:EIX) company, Southern California
Edison is one of the nation’s largest electric utilities, serving a
population of approximately 15 million via 5 million customer
accounts in a 50,000-square-mile service area within Central,
Coastal and Southern California.
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version on businesswire.com: https://www.businesswire.com/news/home/20210125005276/en/
Investor Relations Contact: Sam Ramraj, (626) 302-2540 Media
Contact: Gloria Quinn, (626) 302-2255
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