The City of Malibu will be given $13.7 million from Southern California Edison (SCE) as part of a $360 million settlement the utility reached with 23 public entities resulting from fires and other disasters in 2017 and 2018. The announcement was made by the city on Wednesday afternoon, Nov. 13.
“We are very satisfied with the settlement,” City Attorney Christi Hogin said in a phone interview with The Malibu Times on Tuesday, adding, “The amount of real cash that was coming out of the general fund matches almost exactly what we are receiving in the settlement.”
The 23 entities that settled their suits against the utility company include victims of the Woolsey Fire as well as the 2017 Thomas and Koenigstein fires and the 2018 Montecito Debris Flows.
“Malibu experienced one of the worst disasters in the city’s history and suffered millions of dollars in taxpayer losses from the Woolsey Fire,” Mayor Karen Farrer said in a statement provided by the city. “This settlement will help the city continue to provide services to the community and keep moving forward with our recovery.”
According to information from the city, damages caused to the city by the fire included “lost taxpayer resources such as lost revenues, lost property, increased expenditures and lost community assets such as environmental and recreational resources as well as government infrastructure.”
When asked what damages the city was seeking in its suit, Hogin described the basis for the suit against the utility company, which was announced during a Malibu City Council meeting on Monday, April 22.
“First of all, we sued because we believed that Southern California Edison was responsible for the fire. So, without cataloguing exactly what the damages were, our position was that whatever damages the city had, then Southern California Edison was responsible for them,” Hogin described. “Second—we looked at every possible damage that there were—not only the infrastructure, some of our roads and various things were affected by it, but also all of the personnel and time it’s taken for the recovery—all of it. The loss of the open space, the availability of the park[s], lost tax revenue from having both the drain on the businesses and properties, assessments are going to change—the huge financial hit that we believe was caused singularly by Southern California Edison’s failure to maintain their power lines properly.”
Since the news of the massive settlement, concern has been raised in the community over whether the $360 million price tag will come out of ratepayers’ pockets, if the utility moves to raise rates to cover losses. Hogin said this also factored into the decision making on the part of the city, when it came to determining how to negotiate with SCE.
“Everybody needs electricity and somebody has to pay for it ... the utilities are heavily regulated by the PUC (Public Utilities Commission) ... The company will definitely have to account for how it’s going to, going forward, pay off the settlement,” Hogin described, adding the commission’s job is to keep the utility from “creating an unnecessary burden on the ratepayers.”
Malibu was represented in the mediation by Hogin and another lawyer from her firm, John Natalizio from Best, Best and Krieger, as well as outside counsel, Baron & Budd attorneys Scott Summy, John Fiske, Torri Sherlin and Stephen Johnston.
“Everybody was at the table—FEMA, OES [office of emergency services], everybody was watching; this wasn’t like some deal that was cut outside of reality,” Hogin added, “So, that being said, we have good reason to believe they’re going to be able to pay it and survive and electricity will be available going forward.” In other words, the settlement shouldn’t be enough to bankrupt SCE, as was the case with Pacific Gas & Electric in Northern California.
According to the city, the settlement resolves legal damages asserted by the City of Malibu but does not affect other claims from private citizens or businesses.
The settlement funds will be paid in December of this year. Hogin also confirmed the $13.7 million was the net amount going to the city, after “fees and costs.” Those came to about an additional 18 percent above the $13.7 million settlement the city will receive.