Southern California Edison's Wildfire Mitigation Costs Face Scrutiny

Strategic Insights -

The California Public Utilities Commission has received a request from Small Business Utility Advocates (SBUA) to deny Southern California Edison's (SCE) application for rehearing of Decision 25-06-051, regarding the company's 2022 wildfire mitigation and vegetation management costs. SBUA argues that SCE has mischaracterized the significance of its recording costs in various accounts, including the Wildfire Mitigation Plan Memorandum Account (WMPMA) and the Fire Risk Mitigation Memorandum Account (FRMMA). The SBUA also claims that SCE has incorrectly asserted that the recovery of costs between 100 and 115 percent of the 2022 authorized amount, via Advice 5049-E, means that the costs were already determined to be incremental and not already recovered in customer rates.

Key Takeaways:

  • SBUA disputes SCE's assertion that the recording of costs in the WMPMA and FRMMA ensures that all authorized wildfire mitigation funding is spent on wildfire mitigation-related activities.
  • The Commission has emphasized that an audit does not address the prudency of costs incurred and that SCE's recordation of costs does not constitute significant evidence of reasonableness.
  • SCE claims that the Utility Audits Branch (UAB) Audit concluded that the requested costs were incurred for allowable activities, properly supported, and incremental. However, the SBUA argues that the audit did not consider the issue of double counting of STL and DOH costs.
  • In a related context, SCE obtained a PriceWaterhouse Coopers LLP audit in 2023, which concluded that the costs were incurred for allowed activities, accurately recorded, and incremental. However, the audit also revealed that SCE had inadvertently overallocated department overheads and other common costs to wildfire mitigation cost centers instead of non-wildfire base rates.
  • SBUA requests that the Commission deny SCE's AFR and notes that SCE has not established the reasonableness of the costs requested.

Statistics:

  • The SBUA disputes approximately $65 million in O&M and $36 million in capital expenditures in 2022.
  • SCE has filed an application for rehearing of Decision 25-06-051, which was filed on July 30, 2025.
  • The Commission has highlighted that an audit does not address the prudency of costs incurred.
  • The audit process has revealed that SCE had inadvertently overallocated department overheads and other common costs to wildfire mitigation cost centers instead of non-wildfire base rates.

Sources:

  • Southern California Edison Company (U 338-E) for Authorization to Recover 2022 Incremental Costs Related to Wildfire Mitigation and Vegetation Management. A.23-10-001 (Filed October 3, 2023)
  • Small Business Utility Advocates' Response to Southern California Edison's Application for Rehearing of Decision 25-06-051 (August 14, 2025)
  • Decision 25-06-051, Decision Granting, in Part, Request by Southern California Edison Company for 2022 Wildfire Mitigation and Vegetation Management Costs (July 30, 2025)