Los Angeles Wildfire Liability for Utility Depends on Cause
The financial responsibility of the Los Angeles Department of Water and Power (LADWP) for the recent Palisades Fire hinges on the involvement of its power lines or assets in igniting the blaze, according to a report released by credit rating agency Moody's on Friday.
The Palisades Fire, which erupted on January 7th, has consumed nearly 24,000 acres and is still under investigation to determine its cause. Moody's noted that LADWP, the nation's largest municipal utility, has yet to submit an incident report regarding the fire.
Moody's indicated that damage to LADWP's distribution lines and infrastructure is unlikely to significantly impact the utility's financial stability. A significant portion of its power infrastructure in the fire-affected areas was buried underground, safeguarding it from the flames.
The agency suggested that the expense of burying the remaining above-ground power lines in high-risk wildfire zones could be incorporated into LADWP's future plans. "We anticipate that the damage to the power system's assets and the subsequent repair or reconstruction costs will be manageable," Moody's stated.
However, if LADWP equipment is found responsible for sparking the Palisades Fire, it could pose a greater financial risk to the utility due to the potential for costly lawsuits.