An Idle Tower, 19 Dead, and the Bill Ratepayers Will Pay Twice

Los Angeles County fire officials have confirmed what the frayed wires on an idle Southern California Edison transmission tower already knew: neglect kills. Sparks from bare, uninsulated conductors on an out-of-service tower atop a ridge thick with dry fuel ignited the 2025 Eaton Fire on January 7, 2025, at 6:18 p.m. Within ten minutes, the blaze consumed the mountainside. Eighteen months of investigation, involving electrical and metallurgical experts, concluded that electrical arcing on the SCE equipment was the cause. ^[1] Nineteen people died. Nearly 10,000 structures burned or were damaged. Firefighters spent a month extinguishing the conflagration across 22 square miles. Victor Shaw, 66, was found dead beside the road with a garden hose still in his hand.^[1]

The question is not whether SCE's equipment failed. The question is what SCE collected in rates to keep it from failing, what it actually spent, and who will now pay to rebuild. That tower was not abandoned yesterday. It was idle, meaning in the utility's inventory, maintained (or not) by SCE, with bare wires exposed to weather and vegetation encroachment for years. ^[2] SCE told investigators it takes "potential role in the start of this fire seriously from the very beginning," which is language for "we already knew our equipment was dangerous." ^[3] The utility did not replace the insulators. It did not de-energize and secure the idle lines. It collected rates that included depreciation and maintenance allowances for that tower and did not spend them on it.

This is the mechanism. A monopoly utility collects depreciation and O&M funding in rates for every asset on its books, including idle transmission towers. That money is the ratepayer's purchase of system upkeep. When the utility underspends on the asset class that matters, vegetation management, pole inspection, transmission tower maintenance, insulation replacement, it harvests the difference as cash available to distribute to shareholders. The deferred maintenance does not stay deferred. It fails. It fails catastrophically when the asset is exposed to wind, dry fuel, and age. Then the utility files a hardening request or resilience rider to rebuild what was already paid for once, and ratepayers fund it a second time. The audit trail is discoverable: FERC Form 1 shows what was collected for transmission O&M, what was actually spent on tower inspection and conductor maintenance, and what was paid to shareholders as dividends. Past rate cases show what maintenance funding was granted. The evidence is in the docket.

PG&E's wildfire record, the deadliest utility-caused disaster sequence in modern U.S. history, supplied the precedent. Post-fire investigations at the CPUC and in Judge Alsup's bankruptcy proceedings found that PG&E had collected billions in depreciation and maintenance allowances for decades, underspent on vegetation management and asset inspection, and distributed the cash to shareholders while deferring the very work that would have prevented ignition. The 2018 Camp Fire killed 85 people; investigation found PG&E equipment that had not been inspected in years. The remedy imposed was disallowance: costs attributable to imprudent past maintenance were assigned to shareholders, not ratepayers. Penalties and performance-based reliability mechanisms followed. SCE's case is not yet adjudicated. But the template exists.

What makes this moment urgent is the hardening request that will follow. SCE will file for a transmission resilience surcharge, and the request will cite the Eaton Fire as proof that the grid needs modernization. It will propose undergrounding, re-insulation, and tower replacement on a cost-plus basis, earning the utility a rate-of-return (likely 9 to 11 percent, depending on the CPUC's current allowed ROE) on the new capex. Ratepayers will fund the work. Shareholders will earn a return on it. The utility will have paid nothing from its own capital for the imprudence that started the fire. The mechanism is called "cost-of-service regulation," and it rewards building and rebuilding, not keeping the lights on safely. There is an alternative: performance-based regulation, which puts the utility's revenue at risk against reliability and resilience outcomes. Britain's RIIO framework and Hawaii's 2020 PBR model bolt explicit penalties for neglect-driven failures onto rates, so a utility that defers maintenance loses money, not profit. A reliability penalty mechanism tied to the Eaton Fire's ignition cause, transmission asset inspection and maintenance failure, would require SCE to absorb the cost of the catastrophe it negligently allowed. That mechanism does not yet exist in California. It is winnable in the current CPUC rate cases.

Every household that lost a home to sparks from an idle tower, and every family that lost someone standing beside it with a garden hose, funded the depreciation allowance that was not spent to keep the tower safe. They will now fund the rebuild. The alternative is a regime that names the neglect, measures it against what was collected and what was spent, and makes shareholders absorb the cost of their utility's imprudence. That requires a penalty mechanism and a willingness to invoke prudence review in the rate case that follows. Both are buildable now. Delay has named beneficiaries: the utility, its shareholders, and the regulatory structure that treats maintenance as optional and catastophe as a ratepayer expense.