(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Jenna Greene

Jan 16 (Reuters) - High voltage power lines? Arson?

Embers from a minor blaze that smoldered and reignited days

later? All of the above?

Speculation on what caused the Los Angeles-area fires

abounds - as does the related question of who'll pay for the

damages.

As my Reuters colleagues reported, the first lawsuits have

already been filed against Southern California Edison. The suits

allege the investor-owned power company's equipment is

responsible for igniting the Eaton fire in Altadena, which

according to Cal Fire has burned more than 14,000 acres and

destroyed at least 4,600 structures.

The fires broke out amid high winds, low humidity and an

unusually dry winter in Southern California.

Southern California Edison "understands lawsuits related to

the Eaton fire have been filed," a company spokesperson told me.

"SCE will review them. The cause of the fire continues to be

under investigation."

Amid the uncertainty, one thing seems clear: The liability

landscape for the state's biggest privately owned utilities has

shifted since a series of Pacific Gas & Electric-sparked fires

in 2017 and 2018 charred huge swaths of Northern California,

resulting in more than 100 deaths and destroying thousands of

homes and businesses.

Full disclosure: My father in 2017 lost a rental property

in Santa Rosa in the Tubbs Fire. Seven years later, he's still

awaiting final payment from the $13.5 billion PG&E-funded Fire

Victim Trust, which was structured in tandem with PG&E's Chapter

11 bankruptcy. To date, it has paid claimants 70 cents on the

dollar for their damages.

In the wake of the PG&E morass, state lawmakers in 2019

created the $21 billion California Wildfire Fund, offering the

potential for speedier and more robust compensation for victims

of some utility-caused fires, as well as protection for power

companies, should they be hit with massive claims.

But as I'll explain, the fund's coverage is limited, which

likely means uneven recompense for those who have suffered from

the devastation. It won't help people who lost their homes in

Pacific Palisades, for example, where a separate fire in an area

not covered by the fund continues to burn.

"It's important to understand what the fund is - and what it

isn't," plaintiffs' lawyer Gerald Singleton, who has filed a

suit against SCE in connection with the Eaton fire, told me.

Despite its inclusive-sounding name, the fund is not a pot

of money for California wildfire victims in general.

"It essentially acts as a form of reinsurance," said

Singleton, who said preliminary estimates of Eaton fire damages

range from $5 billion to $7 billion.

Per its website, the fund only covers claims against the

three utilities that agreed to contribute a combined $10.5

billion to participate - SCE, PG&E and San Diego Gas & Electric

- and it only pays out if the utility is found liable for

causing the fire.

The utilities' customers are contributing the other $10.5

billion, paying an average surcharge of $2.50 per month until

2036.

The legislation also requires the participating utilities to

invest in improving the safety of their infrastructure and

operations.

In what SCE called "an abundance of caution," the company on

Jan. 9 filed an incident report with the California Public

Utility Commission. In the report, SCE stated it had already

received notices from insurance company lawyers requesting that

it preserve fire-releated evidence in the event of litigation.

The utility added that its preliminary data indicated no

"interruptions or electrical or operational anomalies" in its

equipment until more than an hour after the fire was reported to

have started, pointing against causation.

But if authorities do in fact deem SCE equipment

responsible for the Eaton fire, the company will be on the hook

for paying the first $1 billion in claims. After that threshold

is met, it can seek reimbursement from the fund for subsequent

payouts.

Also, if regulators later find the company was "imprudent"

in causing the fire - a new standard created by the legislation

- SCE could be responsible for up to $3.9 billion.

None of this applies to the Pacific Palisades fire, however.

The wealthy enclave is served by the municipally owned Los

Angeles Department of Water and Power, which opted not to

participate in the fund (though if at fault, the utility would

still be responsible for damages).

An LADWP spokesperson did not respond to a request for

comment.

No cause for the Palisades Fire has been released, but

investigators are reported to be focused on human-caused

factors, not LADWP equipment.

If borne out, that would spare the utility from liability,

leaving the tab for damages on the victims and their insurers.

The disparity in outcomes - where one set of fire victims

could be made whole by the fund while those on the other side of

the county, through no fault of their own, could be left hanging

- strikes me as troubling.

To Mark Toney, executive director of ratepayer advocacy

group The Utility Reform Network, it suggests the need for "a

bigger discussion on changes to the paradigm," including

expanding the fund's coverage and criteria.

It's also unclear what happens when the fund inevitably runs

out of money.

Because as a Californian, there's one thing I know about

living in the state I love: There's always a next time for a

catastrophic fire.