Los Angeles finds itself in the center of news headlines due to their ongoing battle with fires, most notably the Palisades and Eaton blazes. Starting on January 7th , climate and weather came together to produce what could be the costliest fire [1] in the state’s history, a history already rich in high-cost fires. Southern California has had a series of extreme water years, with exceptionally strong rainfall the last two winters followed by the current situation where Southern California has seen no precipitation for the past seven months. The fallout from this is simple, the past two winters produced tremendous plant growth which acted as fuel once the Santa Ana winds hit the grid on the 7th (producing hurricane force gusts downslope from the mountains and hills into urban areas on the boundaries of the city). Once ignited the winds blew into the burning grass, producing intense and rapidly spreading blazes well exceeding the ability of local firefighters to effectively respond. At this point, it seems the worst is behind us with at least partial containment achieved and Santa Ana winds looking to remain calm. Of course, until rain returns to Los Angeles the danger will not be entirely gone. In this special report we will give our insight into the data that suggested such a disaster was an inevitability. We then turn to power markets which and see what impact this event had on operations at SCE.

Figure 1 | Water Year to Date Precipitation Percentage of Average 1/13/2025