SACRAMENTO — The California Board of Equalization on Wednesday denied Southern California Edison’s appeal of its 2025 unitary property valuation and affirmed the board-adopted value of $41,664,500,000. The board voted 4–1 after an extended oral hearing and exchanges between Edison’s counsel and state appraisal staff.

The decision came after Edison’s attorneys argued the board’s valuation overstated fair market value because it did not exclude or otherwise adjust for certain wildfire-related expenses that the company cannot earn a regulatory return on. “Staff should have allowed Edison to annualize its initial $2,400,000,000 contribution just as the assessor’s handbook directs,” counsel Lou Ambrose told the board, pressing that the payment to the wildfire insurance fund functions like prepaid insurance and affects cash flows in the income approach.

State Assessed Properties Division staff countered that petitioner has raised substantially the same issues in prior years without supplying new evidence. David Lehi, representing SAPD, told the board that for this tax year the petitioner added about $4,400,000,000 in new property while asking for roughly a $3,100,000,000 reduction from last year’s value. Staff also described wildfire-related adjustments already applied that together reduced petitioner’s unitary value by approximately $2,900,000,000.

Edison asked the board to remove AB 1054-related capital expenditures from the historical-cost-less-depreciation (HCLD) indicator, to account for wildfire-claims liabilities and to reconsider the longstanding 75/25 HCLD-to-income weighting used to reconcile value indicators. Counsel argued the HCLD and income indicators diverged by approximately $8 billion (HCLD ≈ $43.7 billion vs. income ≈ $35.6 billion) and that a willing buyer would weigh cash flows more heavily.

Staff explained their methodology, citing the reliability of HCLD for rate-regulated utilities and saying mitigation, market signals and regulatory treatment since 2017–2018 have materially reduced risk. Staff noted credit-rating agency actions and CPUC findings supporting the view that wildfire-related risk has been mitigated since the major 2017–2018 events.

After questions and rebuttal, Vice Chair Lieber moved to deny Edison’s petition and affirm the board-adopted unitary value; Member Vasquez seconded. The roll call produced one dissenting vote from Chairman Gaines and affirmative votes from Vice Chair Lieber, Member Vasquez, Member Schaffer and Controller Cohen; the motion carried.

By statute, because the tax controversy exceeded $500,000 this hearing is subject to Revenue and Taxation Code §40; the appeals attorney will prepare a written decision memorializing the board action. The board recessed for a one-hour lunch at 12:13 p.m.

Why this matters: The unitary valuation determines a large portion of statewide property tax allocations for investor-owned utilities and can move hundreds of millions in assessed value, affecting county rolls and taxpayer liability. The dispute centers on how wildfire mitigation costs, insurance prepayments and claims liabilities should factor into methods the board uses to estimate fair market value.

What’s next: The board’s written decision will be drafted under the requirements of rev. & tax. code §40 and will record the legal findings and the factual basis for the board’s action.