AGUIRRE: SDG&E PLAN TO CHARGE RATEPAYERS FOR WILDFIRE COSTS IS "DONE DEAL"
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By Miriam Raftery
April 8, 2012 (San Diego) Updated April 10, 2012-- At the California Public Utilities Commission (CPUC) public meeting this week in San Diego, Administrative Law Judge Maribeth Bushey and CPUC Comissioner Timothy Simon heard from hundreds of area residents, including tearful testimony by numerous victims of the 2007 firestorms. Some held twisted burned remnants of their lost homes. Others recalled friends who perished in the flames.
But the most explosive testimony came from former City Attorney Mike Aguirre, who declared, “This decision is already made.” He then leveled accusations that the two CPUC represenstatives present, Commissioner Timothy Simon and Administrative Law Judge Maribeth Bushey, are beholden to SDG&E and subverted the legal interests of fire victims and ratepayers.
He noted that SDG&E lists the proposed `Wildfire Expense Balancing Account’ (WEBA) in its latest 10K filing and said Simon, who has been wined and dined on two continents by SDG&E executives, has issued a statement praising that report. Then he revealed, “Ms. Bushey is a former SDG&E attorney who never allowed a single deposition of SDG&E executives to be taken,” drawing gasps from the crowd.
Repeatedly Aguirre asked her, “Will you allow depositions to be taken so we can get to the bottom of these secret negotiations?” He added, “You are refusing to be accountable to the people of San Diego,” as the crowd applauded.
Many of those fire victims testified that they have not yet received a single penny of compensation from SDG&E for their lost homes and shattered lives.
ECM caught up with Bushey at the break as she headed out the exit. She confirmed that she will not allow any depositions to be taken by fire victims. “That record is closed,” she said, smirking.
ECM's editor Miriam Raftery testified to the conversation subsequently in the hearing and urged those outraged to contact the Governor to ask that he replace the pair with unbiased CPUC representatives, drawing applause from the crowd.
Fire survivor Milt Cyphert of Lakeside, who witnessed the exchange, was fuming. He denounced the proceedings as a “kangaroo court” and expressed outrage that this could happen “here in America.”
Cyphert added that as a business owner with a heating and air conditioning business, he can’t ask his customers to pay if damage occurs to a home. “Why should SDG&E?” he asked. “They spread all this money around on favors to all of these groups,” he noted of speakers testifying after receiving funds from the utility. “Why not spend that money on fire insurance instead?”
Opening the hearing, Commission Simon stated that “Contrary to popular belief, this decision has not been made.”
But Aguirre told ECM that from January 2010 to December 2011, SDG&E engaged in secret negotiations with the CPUC. “I found out and forced them to go public,” he said, adding that SDG&E has also inflated estimates of its anticipated wildfire costs. Moreover he said that Simon has “issued a statement endorsing the report” that SDG&E filed in which it claimed the $500 million in WEBA funds.
Around 650 people showed up for two public hearings at the Al Bahr Shriner Center. The vast majority spoke against the WEBA plan, which would pave the way for a potential rate hike for not only SDG&E’s uninsured liability costs in the 2007 Witch, Rice and Guejito fires that the CPUC determined it caused, but also for any FUTURE fires.
Many waved signs questioning loyalties of the CPUC or urging commissioners to make Sempra stockholders--not ratepayers--foot the bill for the wildfires.
Some speakers testified in favor of the plan, though all who supported it appeared to be organizations on which SDG&E has lavished money, current or former SDG&E employees, or labor union representatives whose members rely on SDG&E projects for jobs.
SDG&E’s attorney identified three categories for recovering “excesss wildfire costs.” Under the plan, the utility would not recoup anything for reckless/willful utility misconduct by executives under category “B”. A utility would pay zero under category “A” (acts of God, for instance) and in category “B”, even if SDG&E caused the fire through negligent actions, SDG&E wants to charge customers for 95% of costs while the utility would pay must 5% up to a $30 million cap—and ratepayers would pick up 100% of the tab after that.
That announcement drew boos from the crowd. The attorney further estimated that for the 2007 wildfires, the average cost per customer would be $3 to $4 a month spread over four years for the “typical” 500 kilowatt hours bill.
State Senator Christine Kehoe denounced the plan. “Should SDG&E be successful,” she warned, “it could create an incentive for the utility to pursue extensive litigation rather than settlement …this would impose a permanent unfair burden on ratepayers.” She added that WEBA would allow any utility to pass on 95% of the costs of wildfires that a utility causes.
Many speakers called on the CPUC to force SDG&E’s ratepayers to pick up the tab for the companys mistakes, noting that last year’s profits for parent company Sempra Energy were well in excess of a billion dollars. SDG&E estimates its uninsured liability costs for the 2007 wildfires will be $500 million—meaning shareholders could have pocketed well over a half billion in profits even if the company had fully passed on all costs last year.
Dave Roberts, deputy mayor of Solano Beach and candidate for Supervisor, said SDG&E should be required to “rebuild just like we do…by tightening its belts.”
Supervisor Dianne Jacob, whose district includes the areas hardest hit by the fires, delivered scorching testimony. “I am outraged that SDG&E would even attempt to stick ratepayers with costs for this and all future fires,” she stated. “Flames from 2007 may be out, but the people in this room feel they are still being burned.”
She noted that SDG&E paid over $76 million in bonuses since 2007 to its executives and that despite “mountains of evidence” SDG&E has refused to allow investigators access and has obstructed investigations into the fires. “SDG&E’s safety violations were not an act of God,” she concluded, drawing applause. “There must be a penalty for skirting the law…You burn it? You buy it.”
Supervisor Pam Slater-Price noted that “A typical business would have to absorb its losses” and that SDG&E is a monopoly. “SDG&E should not be attempting to maximize its profits on the backs of ratepayers.” She said the irony of asking people who lost homes to pay back a portion of settlements in higher rates is “appalling.”
A spokesman for Supervisor Ron Roberts, however, voiced support for WEBA, noting that SDG&E has helped to bring fire stations onto the Internet with its corporate donations.
San Miguel Fire Chief August Ghio also voiced support, noting SDG&E’s contributions to improve firefighters’ training. He also noted that 2007 wildfires were fueled by “hurricane force” winds. [Ghio failed to mention that the hurricane force winds were in Potrero where the Harris fire began—and that the Harris fire is NOT one of the fires SDG&E was found responsible for starting.]
Many ratepayers spoke against the proposal. One denounced it as “jutzpah—unmitigated gall.” Another said the CPUC should “change the name from balancing act to extortion act.”
Boulevard Planning Group Chair Donna Tisdale noted that in her low-income community, many more energy projects are planned, each raising the risk of another fire, yet SDG&E wants to “turn off power to our community when the wind blows.”
Tisdale urged that “SDG&E and its bootlickers be investigated under RICO [federal racketeering laws] and noted that many who testified in favor failed to disclose their financial ties to SDG&E. “It’s immoral, unethical and illegal,” she declared.
An Escondido Chamber of Commerce spokesman drew boos for saying he is “proud to have SDG&E as a partner,” leading a CPUC representative to admonish the crowd to “show respect” for all speakers. Poway Chamber’s CEO also voiced support, as did representatives from the cement workers and electrical workers unions.
Fire survivors watched in shock as a Burn Institute spokesperson testified in favor of the WEBA plan; the Institute has received funds from SDG&E.
But for fire victims, SDG&E’s WEBA request adds insult to injury.
“We got incinerated,” Ramona resident James Snyder testified. “We haven’t been paid a dime…We need some compensation. Help us, please!”
Robin Davis of Lakeside was a victim of both the 2003 and 2007 wildfires. “I can’t believe these people here could even support this,” she said of those who spoke in favor of opening the door to charge fire survivors for SDG&E’s wildfire costs. “My husband is unemployed…We can’t afford this…SDG&E is running rampant, destroying our backcountry with wildfires and Sunrise Powerlink..If you guys approve this, you should resign or be fired,” she said, adding that she is so disgusted she plans to move out of California.
Denis Traficante from Santa Ysabel lives near the site where the Witch Creek Fire began. He told the CPUC that SDG&E sought to cover up evidence by “trying to quickly replace an old pole with a steel pole, but Cal Fire stopped them.” He then spoke on behalf of two neighbors who couldn’t testify—because they died in the Witch Creek Fire. He spoke about their lives, then gave photos of them to the panel.
One man spoke defiantly, “I will refuse to pay. All of us should do so and let SDG&E come after all of us.”
Richard Grossman, whose mobilehome park is still in mediation over damages from the Rice Fire, denounced the WEBA plan as “socialism for the rich and powerful, capitalism for the rest of us.” He said that “the plan should not go forward while victims remain uncompensated.”
A La Mesa woman who opposes smart meters noted that the CPUC is “loaded with commissioners who come straight out of the utility business” adding, “That’s what the public is complaining about—corruption.”
A woman who said she just lost her job broke down in tears at the podium. Another woman who said she is caregiver for a paralyzed quadriplegic veteran noted that California has many low-income disabled people living on less than $900 a month who would face increased hardship from the proposed fees.
A woman with Occupy San Diego said she wants to go off grid with solar so that she “won’t have to have anything to do with SDG&E” but that costs are prohibitive. She and others urged the CPUC to allow ratepayers to be paid if they generate excess solar.
A man who said he is a former SDG&E employee and a stockholder spoke AGAINST the utility plan. “The prospectus shows risk to investors,” he observed. “It says nothing about risk to ratepayers.”
A San Pasqual fire survivor said Guejito fire came with “no warning” and that her family survived by standing under a waterfall beside their pool, shivering in the cold.”Our neighbors couldn’t get to our pool,” she said of victims who perished in the blaze.
Jim Russell of Jamul summed up the sentiments of most in the room when he concluded, “It’s SDG&E’s responsibility to manage its infrastructure—not mine. Just say `no.’ No WEBA.”
What can be done?
For those who believe it is unjust to place a former SDG&E lawyer and a commission wined and dined on two continents by SDG&E in charge of the fate of ratepayers and fire survivors for the WEBA decision or anything else involving SDG&E, here are steps to take.
1. Use this form to e-mail Governor Jerry Brown and ask that Commissioner Simon and Administrative Law judge Bushey be removed and replaced with consumer advocates, not utility representatives. Tell the Governor it's wrong to charge ratepayers for fires caused by SDG&E and wrong for a former SDG&E lawyer to block fire victims legal depositions from being taken.
2. Ask California Attorney General Kamala Harris to investigate the cozy relationships between CPUC representatives and SDG&E to see if laws have been broken.
- Public Inquiry Unit
- Voice: (916) 322-3360 or
- (Toll-free in California)
- (800) 952-5225
- Fax: (916) 323-5341
3. Write to major media outlets and ask for coverage. Ask how is it that the fates of fire survivors and ratepayers can be in the hands of an ex-SDG&E lawyer who blocked SDG&E from having depositions taken a commissioner who reportedly had private meetings, trips and dinners with utility executives, paid for by SDG&E.
Editor's note: An earlier version of this article incorrectly stated that Bushey refused to allow fire victims' depositions to be taken; in fact it was SDG&E executive decisions that she reportedly blocked.
After publication, we received e-mails from two representatives at the Utility Consumers Action Network (UCAN), one praising our story and Aguirre's actions, the other criticizing Aguirre's statements.
Michael Shames, UCAN executive director, denied that "secret" negotiations took place and said that Bushey has been "consistently amongst the most pro-consumer ALMs at the CPUC." He further stated, "There's no done deal and SDG&E will lose."
Asked about Shames' comments, Aguirre told ECM on April 10, "That's not true. She's in bed with the utilities and so is he," referring to Bushey and Simon. "She wouldn't even let me prove up the case and cross-examine SDG&E witnesses." He insisted that SDG&E has held secret negotiations with the CPUC and said of Shames, "He's not involved in the case. He didn't even intervene."
Charles Langley, Public Advocate for UCAN, had an opposite view from Shames. Langley offered "kudos to East County Magazine" and called our story"excellent noting that we were the only media outlet to "cover what really happened. Everybody else folded up their cameras and notebooks and left before Aguirre spoke." He referred to Bushey's refusal to allow SDG&E executives to be deposed as a "betrayal of ratepayers" and said SDG&E executives are "afraid of being cross-examined." He noted that "Mr. Aguirre's point was that Judge Bushey has used her power and influence to protect them from being questioned about their complicity in the fires and the ongoing insurance scams."