CA LEGISLATORS TO INTRODUCE BILL TO BLOCK ELECTRIC UTILITIES FOUND AT FAULT FOR WILDFIRES FROM MAKING CUSTOMERS PAY

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Senator also sends CPUC letter voicing concern over delays in voting on a staff proposal to deny SDG&E’s request to charge ratepayers for 2007 fire losses

East County News Service

November 23, 2017 (Sacramento) – State Senator Jerry Hill, joined by Senators Mike McGuire and Scott Wiener and Assemblymembers Marc Levine and Jim Wood, have announced that they will introduce legislation in January to prevent electric utilities found culpable in wildfires from passing the costs for claims not covered by insurance as well as fines or penalties onto customers.

“This practice is an outrage,” said Senator Hill, D-San Mateo and Santa Clara Counties. “Victims of devastating fires and other customers should not be forced to pay for the mistakes made by utilities. It’s time to stop allowing utilities to push the burden of their negligence onto the backs of customers.”

Senator McGuire, D-North Coast/North Bay, whose district includes communities ravaged by the wildfires this month, said: “Thousands of North Bay residents have lost their homes and businesses and many escaped these devastating fires with nothing but the clothes on their backs and their family's safety. While there is an active fire investigation taking place, there is absolutely no way residents who are suffering from this massive tragedy should ever pay for a corporation's potential negligence.”

The legislation is prompted by utilities’ ongoing efforts to recover costs in wildfires not covered by insurance by passing them along to ratepayers.

For example, San Diego Gas and Electric Company wants to recover $379 million in costs from the 2007 Witch, Guejito and Rice fires. The utility’s powerlines and overhead equipment were blamed by Cal Fire for the three fires that caused two deaths, burned 200,000 acres and destroyed more than 1,300 homes.  SDG&E has denied fault, claiming extreme weather conditions, not problems with their equipment was at fault. The company has paid out damages in claims cases covered by its insurance. The company now seeks reimbursement for its uninsured losses.

Two administrative law judges rejected the San Diego utility’s bid to recover costs in August, but their proposed decision is subject to the approval of the California Public Utilities Commission. SDG&E wants the commission to reject the decision, so do utility giants Pacific Gas & Electric Company and Southern California Edison Company, according to papers filed in the case. PG&E said in a document it filed that the proposed decision puts utilities in “an untenable situation.”

Separately, PG&E is laying the groundwork for an application to recover costs in the 2015 Butte fire, which was caused by PG&E powerlines and killed two people, burned more than 70,000 acres and destroyed 921 structures. The first step is to obtain permission from the CPUC to track costs associated with the fire. PG&E’s application to do so is pending with the CPUC. PG&E told the Securities and Exchange Commission in July that if the application is approved and if claims exceed its liability coverage, it expects to seek CPUC authorization “to recover any excess amounts from customers.”

The cause of the North Bay wildfires is still under investigation. In a document alerting the SEC to the fires, PG&E said: “It currently is unknown whether the Utility would have any liability associated with these fires. The Utility has approximately $800 million in liability insurance for potential losses that may result from these fires.”

Senator Hill, in an October 30th press release, said the bill that will be introduced January 3 when the Legislature reconvenes will also prevent electric companies from passing the costs of fines and penalties leveled against them for causing wildfires along to customers.

Gas companies are already prevented from shifting the burden of fines and penalties onto customers as a result of legislation he introduced after the San Bruno disaster that was caused by the rupture of a PG&E gas pipeline in 2010. The legislation, Assembly Bill 56, was approved by the governor in 2011.

In a letter sent November 15 to the CPUC president and commissioners, Senator Hill voiced concerns over multiple delays by the CPUC to uphold its administrative law judges’ decision barring SDG&E from charging ratepayers for its uninsured losses from the 2007 firestorm.  He noted that ex parte meetings were held with utility representatives during that time. 

“Allowing utilities to collect losses incurred from unreasonable behavior disincentivizes them from prioritizing safety,” Hill’s letter concluded.