SDG&E REQUEST TO RECOVER LEGAL COSTS FROM 2007 WILDFIRES CAN MOVE FORWARD, CPUC JUDGE RULES

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East County News Service

August 20, 2016 (San Diego) — Administrative Law Judge Jeanne McKinney at the California Public Utilities Commission issued a ruling on August 11th that denies a request by ratepayer advocacy and consumer groups.

The groups had sought dismissal of San Diego Gas and Electric Company’s application to recover settlement costs and legal fees for claims arising from the 2007 Witch, Guejito and Rice Fires. Those costs were tracked through a Wildfire Expense Memorandum Account (WEMA).

San Diego Consumers Action Network, The Utility Reform Network, Consumers’ Action Network, Protect Our Communities Foundation, Office of Ratepayer Advocates and Mussey Grade Road Alliance all filed protests against SDG&E’s application. Ruth Hendrick was also later granted party status.

These intervening parties earlier had a request approved to provide briefs on threshold issues regarding appropriateness of the rate recovery sought before hearings occurred. Those issues include whether rater recovery would create a ”moral hazard,” fairness of imposing rate hikes on San Diego customers—especially fire victims, and whether SDG&E had already been compensated for such risks in its rates and should warrant special recovery.

In Phase One of this proceeding, the CPUC had to determine if early dismissal was warranted due to any of these threshold issues, and whether SDG&E showed prudence in its operation, engineering and management of facilities alleged to be involved in the fires’ ignition. Phase 2 would determine if SDG&E’s actions in settling legal claims and costs were reasonable.

Intervenors argued that SDG&E’s proposed cost recovery through WEMA would be a “windfall at the ratepayers’ expense” and that “Basic fairness principles” required dismissal.

But the PUC administrative law judge denied intervenors’ requests. Since the PUC previously authorized SDG&E to recover reasonable cots tracked in WEMA, this does not amount to a windfall, the judge reasoned.  As for arguments of fairness to residents and small businesses that suffered damages in the 2007 fires, the PUC judge refused to support dismissal prior to development of an evidentiary record.

Thus SDG&E’s application will continue to move forward to allow development of an evidentiary record, which may include written testimony and hearings before any decision is made on the SDG&E application.


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