Update April 4, 2012: the state Public Utilities Commission will hold a hearing in San Diego on this matter on April 5, 2012.
San Diego Gas & Electric customers could ultimately be asked to pay for “excess costs” incurred by the utility as a result of the 2007 wildfires, if a proposal before state regulators is approved.
The company’s poor equipment maintenance was found by the state to have caused the massive Witch Creek, Guejito and Rice Canyon fires, which together took the lives of two civilians, destroyed more than 1,300 homes, scorched more than 200,000 acres and injured at least 40 firefighters.
Firefighting agencies spent $18 million extinguishing the Witch Creek Fire alone. SDG&E settled with state regulators for $14.8 million . It also paid at least $920 million to insurance companies who had paid out to property owners. Its insurance did not cover all of the costs incurred.
SDG&E has had a proposal before the California Public Utilities Commission (CPUC) since 2009, requesting the establishment of a Wildfire Expense Balancing Account to record their costs. Once the account is established, it would pave the way for SDG&E to bill customers for uninsured costs incurred after the 2007 fires, as well as for future fire-related expenses. The expenses could go as high as $463.9 million or more, according to a Ramona group fighting the plan. Mussey Grade Road Alliance also states that the expenses include SDG&E’s legal costs.
“These types of accounts are common,” Stephanie Donovan, SDG&E spokeswoman, told Patch this week. She said the idea is that if a utility collects more money than is needed, it gives it back to ratepayers, and if it doesn’t collect enough to cover costs, it passes those costs along to customers.
The Alliance is fighting SDG&E’s efforts to place the burden back on property owners—some of whom lost everything they owned in the fires. Spokeswoman Diane Conklin said they have been asking the CPUC since September 2010 for a Public Participation Hearing in San Diego so property owners can give their input. The CPUC has not yet ruled on the matter, spokesperson Terrie Prosper confirmed.
Conklin said the Alliance just found out this month that SDG&E intends to seek reimbursement for the Witch Creek Fire costs that were uninsured. Until then, she said, it had been her understanding that the utility would only seek to be reimbursed for future fires.
But Donovan told Patch that SDG&E’s intent was clear all along in its filings with the CPUC.
The Alliance has asked for a public hearing to be held in February or March. SDG&E opposes the idea. Donovan said that, at this stage, the utility is simply asking to establish an account to record costs.
“This is not the appropriate time to have a Public Participation Hearing,” she said. “It would confuse the matter. If the commission approves the account, we’d have to file more documents. Let’s not put the cart before the horse. Any costs wouldn’t be passed along to customers for a couple of years hence, if at all.”
In SDG&E’s response to the Alliance request, it states that the utility is “not seeking to recover any wildfire costs in rates in this proceeding. Rather, we are asking the Commission to adopt a wildfire cost recovery mechanism that would facilitate the potential recovery of wildfire costs in a future Commission application proceeding.”
SDG&E states that it would not oppose such a Public Participation Hearing when and if it makes a future application to charge ratepayers for “excess costs” from the 2007 fires.
However, Conklin told Patch, “This is like SDG&E saying that, ‘We are constructing a guillotine, but you don’t need to have any public comments now. Wait until the blade is against your neck and then let’s have a public hearing.’ ”
According to the Alliance motion, SDG&E plans to seek at least $463.9 million from ratepayers for the fires. It also states that SDG&E has told its shareholders that it considers recovery of excess 2007 wildfire costs “a probable outcome.” The motion notes that public participation in this matter is “urgent and crucial,” and that it would be “unfair” not to allow “ordinary people” to weigh in on costs they may have to bear.
Conklin told Patch, “We also have to remember that this $463.9 million could be only the beginning if this scheme is approved. This application is for uninsured wildfire costs of SDG&E into the future. We would be on the hook for the rest of our lives for fires they ignite. Meanwhile, what about our safety?”
Donovan summed up the utility’s position, “Should we be allowed to recover costs? Yes. Is it frustrating? Yes. We understand that. We are ultimately liable for damage caused by our equipment whether it is our fault or not. We should have the opportunity to recoup costs where the utility is not at fault.”
SDG&E never accepted responsibility for causing the 2007 wildfires, and in the settlement approved by the CPUC, it admitted blocking the investigations into the causes.
Three other utilities initially filed the joint application with SDG&E for the balancing account in August 2009. The others were Pacific Gas & Electric, Southern California Edison and Southern California Gas Co. They have since pulled out.
“They pulled out because it was taking too much time and PG&E had a lot of other issues on their plate,” Donovan said. “We hoped it would move more quickly.”
Conklin said of the other utilities, “They pulled out because it was a non-starter.”
The next regularly scheduled business meeting of the CPUC is Feb. 1. Conklin is encouraging SDG&E customers to contact the CPUC by Jan. 31 to ask for a Public Participation Hearing in San Diego County.
At some point after that, the CPUC is expected to rule on the Public Participation Hearing motion, spokesperson Terrie Prosper told Patch. The public can register their opinion about a public hearing by contacting the CPUC Public Adviser at:
Telephone: 866-849-8391 or 213-576-7055
Postal Service: CPUC Public Adviser, 320 West 4th Street Suite 500, Los Angeles, CA 90013.
Alternatively, Conklin said, the public can contact anyone at the CPUC about the subject.
Proceedings regarding the balancing account are due to begin after March 9.