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Wall Street absolutely loves the state’s Public Utilities Commission (PUC). That’s a major reason why backcountry folks may have to swallow San Diego Gas & Electric’s loony scheme to shut off those rural residents’ power during fire season. Michael Shames, head of Utility Consumers’ Action Network, says bluntly, “The PUC is owned and operated by the utilities.”

He is referring to the five commissioners. The PUC’s staff and administrative law judges are balanced and can be tough on utilities. But in all too many cases, they are overruled by the commissioners, whose mission is massaging utilities and maiming consumers.

On September 10, the commission meets to consider the implementation of SDG&E’s so-called Emergency Power Shut-Off Plan. The utility, a unit of Sempra Energy, proposes to turn off electricity to 57,000 backcountry customers and 125,000 residents during periods of high fire danger. That’s the total that would suffer. But during any given 12- to 72-hour period, 18,600 people would be affected, says SDG&E. The commission earlier issued a temporary restraining order preventing the utility from unilaterally implementing the plan prior to the September 10 meeting.

The idea is vigorously opposed by water districts, schools, disability rights advocates, and others. They point out that if a wildfire broke out in a powerless area, people might not get critical information because their phones, TVs, and computers wouldn’t work. If they learned of the fire by word of mouth, they might not be able to evacuate quickly because garage-door openers, street lights, traffic signals, and gas pumps wouldn’t function. People with disabilities could be trapped in their homes. The lives of people who depend on medical life-support equipment would be in jeopardy.

And how could firefighters battle the blaze if the electric water pumps that supply water to the area would not work? And wells that could supply water would also be worthless?

Those who would not be inconvenienced by the shut-off are all in favor of it. These include the San Diego fire chief and city council. (The county board of supervisors, however, thumbed down the idea.)

SDG&E tells backcountry citizens that they should have their own generators. But these are not rich people, in the main. The answer, say opponents, is for the utility to do what the law requires: design and maintain lines properly, particularly keeping trees away from them.

An administrative law judge for the utilities commission studied the shut-off plan and said it would pose excessive safety risks. He said it should be nixed. But any one of the five commissioners can write an alternative decision: Commissioner Timothy Simon, who is cozy with Sempra, did just that. He suggested that the plan could move forward on a test basis, with certain changes in place. On September 10, the commissioners can turn down the plan, adopt Simon’s approach, or come up with an alternative.

SDG&E’s concern is financial liability. After the October 2007 disaster, the PUC’s Consumer Protection and Safety Division looked into causes of the Guejito, Witch, and Rice fires. The division found that those three fires were linked to SDG&E power lines. In the Witch and Rice fires, SDG&E was in violation of state utility rules; Cox Communications was the major culprit in the Guejito Fire.

“The [Consumer Protection and Safety Division] believes that SDG&E’s unwillingness to provide immediate access to witnesses and evidence prevented [the division] from conducting a more timely investigation,” said the report.

Them’s strong words. SDG&E’s laxity in keeping trees away from power lines and its failure to correctly design and maintain its lines caused two of the fires; the utility’s uncooperativeness prevented a rapid investigation of all three fires. Nonetheless, “There has not been one mention of any kind of penalties” for the reprehensible behavior, says Shames. The key word for regulators is “imprudence.” It means that utilities have not spent ratepayer money properly and should get a monetary penalty. “The PUC is fond of tongue-lashings, but rarely does it spank utilities where utilities feel it — in their pocketbooks.” Regulators are mum on the word “imprudence.”

Eventually, SDG&E paid almost $700 million to insurance companies that had settled with fire victims and then sued SDG&E. Other suits against the utility are pending. Through its new plan, the company wants to be shielded from liability for damages caused by power shut-offs, points out Shames, noting that once the company reaches its insurance liability limit, it will want to raise consumers’ rates to pay for that liability.

Shames worries that the September 10 decision will be “Sunrise redux” — or a rerun of the Sunrise Powerlink decision. This proposed 123-mile transmission line through environmentally sensitive backcountry areas was opposed by two administrative law judges and the PUC commission staff. But the commission voted to let it go through. SDG&E can rake in $1.4 billion in guaranteed profit if federal authorities approve the project, says Shames. The commission bought the argument that it would stimulate renewable power development but then didn’t make sure that the line imported renewable power. The Utility Consumers’ Action Network has appealed the commission’s Sunrise decision.

On September 10, PUC commissioners may stand where Wall Street stands: for more Sempra profits and less consumer protection. Mark Barnett of Morningstar, the stock analyst firm, gushes that Sempra is aided by “the best regulation in the country.” Just a few years ago, Sempra’s major focus was on nonregulated businesses, such as energy trading. But now that regulation is so favorable, the company is emphasizing the regulated gas and electric businesses. “The California Public Utilities Commission is considerably more friendly than it has been in the past,” enthuses Barnett, and the same is true of federal regulators who oversee transmission projects.

Standard & Poor’s points out that in July of last year, the PUC approved almost $200 million of total rate increases for Sempra’s two main operations, SDG&E and SoCalGas, providing for rate jumps of 3 percent a year for both entities through 2011.

Gary F. Hovis of Argus Research says that Sempra’s “overall excellent experience with regulators should go a long way in preventing a precipitous falloff in profitability. We view the regulatory commissions at both the state and federal levels as fair and balanced.”

That’s fair and balanced for investors. Not consumers.

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Comments

Twister Sept. 2, 2009 @ 4:45 p.m.

Everybody needs to flood the Reader with comments to emphasize how much we, the Great Unwashed, appreciate Bauder's TNP approach to the GDL's that have us where the hair is short.

Keep it up, Don!

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PistolPete Sept. 2, 2009 @ 4:55 p.m.

An ounce of prevention is worth more than a pound of cure. I think shutting off the power is a great idea. Human beings shouldn't live out here. If they do,they take the risk. People with medical equipment could just as easily lose their power in an earthquake or flood. If your life hangs so precariously on the balance that you need power,MOVE! GET A GENERATOR! SDG&E WAS at fault for not keeping their poles trimmed but how many people living in the backcountry have brush ALL over their property? Instead of being reactive,why don't East County residents become proactive?

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Twister Sept. 2, 2009 @ 7 p.m.

No U CAN't! When professionals with special knowledge try to help UCAN for nothing, they are ignored. Sure, there are cranks out there who think they know it all, but rejecting assistance out-of-hand simply because the proffered help doesn't align with the paradigm du jour at UCAN, is not intellectual engagement.

All in all, UCAN seems to be a well-motivated outfit, unlike a lot of do-gooder organizations, so I guess I'll reconsider my withdrawal of funds, but I think they seriously err when spit in the eye of all those who offer volunteer assistance. If this isn't Shames' policy, he should be aware that one of his lieutenants who "interfaces" with "the public" needs a lesson in interaction.

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Don Bauder Sept. 2, 2009 @ 11:30 p.m.

Response to post #1: I intend to raise hell until the day I go there. (I'm 73.) Best, Don Bauder

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Don Bauder Sept. 2, 2009 @ 11:32 p.m.

Response to post #2: You and SDGE telling people they should have a generator, or not live in the backcountry, is like Marie Antoinette's comment about the peasants: "Let them eat cake." (Incidentally, she didn't really say that, apparently, and the cake she alluded to was more like gruel.) Best, Don Bauder

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Don Bauder Sept. 2, 2009 @ 11:34 p.m.

Response to post #3: I've never heard that about UCAN but it should know about your complaint. Best, Don Bauder

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PistolPete Sept. 3, 2009 @ 10:09 a.m.

I'm certainly not going to say that it's just Sandy Eggans that do this because no matter where you go,you'll find stupid people. With that said,if you live out in the back country,YOU take the risks. IU'm also not going to say it's unfair to pay taxes to support fire and police from resuing people out there but with that said,those people that do choose to live out there need to do more to protect themselves. If I choose to live in an abandoned coal mine against the warnings of my rescuers,should something happen,am I at all liable? Of course I am. Common sense. People that live way out in the middle of bumblef*** should prepare themselves for the inevitable and shouldn't bitch when the other 90% of the people around them don't want to lose their houses to their irresponsibility. The wildfires of '07 COULD have been contained almost immediately had those people out in Ramona and Julien been better prepared AND SDG&E been more responsible. So your power gets shut off to prevent a catastrophe? So what? Don't like it? Move. It's all very simple. What happened to the days in life that people didn't bitch so much about simple things?

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Don Bauder Sept. 3, 2009 @ 8:32 p.m.

Response to post #7: Disagree. SDG&E is a regulated utility. It is guaranteed a certain level of profits. In return, it must serve its entire area -- no matter where the people live. The blame lies with SDG&E. It is its duty to keep trees away from those power lines. It hasn't done so, and has justifiably been hit with penalties. Best, Don Bauder

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Visduh Sept. 5, 2009 @ 12:38 p.m.

Now SDG&E wants a rate increase to offset its higher cost of liability insurance (due to the fire settlements) and a promise from the PUC that it will be able to recover any uninsured losses due to fires in the future. A Ramona critic points out that this shifts all the risk to the ratepayers from the stockholders, yet allows the stockholders to reap all the benefits. He called it "socialization of the risk and privatization of the benefits."

That is, why should SDG&E make any efforts to keep its power lines from becoming fire ignition points if it can buy its way out of the risk at ratepayer expense? There's no incentive to do that if this rate plan is accepted. Then why do they want to have this shutdown system? It is probably to convince the insurers that they are doing SOMETHING to mitigate the risk, so that they can buy insurance. Without that, the insurers might refuse to write coverage at all.

This points out why liability insurance was not accepted for a long time. Critics said that it encouraged reckless behavior. They claimed that allowing anyone to buy his/her way out of ultimate liability through insurance would lead to them failing to prevent damage that could have been avoided through preventive measures. Social policy now favors liability insurance because it pays off and mitigates damage and injury. (Think of a world with no auto insurance and claims against wrongdoers that would never be collected.)

But in this case, the SDG&E stockholders get a walk, while the ratepayers pick up the tab for SDG&E negligence. SDG&E's claim that liability insurance is now just another cost of doing business begs the question of these catastrophic fires. Everyday liabilities, such as traffic accidents, are a usual cost, but massive liabilities caused by neglect and a drive to maximize short-term profit are not. The stockholders need to be on the hook for big losses, too.

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Don Bauder Sept. 5, 2009 @ 1:24 p.m.

Response to post #9: Your analysis is on target and so is your history. SDG&E wants this scheme so it won't be hit by liability. And you are right: long ago, insurance was considered immoral because supposedly it shielded people from risk, and encouraged lax behavior. This is similar to the concept of moral hazard, today's international bugaboo. Best, Don Bauder

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Alain Sept. 9, 2009 @ 10:36 a.m.

Don, et.al,

My post here is directed to people who are convinced that they have "no skin in the game." If this is YOUR thinking, you are deluding yourself and it just might cost you your home, belongings and possibly your very life.

Any fire that starts in the "outback" will threaten the whole of the North County. Look at the L.A. "Station" fire, if you need proof! Everyone in San Diego County is in jeopardy! This is not a local fight. Fire is no respecter of borders or property lines.

My next point is that someone sent me an article regarding a recent brush fire that started in Hemet and moved towards Idylwild. Fire investigators found small bits of ceramic power line insulators and bits of metal strewn about.

Did you know that there are "explosive charges" at the top of power poles?? They are designed to save the power line circuits from overloading and destroying the circuit. When the circuit breaker trips, these "explosive charges" ignite to blow the wires from the circuit, to "short circuit" the line.

Now, I submit to you a question: is it not possible that one of these "explosive charges" could have gone off prematurely or malfunctioned in Hemet, starting the fire? What else could have blown those insulators and metal parts to smithereens?? Surely, not a drop of 50' from the top of a power pole...

Another point. Early on, most of the "news media" were under the delusion that this whole protest against SDG&E was about preventing SDG&E from "pulling the plug" on the folks in the above mentioned towns. This was INCORRECT! SDG&E already has the authority to pull the plug. They did so earlier this month up here...three times. SDG&E needs to PUC ruling for this.

However, what they do need is a "rule modification" which gives them "tort immunity" from doing so. This means that they can pull the plug and be free from lawsuits!! Great strategy.

So, in a nutshell, SDG&E pulls the plug when certain weather criteria are met. We sit in the dark for 24 hours or longer. A small fire starts and begins to gain momentum. Firefighters arrive only to find that there is no water in the fire hydrants to draw from.

Yes, firefighters have 1,000 gallons on board, but how long is that going to last on a 1/4 acre fire in a 50 MPH wind?? Small fires don't stay small in 50 MPH winds.

The handwriting is on the wall, folks.

In all probability, SDG&E is going to get their "tort immunity". Many people in the county are going to pay for this insanity...with more than their checkbook. Little wonder that the P.U.C. is called, "the largest rubber stamp in California."

No one person, no entity or corporate structure should ever be given full immunity from anything they do. No one, not no way, not no how.

Not Richard Nixon, not Union Carbide, not Exxon and not SDG&E. Everyone needs to be held accountable for their actions, no matter how "altruistic" or well meaning their intentions.

Alain Michel...Valley Center/Pauma Valley

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Don Bauder Sept. 9, 2009 @ 9:21 p.m.

Response to post #11: You make excellent points. SDG&E wants protection from liability. It stinks. We'll find out soon if the company gets it from the friendly PUC. Best, Don Bauder

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Kris Sept. 10, 2009 @ 8:11 a.m.

Hi Don. Seems like they're taking the "love" thing a little literally now: http://www.eastcountymagazine.org/?q=node/1867 Kristin Kj.

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Don Bauder Sept. 10, 2009 @ 2:44 p.m.

Response to post #13: Yes, Kris, this is posted on my blog. Best, Don Bauder

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Alain Sept. 10, 2009 @ 10:09 p.m.

All,

For your edification and perusal...

SAN DIEGO--California regulators have rejected a San Diego utility's plan to cut power to homes when weather is ripe for major wildfires. The California Public Utilities Commission voted Thursday in San Francisco on a proposal from San Diego Gas & Electric Co. to cut power to 60,000 homes and businesses in dry, windy weather before fires hit.

The utility's power lines have been blamed for causing devastating wildfires two years ago. It claims those fires probably wouldn't have happened if the shutoff plan were in effect.

Critics note that a number of systems would fail immediately or within hours: life-critical medical devices, water pumps, phones, televisions, garage door openers, traffic lights.

http://www.mercurynews.com/news/ci_13305860

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Don Bauder Sept. 11, 2009 @ 9:29 a.m.

Response to post #15: Yes, but as posted on my blog, the PUC is giving SDG&E the opportunity to come back with a new plan. Unfortunately, this is not the final word. Best, Don Bauder

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