The Wildfire Expense Balancing Account (WEBA) application by SDG&E, PG&E and SCE will proceed to a meet-&-confer for all parties at a "mutually convenient date in April" according to a recent SCE update filed with the California Public Utilities Commission (CPUC).

The investor owned utilities (IOUs) are seeking to pass all wildfire legal and other expenses to customers because insurers are no longer willing to cover the catastrophic wildfire damage caused by utility equipment. The utilities argue that even if utility employees are negligent, wildfires are the reasonable result of power transmission by overhead power lines, and that even if wildfires are not caused by the utilities, the dangerous consequences of utility operations are an ordinary cost of doing business, so that CPUC must order the creation of the WEBA accounts. The IOUs flatly state that CPUC has a constitutional duty to permit the IOUs to bill consumers for all uninsured wildfire legal and other costs.

CPUC's Division of Ratepayer Advocates opposes the WEBA application because there is no cap on the amount that consumers must pay to cover IOU uninsured wildfire liabilities. Before 2007, IOUs were able to obtain billions in insurance, but the catastrophic damage from the 2007 wildfire season forced insurers to avoid offering full coverage or leave the market altogether.

Later testimony by SDG&E employees at the request of CPUC's consumer protection branch only highlighted the inherent danger of inadequate inspection and monitoring programs that failed to anticipate the wildfire events. SDG&E's Don Akau testified that his Vegetation Management Program failed to pass along information from a contract "pre-inspector" regarding the same tree that apparently was the cause of one 2007 wildfire.

If approved by CPUC, current IOU WEBA balances from recent wildfires not otherwise covered by corporate utility insurers will be paid off by consumers for years to come. Future uninsured wildfire legal expenses will increase customers' liability for continued payment until WEBA is zeroed out.

One of the applicant IOUs, PG&E, is seeking to amend the California Constitution to prevent competition by cities wanting to create their own municipal power utilities (http://www.mercurynews.com/opinion/ci_14719397).


Filing Name: Application of San Diego Gas & Electric Company (U902M), Southern California Edison Company (U338E), Southern California Gas Company (U904G) and Pacific Gas and Electric Company (U39M) for Authority to Establish a Wildfire Expense Balancing Account to Record for Future Recovery Wildfire-Related Costs.

CPUC Number: A.09-08-020

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