Bart Mendoza 5 a.m., Dec. 8
CPUC: SDG&E Z-Factor Wildfire Insurance Problem Solved At $29 Million
Onell Soto reports this morning that California's Public Utilities Commission approved SDG&E's A0908019 Z-Factor request for a $29 million rate hike to cover its increased wildfire insurance needs.
The SDG&E request was initially designated as "Z-Factor" on SDG&E's claim that it was surprised by insurers demanding higher payments after the 2007 wildfire season that resulted in the largest mass evacuation in San Diego County history. Earlier a CPUC administrative law judge had ruled against the rate increase based on evidence presented in scheduled open hearings, but SDG&E got the assigned commissioner to split the decision and approve the increase based on a private meeting after the end of hearings and final statements.
CPUC made its full-commission approval this week on determining that SDG&E had no control over the rate increases, despite testimony to CPUC investigators in 2009 that led to findings of overhead power equipment as causes in the Rice and Witch Creek fires. The investigations were halted when SDG&E agreed to a $14 milion settlement in early 2010 shortly after former San Diego City Attorney Michael Aguirre intervened as a protester's representative in several SDG&E wildfire matters being heard by CPUC.
The CPUC action sets up a potential double or triple-billing situation for consumers over the same claimed utility expenses if CPUC also approves the A0908020 Wildfire Expense Balancing Account (WEBA) application along with affirming SDG&E's A1012005 general rate case application where SDG&E previously claimed that the seven percent rate hike was justified by wildfire legal and other related expenses.