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Dear Customers: $25 Million Uninsured Wildfire Billing by SDG&E
Possible WEBA Billing Implications for IOU Power Customers?
Onell Soto reports that San Diego Gas & Electric Company (SDG&E) and the ratepayers advocacy division have reached an agreement regarding $25 million to be billed to customers for SDG&E wildfire-incurred equipment damage. The damage was incurred by wildfires about which parties "agreed to disagree on whether SDG&E's role in starting the fires should mean that its shareholders, rather than customers, should have to pay for fire damage."
California's Public Utilities Commission (CPUC) has yet to report the agreement allegedly reached yesterday. Under commission rules, CPUC will most likely receive the tentative agreement as formally filed sometime next week. After filing, the agreement must be approved by the assigned commissioner, typically assisted by an administrative law judge.
The agreement reached between Senpra Energy's utility and CPUC's Division of Ratepayer Advocates (CPUC DRA) assigns nearly $7 mission of the damages to stockholders, as already-existing liabilities for 2007 exceed the $1.1 billion in wildfire insurance purchased by SDG&E for 2007. Total SDG&E expenditures for 2007 wildfire-related repairs are report by SDG&E to be about $112 million.
No estimate was provided of the cost of putting power lines underground or otherwise preventing "three of the big fires [that] were caused by shoddy maintenance on SDG&E power lines." During testimony to CPUC in 2009, the manager of SDG&E's Vegetation Management Program stated that SDG&E VMP failed to cut back growth from a specific tree, as requested by a "pre-inspector" to the VMP automated system, because the VMP manager failed to receive a written memo. The tree was the ignition point of one of the 2007 wildfires (see DIRECT TESTIMONY OF DON AKAU... below). Another part of the 2007 wildfire complex was apparently caused by overhead wires and a detonating power transformer (see DIRECT TESTIMONY OF GERRY AKIN... below).
"No on Prop. 16" WEBA Fallout?
SDG&E and the other California investor owned utilities (IOUs) continue to pursue Wildfire Expense Balancing Account (WEBA) customer billing authority for future wildfires (see Application... below). Collecting those uninsured utility wildfire expenses from customers may be more difficult due to the failure of PG&E's Proposition 16 constitutional amendment at the ballot box earlier this month.
Under Proposition 16, San Diego voters would have lost simple-majority election rights under the 1970 city electricity franchise. Proposition 16's proposed constitutional amendment standard would have instead required a two-thirds majority to permit municipal power options such as community choice aggregation (CCA). All IOUs and PG&E specifically have already been warned by CPUC not to engage in false advertising to fight CCA availability in their respective service areas.
CPUC DRA opposes the WEBA authority application on the ground that it is an unlimited customer liability for negligence and possible regulatory violations by IOUs under their current state power industry practices (see PROTEST OF THE DIVISION OF RATEPAYER ADVOCATES... below). Wildfire insurers have raised prices and reduced available coverage to the California IOUs after the 2007 utility-caused wildfires or have left that insurance market altogether.
Application of San Diego Gas & Electric Company (U 902-M), Southern California Edison Company (U 338-E), Southern California Gas Company (U 904-G) and Pacific Gas and Electric Company (U 39-M) for Authority to Establish a Wildfire Expense Balancing Account [WEBA] to Record for Future Recovery Wildfire-Related Costs
More like this:
- Erroneous SDG&E/IOU WEBA Assumption – Part I — Oct. 13, 2010
- Revised WEBA Application by SDG&E Not Yet Available — July 14, 2010
- SDG&E Wildfire Billings (WEBA) Update — April 8, 2010
- CPUC to Rule on SDG&E WEBA Application — Feb. 12, 2010
- SDG&E Computer Model Failed to Predict 2007 Rice Wildfire — Dec. 12, 2009