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CPUC Division of Ratepayer Advocates Queries SDG&E in Secret on Gas Holder Legal Expenses

In mid-2009, San Diego Gas and Electric Company (SDG&E) provided secret responses to the Division of Ratepayer Advocates of the California Public Utilities Commission (DRA CPUC). DRA wanted to know if SDG&E was attempting to pass costs through to consumers related to the United States of America v. SDG&E criminal trial.

Previously, Michael Shames of the Utility Consumers Action Network (UCAN) said that CPUC would not allow SDG&E to obtain a ruling to pass those costs through to rate-paying customers.

All SDG&E responses were removed from the document before posting as found at http://www.sdge.com/regulatory/documents/a-06-12-009/response/DRA-SDGE-207-DFB_C_final.pdf.

Among the questions which were responded to in secret:

"According to the Office of the US Attorney for the Southern District of California, in January 2006, SDG&E and three individuals were indicted with one count of conspiracy to unlawfully remove asbestos, three counts of unlawful removal of asbestos, and one count of making false statements. These charges related to the alleged illegal removal of asbestos from 9.23 miles of underground piping at the former Encanto Gas Holder Facility in Lemon Grove in 2000-2001.

"According to news reports, a jury found SDG&E guilty of three counts of improperly removing asbestos and also found a project manager for the utility’s contractor as well as an SDG&E employee guilty of one count each of violating asbestos work-practice standards.

"1. When did SDG&E/ Sempra first begin incurring legal costs in connection with this criminal case?

"2. Where are the litigation expenses for this case recorded and/ or tracked?

"3. What other costs has SDG&E/ Sempra incurred in connection with this case?

"4. If other costs have been incurred in connection with this criminal case, where are these other costs tracked and/ or recorded?

"5. Were any costs incurred in connection with this case included in any way in any of the forecasts for this GRC?

"6. How can that be verified from the testimony/ workpapers provided with this Application?

"7. If SDG&E/ Sempra appeals some or all of the criminal convictions, how can the Commission determine that no costs incurred in connection with the convictions are included in any future forecasts?

"8. SDG&E/Sempra’s 2006 recorded Outside Legal direct allocations were $12.313 million. Please provide a detailed breakdown of these costs, including the vendor, dollar amount, and case that the legal services were for.

"9. In addition, SDG&E/Sempra has forecasted $9.704 million in Outside Legal direct allocations for 2008 (see MPH WP 284). Please provide a detailed breakdown as to how Corporate Center determined this $9.704 million, including which cases the direct allocation costs are for."

Responses were prepared for SDG&E by Hannah Devine, but a non-disclosure agreement in this CPUC general rate case allowed SDG&E to withhold Devine's responses from the public.

Without disclosure to the public, it remains to be seen if SDG&E has been forthcoming with all information to assure CPUC that US v. SDG&E or other related legal costs regarding the gas holder site are not being passed on to consumers.

SDG&E was recently cited by CPUC for withholding vital application information regarding the Sunrise PowerLink proposal, resulting in a $1 million fine for false statements paid by SDG&E's liability insurance carrier. CPUC later fined SDG&E $17 million for investigatory obstruction regarding the 2007 county wildfires.

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In mid-2009, San Diego Gas and Electric Company (SDG&E) provided secret responses to the Division of Ratepayer Advocates of the California Public Utilities Commission (DRA CPUC). DRA wanted to know if SDG&E was attempting to pass costs through to consumers related to the United States of America v. SDG&E criminal trial.

Previously, Michael Shames of the Utility Consumers Action Network (UCAN) said that CPUC would not allow SDG&E to obtain a ruling to pass those costs through to rate-paying customers.

All SDG&E responses were removed from the document before posting as found at http://www.sdge.com/regulatory/documents/a-06-12-009/response/DRA-SDGE-207-DFB_C_final.pdf.

Among the questions which were responded to in secret:

"According to the Office of the US Attorney for the Southern District of California, in January 2006, SDG&E and three individuals were indicted with one count of conspiracy to unlawfully remove asbestos, three counts of unlawful removal of asbestos, and one count of making false statements. These charges related to the alleged illegal removal of asbestos from 9.23 miles of underground piping at the former Encanto Gas Holder Facility in Lemon Grove in 2000-2001.

"According to news reports, a jury found SDG&E guilty of three counts of improperly removing asbestos and also found a project manager for the utility’s contractor as well as an SDG&E employee guilty of one count each of violating asbestos work-practice standards.

"1. When did SDG&E/ Sempra first begin incurring legal costs in connection with this criminal case?

"2. Where are the litigation expenses for this case recorded and/ or tracked?

"3. What other costs has SDG&E/ Sempra incurred in connection with this case?

"4. If other costs have been incurred in connection with this criminal case, where are these other costs tracked and/ or recorded?

"5. Were any costs incurred in connection with this case included in any way in any of the forecasts for this GRC?

"6. How can that be verified from the testimony/ workpapers provided with this Application?

"7. If SDG&E/ Sempra appeals some or all of the criminal convictions, how can the Commission determine that no costs incurred in connection with the convictions are included in any future forecasts?

"8. SDG&E/Sempra’s 2006 recorded Outside Legal direct allocations were $12.313 million. Please provide a detailed breakdown of these costs, including the vendor, dollar amount, and case that the legal services were for.

"9. In addition, SDG&E/Sempra has forecasted $9.704 million in Outside Legal direct allocations for 2008 (see MPH WP 284). Please provide a detailed breakdown as to how Corporate Center determined this $9.704 million, including which cases the direct allocation costs are for."

Responses were prepared for SDG&E by Hannah Devine, but a non-disclosure agreement in this CPUC general rate case allowed SDG&E to withhold Devine's responses from the public.

Without disclosure to the public, it remains to be seen if SDG&E has been forthcoming with all information to assure CPUC that US v. SDG&E or other related legal costs regarding the gas holder site are not being passed on to consumers.

SDG&E was recently cited by CPUC for withholding vital application information regarding the Sunrise PowerLink proposal, resulting in a $1 million fine for false statements paid by SDG&E's liability insurance carrier. CPUC later fined SDG&E $17 million for investigatory obstruction regarding the 2007 county wildfires.

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