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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.

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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.

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Comments
15

RE: "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."

This is exactly why we need a NEW CPUC Board ASAP, with the majority selected from the voter rolls like jurors because now the FIX is in... + Have them operate under the Brown Act, which will limit these behind closed door deals...

Dec. 18, 2010

There may not be any application of the Brown Act for legislative bodies to CPUC hearings as long as they are categorized only as "ratesetting", something that happens early in the proceeding process. That's probably less a function of poor Brown Act wording than it is all about CPUC's authority to set its own hearing rules of practice and procedure per Public Utilities Code statutes.

On the other hand, a brand new CPUC slate of commissioners complete with a five-year ban on hiring by utilities after being a commissioner would help a lot!

Dec. 18, 2010

How can we get that started ASAP? Petition or what?

Dec. 18, 2010

It may be possible to initiate a CPUC rulemaking proceeding by writing a request for such a policy, where after a time CPUC must start the proceeding, come up with a better policy on its own, or provide reasons why it denies the request.

To respond more thoroughly, I'll need some time to look at the Public Utilities Code and CPUC's rules of practice this weekend...

The most expensive option is a constitutional ballot initiative. PG&E tried that earlier in the 2010 primary and lost Proposition 16 at a cost of roughly $30 million in shareholder equity (which is to say it actually came from PG&E ratepayer billings in and around San Francisco). A winning non-constiutional ballot initiative would cost less to gather fewer signatures to qualify but would be challenged by IOU attorneys until the end of time on public utility constitutional grounds.

This may be worth starting a Facebook group page... if one of those could get Betty White to host SNL, who knows what can happen?

Dec. 18, 2010

a2z, if ur talkin about initiating a CPUC rulemaking proceeding to try and get a change in the way they are picked, I don't kknow if that would fly. The rules of practice seem to say pretty clearly that anybody can petition the Commission but "proposed regulation must apply to an entire class of entities or activities over which the Commission has jurisdiction". Since the commission has nothing to do with their own selection, I don't think it would apply, probably the same with "post commision" hirings, too.

Dec. 18, 2010

I would think that arguing post commission hiring by the power industry would qualify as applying to the entire class of power utilities over which CPUC has jurisdiction, but I am more certain that the utilities would throw up all kinds of arguments that interpretation.

It would be interesting to see how many commissioners have been hired by, say, Greyhound or Yellow Cab since the Railroad Commission became CPUC.

Dec. 18, 2010

make that "arguments AGAINST that interpretation"...

Dec. 18, 2010

Ain't arguing they shouldn't be able, but what I think the interpretation of the rules of practice is stating is that since control of the selection process of the commission, and in this discussion, where they can or can't work after leaving is not under the jurisdiction of the commission, then submitting a petition under (Rule 6.3) Petition for Rulemaking. Section A would not apply. I may be wrong, that's just the way I read it.

Dec. 18, 2010

Having the CPUC operate under the Brown Act may be somewhat of a sticky wicket, so to speak. PUCs are generally considered governing bodies, rather than legislative bodies. The Brown Act covers legislative bodies of local agencies. The CPUC is considerd a governing body and was created originally as the Railroad Commission by a constutional amendment. I don't know that there is standing to make the CPUC adhere to the Brown Act.

Dec. 18, 2010

This certainly goes to the heart of my earlier opposition to Proposition 16 as a constitutional amendment raising investor owned utilities to a position superior to that of charter and general law municipalities.

At the same time, it is incumbent on us ordinary citizens to subscribe to CPUC filings and become informed of utilities' applications and their supporting testimony via email, as well informed of all protests filed against them.

Currently, out of a population of roughly 30 million Californians, less than 2000 of us are subscribed and know what business there is before the Commission. I am betting that I am one of the small handful who is not employed by a utility and who is not already a CPUC-experienced intervening protester.

http://subscribecpuc.cpuc.ca.gov/

Dec. 18, 2010

That would make two of us since I am also a subscriber.

Dec. 18, 2010

Ausgezeichnet! The more, the merrier...

Dec. 18, 2010

Another option: a local ballot initiative applicable only to SDG&E.

Because Proposition 16 did not pass, San Diego electricity franchise ordinance language relating to voters changing or even terminating that agreement with SDG&E were not affected. We could gather enough signatures locally without too much cost for a simple initiative within the City of San Diego, requiring that no Commissioner be hired within five years or so of leaving CPUC.

According to other language in the electricity franchise ordinance, all terms are to be construed to the benefit of City of San Diego and strictly against franchise grantee SDG&E.

http://www.sandiego.gov/undergrounding/pdf/sdgefranchiseagree.pdf

I once posted a possible franchise ordinance amendment raising the annual franchise fee paid by SDG&E from 3% to 20% until all power lines are underground to reduce future wildfire risks from overhead power equipment... it could still fly... :

Dec. 19, 2010

I started writing these blog posts in 2007 for fellow plaintiffs in ENCANTO GAS HOLDER VICTIMS V. SDG&E, people who in some part were already identified as federal crime victims in UNITED STATES OF AMERICA V. SDG&E. After we lost EGHV V. SDG&E in summary judgment, I told them that I was going to keep writing these blog posts because others needed to see this. I also told them that compared to the masses that would rather bitch than begin to do something, they had already done enough and I wasn't going to bother them with any more crusades.

This weekend, I discovered our efforts as Attorney General's Proposition 65 private enforcers in the public interest were not in vain.

It turns out that besides the handful of regular comment posters here, there are hundreds or even thousands of others who have taken note of our enforcement action, of these blog posts, and of other related writings that happen to show up on search engines.

Right now, there's some interest here and elsewhere on the 'net in a rather short ballot initiative to amend the San Diego electricity franchise agreement, putting a limit on things being too cozy between CPUC regulators and the local utility that happens to be headed by a former CPUC commissioner. The $200 or so filing fee for a petition can be found; the signatures can be gathered. I happen to think it can all be done without too much expense, mostly by the unpaid efforts of any part of over a million rather annoyed residential and small business power consumers in time for the 2012 general election.

Time will tell as to what happens next. This initial effort may not be a whole lot of anything in the long run, but it's a start.

Dec. 19, 2010

I'm "IN" + I dedicate this poem to all those that HATE BEING RIPPED OFF by our elected Leaders! Please join US...

  • $elf $ervice -*

Are all of our Leaders out of their minds Helping themselves while putting US in binds

We elected them to do a good job for US But now it seems all we can ever do is cuss

What is now happening in the USA Many are thinking that we have lost our way

So just where is our great Country bound Now that jobs are nowhere to be found

Our Leaders are making lots of big deals While our People are having to skip meals

They smile for the camera without shame While at the same time they are the blame

If you are not Rich or a Corporation You have little say in running our Nation

I doubt Leaders even care about US or what we think Unless they want donations or get caught in a real stink

Our last election we voted for Change as the right way to go Now many are begging for any change because they have no dough

While our Leaders discuss how they need ever more money To all those struggling to make ends meet that's not funny

Things will be very different in our next election Voters won't support a greedy candidate selection

So my advice to all Leaders fearful of a recall You better start doing what's right and getting on the ball

*from http://www.sandiegoreader.com/weblogs/np-star/2010/aug/26/rhyme-a-day/#c79726

Dec. 19, 2010

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