The California Public Utilities Commission is preparing to allow San Diego Gas and Electric Company (SDG&E) and other investor-owned utilities (IOUs) to pass wildfire legal costs through to customers.

SDG&E and the other IOUs requested that the decision be announced by CPUC between March 30 and April 16 this year. The IOUs also demanded that no public hearings be held on the matter of permitting the utilities to carry balances on new Wildfire Expense Balancing Accounts (WEBA; see A.09-08-020 — Joint Utility Wildfire Cost Recovery Application).

The joint application to CPUC by SDG&E and the other IOUs stated that wildfires are natural disasters, and therefore CPUC is obligated in the public interest to protect the financial health of those companies, even if it means rate increases to customers.

In 2009, SDG&E employee testimony to CPUC about the 2007 county wildfires revealed that the company's vegetation management program failed to predict the Rice Fire starting point, despite a contractor's computer notice to SDG&E of the need for tree trimming in the three months before the Rice Fire. According to Don Akau, SDG&E vegetation program manager, "A pre-inspector’s selection of the 0-3 months drop-down option for the 'Months to Next Trim' field in VMS [SDG&E's vegetation management system] does not mean that the tree will be trimmed within three months.'" Akau also stated that SDG&E did not act on the tree trimming request because it did not get a contractor's follow-up memo (Akau Testimony).

2009 SDG&E employee testimony to CPUC by Gerry Akin regarding the 2007 Witch Fire also indicated that routine SDG&E maintenance was unable to predict or prevent power lines from starting that fire, despite alleged compliance with a CPUC order regarding the design of power lines subject to high winds. (Akin Testimony).

In the last reported quarter, SDG&E income to its holding company Sempra Energy was $107 million. Total Sempra Energy revenues for 2008 were about $11 billion despite the Crash of 2008, nearly the same as the $11 billion reported for the prior year 2007. Sempra Energy maintains a quarterly dividend payout ratio relative to retained earnings of about 37-40%. Ordinarily, analysts would attribute such a high dividend payout ratio to companies with no interest in investing in its own plants and other facilities.

Currently, SDG&E projects that all power lines in San Diego County will be underground by 2063. SDG&E's only plan for reducing wildfire risks from power lines until then is an unapproved scheme to cut power to county residents during periods of high dry winds.


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