San Diego Gas and Electric Company has filed a response to Ruth Henrick's motion for intervenor compensation from participating in a California Public Utilities Proceeding, asking that CPUC not allow compensation for allegedly unproven economic hardship to herself or Attorney Michael Aguirre.

The CPUC proceeding is to approve the A0908020 application for Wildfire Expense Balancing Account (WEBA) authority for SDG&E and other investor owned power utilities (known as IOUs to CPUC) to bill customers for any uninsured wildfire legal expenses and other wildfire-related costs without limit.

One recent example of utility-involved wildfires includes the 2007 San Diego wildfire complex that resulted in the largest mass evacuation of county residents in San Diego history, where damages are projected outstrip SDG&E's 2007 wildfire insurance coverage of over one billion dollars. A more recent example is the San Bruno wildfire after which Pacific Gas and Electric Company has offered $100 million in recovery funding for a massive high-pressure gas line explosion and resulting gas-fed wildfire that destroyed or damaged about fifty homes in that suburban residential neighborhood.

SDG&E and other IOUs argue that Ruth Henricks is not a customer with standing to receive intervenor compensation and her attorney Aguirre is not eligible for an unreasonable rate of compensation due to his lack of previous extensive experience in CPUC-specific cases. Further, the IOUs argue that the scope of any Aguirre/Henricks participation is too broad as neither is the lead intervening party in the WEBA matter.

Despite claims that Aguirre is inexperienced as to his practice before CPUC, both SDG&E and Sempra Energy promptly entered into massive settlement agreements with CPUC and Attorney General Jerry Brown on a wide range of long-outstanding issues after Aguirre first moved to intervene in several SDG&E wildfire insurance-related matters before CPUC earlier this year. The total amount of the SDG&E/Sempra Energy settlements to both CPUC and the Attorney General's office appears to be more than the entire amount of penalties received by CPUC from all IOU violations from 2004 to 2009, as reported by Onell Soto yesterday in the *San Diego Union-Tribune*.

The amount of the April 2010 SDG&E/Sempra Energy settlement alone, providing rebates to customers stemming from the 2000-2001 energy crisis, was $400 million according to Attorney General Jerry Brown's office. Including a previous class-action settlement over the same energy crisis, the total amount to be paid by SDG&E and its parent holding company Sempra Energy is about $700 million.

As to the scope of Henrick and Aguirre's intervention, the WEBA application brings forward several novel issues, including the possible move by CPUC to limit future utility legal liability in wildfires in a second proceeding phase. CPUC own divisional attorneys argue that any such move to limit liability of anyone is not a power granted by law to CPUC. There are intervenor concerns that utilities intend to lump all uninsured wildfire legal expenses together, including damages from utility negligence, non-compliance with CPUC general orders, or illegal activities.

Clearly, any party that intends to participate in the WEBA proceeding, where CPUC may grant utilities the power to bill for things that insurance companies are not willing to cover at any price, will require substantial legal research and discovery to make sense of what attorneys for SDG&E, PG&E, and Southern California Edison are asking to do to customers in the current economic climate.

Response filed by San Diego Gas & Electric Company on 10/22/2010

Attorney General News Release of April 28, 2010


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