Utility Dive: CPUC safety certification eases PG&E access to wildfire insurance fund, prompting backlash

“Some stakeholders, however, remained critical of the certification, and questioned why the division granted PG&E the certification while also detailing problems with its wildfire mitigation processes.

“To me, this feels like a 16-year-old going to get their first drivers test and the DMV says, well, during the test you ran a red light and made an illegal U-turn and you probably hit and killed four pedestrians — but here’s your drivers license anyway,” April Rose Maurath Sommer, executive and legal director of the Wild Tree Foundation, said.

The issuance of the safety certification is conditioned on PG&E having an approved wildfire mitigation plan — but the process for approving that plan has been changed from one where the public had the opportunity to get involved to a more ministerial function, Maurath Sommer said.

“So there’s not an opportunity for legitimate, meaningful involvement by the public in the approval of the [plans] and that becomes the basis for the safety certification,” she added.”

-Utility Dive, CPUC safety certification eases PG&E access to wildfire insurance fund, prompting backlash (January 20, 2021) read more

California Current: CPUC Judge Adds Ratepayer Protections to $337M SCE Bond

“If Judge Jungreis’ Oct. 16 proposed decision is approved by the CPUC, “it will take the only sensible pathway to meeting the quick turnaround time required,” by AB 1054 and the “substantive requirement that ratepayer costs be minimized by retaining oversight over the terms of the bonds following approval of a financing order,” April Rose Maurath Sommer, Executive & Legal Director of intervenor Wild Tree Foundation, told Current.”

California Current, CPUC Judge Adds Ratepayer Protections to $337M SCE Bond (October 20, 2020) read more

Utility Dive: PG&E faces soaring insurance costs, leadership changes in rest of 2020

“Stakeholders in California have raised concerns that the company is still exposed to the risk of wildfires in its service territory. PG&E plans to “harden” around 7,000 miles of its power lines in the next 12 to 14 years, April Rose Maurath Sommer, the Wild Tree Foundation’s executive and legal director, told Utility Dive in early July — out of more than 30,000 miles of lines located in parts of California prone to wildfires.”

-Utility Dive: PG&E faces soaring insurance costs, leadership changes in rest of 2020 (July 31, 2020) read more

Utility Dive: PG&E exits bankruptcy, but long-term wildfire risk could put it ‘back in the soup’ July 6, 2020

“Maurath Sommer says, there are still many unknowns about how the fund will function and how far it will go — for instance, what happens if there are multiple fires at one point and the fund is depleted, as well as who gets first draw.

“I find it impossible to believe there’s not going to be more utility-caused fires,” she said, adding, “There’s a very likely possibility that the fund could be depleted, and there’s no contingency for that.””

-Utility Dive, PG&E exits bankruptcy, but long-term wildfire risk could put it ‘back in the soup’ (July 6, 2020) read more

Utility Dive: PG&E foresees $600M or greater loss for Kincade Fire, files to securitize $7.5B in fire costs May 4, 2020

“”The stress test was created by the legislature in SB 901, I think in an attempt to basically prevent the utilities from going into bankruptcy, and PG&E made the elective and fully voluntary choice to file for bankruptcy, undermining the entire purpose of this ratepayer funded bailout,” she said.”

-Utility Dive, PG&E foresees $600M or greater loss for Kincade Fire, files to securitize $7.5B in fire costs (May 4, 2020) read more

Utility Dive: Advocates question move to new PG&E CEO amid coronavirus, upcoming wildfire season

“”I’m guessing that it is probably not a particularly enjoyable role at this point to be the head of PG&E — they are a much vilified company, and completely deservedly so,” Maurath Sommer concurred.

She has doubts about the strategy of bringing in a new CEO at this point, especially given that the bottom has completely fallen out of the economy due to the COVID-19 outbreak. The company is going to require someone “who needs to look very differently at [the way] they are approaching ratemaking right now.””

Utility Dive, Advocates question move to new PG&E CEO amid coronavirus, upcoming wildfire season (April 23, 2020) read more

San Francisco Chronicle: California regulators move closer to approving PG&E’s exit from bankruptcy

“April Rose Maurath Sommer, executive and legal director of the Wild Tree Foundation, a group involved in the regulatory proceedings, said she thought the commission didn’t go far enough. She had appealed the $2.14 billion penalty decision even before Rechtschaffen sought to change it, and she wanted the commission to preserve its ability to investigate the company’s conduct surrounding 2017 and 2018 fires.

Allowing PG&E to avoid the $200 million fine altogether is “the worst possible message you can send to the utility,” she said.

“It informs them that even when the commission has determined that a utility should be fined, if they are able to use some cunning and clever lawyering, they’re not going to have to pay,” she said. “It’s very disturbing.””

-San Francisco Chronicle, California regulators move closer to approving PG&E’s exit from bankruptcy (April 21, 2020) read more

Utility Dive: CPUC On Track to Turn Ratepayers Into PG&E’s Piggy Bank

The CPUC has fast tracked an application by PG&E to increase residential rates $900 million dollars beginning in August by an average of 5-7%.  This is just one of many rate increases PG&E plans on foisting on its customers in the coming months and year.  PG&E would have the Commission approve their request for “interim” rates without any determination whether or not the requested rate increase is just or reasonable.  PG&E has also applied for the Commission to establish a new process for the regulated utilities to automatically increase rates with no review whatsoever every time a utility states that it has spent $100 million on certain expenses.  Such an automatic “interim” rate increase would flip the ratemaking process on its head and would rely on the word of private, for-profit companies like PG&E, now a two time convicted felon.

Wild Tree strongly objects to this manipulative effort by PG&E to utilize ratepayers as unwitting lenders.  “‘PG&E’s current scenario doesn’t meet the standards of an “emergency situation’ that would warrant raising rates prematurely, April Rose Maurath Sommer, executive and legal director of the Wild Tree Foundation, told Utility Dive. . . ‘Our position is they’re effectively trying to turn ratepayers into a piggy bank and acquiring what would be extremely low-interest loans from ratepayers,’ Maurath Sommer told Utility Dive.

PG&E’s customers already pay some of the highest rates in the country, she added, and despite commitments to refund the costs at a later date, ‘the harm’s long been done then.’” Utility Dive, PG&E request for early recovery of $899M from customers troubles ratepayer advocates  read more

 

San Francisco Chronicle: CPUC Judge Approves Settlement with PG&E With Slightly Improved Terms over Proposed Sweetheart Deal

February 27, 2020

An Administrative Law Judge has issued a decision approving a settlement between CPUC staff and PG&E for the dozens of violations of law that PG&E committed that caused 19 fires in Northern California in 2017 and 2018.  This settlement includes illegal activity that resulted in the highly deadly and destructive Wine Country Fires and the Camp Fire, the most destructive fire in California history.  The decision modifies the sweetheart deal for PG&E that CPUC staff had originally agreed to that would have assessed $0 fine, let PG&E benefit from tax deductions for the supposed “penalties,” and otherwise let PG&E off with a mere slap on the wrist. 

Wild Tree played a key role in arguing against the terms of the original proposed settlement agreement especially the no fine fine and we are glad to see that a $200 million fine had been included in the amended deal approved by the ALJ.   Unfortunately, Wild Tree and partner PG&E customer Thomas Del Monte,  have not yet been successful in compelling the CPUC to truly investigate the cause of the Tubbs Fire and to investigate the possibility that PG&E has known since 1987 that the piece of equipment that failed outside of Paradise, California igniting the Camp Fire (C-hook) risks failure throughout its territory.   The ALJ’s decision does not change the terms of the settlement that effectively bar any further CPUC action against PG&E for such malfeasance. 

“April Rose Maurath Sommer, the executive and legal director of the Wild Tree Foundation, a group involved in the regulatory proceedings, told The Chronicle in an email that she planned to appeal the decision, calling it “insufficient” to address PG&E’s wildfire-related misdeeds.”  – San Francisco Chronicle,  PG&E penalty from 2017, 2018 fires could grow 27%  read more

San Diego Union Tribune: CPUC approves ratepayer bailout for future utility-caused fires

Oct. 24, 2019

“April Maurath Sommer, executive director of the Wild Tree Foundation, an environmental group based in the Bay Area, said the quick approval of safety certifications amounted to a ‘rubber stamp’ and criticized how the new law shifted the burden from utilities having to prove they acted responsibly onto customer advocates needing to show power companies acted negligently.  ‘It’s a David and Goliath situation now,’ Maurath Sommer said. ‘There’s an assumption of safety here that the utilities don’t deserve.'” -San Diego Union Tribune, Rob Nikolewski, California regulators approve funding for controversial wildfire law, Assembly Bill 1054 creates a $21 billion fund for fires caused by utility equipment

Read more

Wild Tree opposes California ratepayers being forced to contribute to the AB 1054 wildfire insurance fund as an unconstitutional taking of property without due process and as unjust, unreasonable, and unsafe.  Unfortunately, the California Public Utilities Commission (CPUC) recently voted to approve a rate increase for the fund, thus approving a pre-bailout for future utility-caused fires.  

Under this scheme, CPUC staff awards an investor owned utility (IOU) a “safety certificate” based on very low bar and the IOU is then presumed to have not be at fault for any fires they cause for the following year.  SCE and SDG&E were granted a rubber stamped safety certificate 6 days after they submitted their requests.

If an IOU causes a fire, it can use the wildfire insurance fund to pay out claims to victims.  The fund is paid for by ratepayers with an electricity bill increase.  While there are some IOU  “stockholder contributions” to the fund, stockholders make their money off the backs of ratepayers and the IOUs are all asking for increased rates of return so any stockholder contributions really derive from rates. 

If parties that voluntarily engage in CPUC proceedings, such as small non-profits like Wild Tree and individual ratepayers, can prove that the IOU was negligent, reckless, and/or imprudent in causing a fire then the IOU might have to reimburse the fund. BUT, this reimbursement is capped over a three year period.  The cap is set at 20% of the utility’s transmission and distribution equity rate base, less any actual or pending reimbursements during the prior three-years. For example, PG&E reimbursement cap would be approximately $2.5 billion. 

PG&E has yet to meet the requirements to take part in the fund but the bankruptcy and all sorts of PG&E-related proceedings at the CPUC are being unreasonably rushed so it can take advantage of the fund.  Assuming PG&E continues business as usual, under AB 1054, if an PG&E causes a future fire and the damage claims exceed $2.5 billion, even if Wild Tree or other parties could overcome a presumption of safety based upon a safety certificate and show that PG&E acted wrongly, the IOU will still be able to rely on ratepayer funds to pay damage claims for a fire it caused due to business decisions.  If it caused other fires within 3 years, it might not have to reimburse the fund for any of the costs of successive fires so long as that $2.5 billion cap is reached. This creates a major disincentive for PG&E to prioritize safety over profits and is precisely the sort of deregulation of for-profit, private electric utilities that California does not need!

San Francisco Chronicle: CPUC Denies PG&E Opportunity for Ratepayer Bailout for Napa-Sonoma Fires

June 28, 2019

The CPUC has issued a decision approving a “stress test” methodology that SCE could use to get a ratepayer-funded bailout for the Thomas Fire even if it is deemed to have acted imprudently and caused the fire.  In an unexpected, but welcome, move, the CPUC prohibited PG&E for using this stress test  to recover costs from the Napa-Sonoma Fires. 

“‘This is a big blow for PG&E,’ said April Rose Maurath Sommer, the executive and legal director of the Wild Tree Foundation, which was involved in the regulatory proceedings. ‘That aspect of the decision is very good.’  She said the stress test could still potentially be used by Southern California Edison, whose equipment state investigators have said sparked the 2017 Thomas Fire.”  -San Francisco Chronicle, PG&E probably barred from new path for raising rates because of 2017 fires read more

 

 

San Francisco Chronicle: Regulators race to give PG&E a path to raise rates for wildfire costs

April 22, 2019

Wild Tree Foundation is pushing back against California Public Utilities Commission efforts to approve a blueprint for a PG&E bailout for the Napa-Sonoma Fires.

“April Rose Maurath Sommer, the executive and legal director of Wild Tree Foundation, said “in an ideal world,” regulators would dismiss the proceeding. She thinks the stress test provision was included in 2018 legislation, SB901, to stave off a PG&E bankruptcy, which happened anyway.  “The only reason I can see that the commission is interested in pushing this proceeding so quickly and so aggressively is they consider it their role that they improve the outlook of PG&E for investors,” Maurath Sommer said. “The commission’s role is not to protect PG&E. It’s not to protect the utilities. It’s to protect the ratepayers.” -San Francisco Chronicle, Regulators race to give PG&E a path to raise rates for wildfire costs read more

Los Angles Times/San Diego Union Tribune: Mixed Reaction to Newsom’s Strike Force Report on California Wildfires

April 12, 2019

Governor Newsom’s Strike Force report on Wildfires and Climate Change: California’s Energy Future has some good ideas but a reversal of strict liability/inverse condemnation for utility-caused fires is not one of them.

“April Maurath Sommer, a longtime defender of inverse condemnation, said the doctrine does not need to be modified. Changing inverse condemnation “is a distraction,” said Maurath Sommer, the executive director of the Wild Tree Foundation, an environmental and consumer group based in the San Francisco Bay Area. “The utilities’ negligent practices have caused these fires and that is what we’re dealing with and that is what needs to be addressed.”- Los Angles Times/San Diego Union Tribune, Mixed Reaction to Newsom’s Strike Force Report on California Wildfires  read more