Category: Utilities

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

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!