CPUC Delays SDG&E Fire Cost Recovery Decision

9 Nov 2017

California energy regulators again deferred voting on a decision rejecting San Diego Gas & Electric’s request to recover $379 million in costs and legal fees incurred from three extensive wildfires in San Diego in 2007.

The pending ruling denies the money because SDG&E “did not reasonably manage and operate its facilities prior to the 2007 Southern California Wildfires,” states the proposal by California Public Utilities Commission Administrative Law Judges S. Pat Tsen and Sasha Goldberg.

The delay on the proposed denial of cost recovery comes against the backdrop of new CPUC-proposed fire safety rules for utilities and the initiation of a new camera-based fire monitoring system set up by SDG&E in fire prone areas of San Diego County.

During a third quarter earnings call with investors last week, the head of SDG&E’s parent company said the utility will sue the California Public Utilities Commission if it denies cost recovery.  Debbie Reed, Sempra chief executive officer, insisted the company is “strictly liable” for the fires, and not negligent, which entitles it to cost recovery.

In September of 2015, SDG&E applied for recovery of $379 million of its total $2.4 billion in costs incurred from the fires.

At issue in the ongoing proceeding is the ignition of the Witch, Guejito and Rice wildfires 10 years ago by SDG&E electric equipment.

The Witch Fire led to the destruction of 1,141 homes, 509 outbuildings, and 239 vehicles. Combined with the Guejito Fire, the Witch Fire burned a total of 197,990 acres, killed two and injured 40 firefighters. It was the second largest fire of that season.

Regarding the Witch Fire, “the Commission is not persuaded that SDG&E utilized good utility practice when it allowed three faults to occur within a span of 3.5 hours, on a line with a history of nine faults in a 24-year period,” according to the ruling.

CalFire concluded that the Guejito fire was caused by a SDG&E conductor coming into contact with a telecommunications lashing wire. The distance between the two was half the length of the requisite clearance.

The third fire is blamed on a problematic tree limb near power lines that the utility failed to adequately trim.

The proposed ruling also rejects the utility’s claim that the wildfires were a result of unusually intense weather conditions.

“SDG&E does not prove that the Witch, Guejito and Rice Wildfire were due to unforeseeable circumstances beyond SDG&E’s control,” it concludes.

The CPUC’s fire safety regulatory proposal released Nov. 8 would impose more stringent fire prevention requirements on utilities with lines running through high fire-hazard areas outlined on fire risk maps prepared by the commission, the U.S. Forest Service, and the California Department of Forestry & Fire Protection.

The proposal outlines new requirements for utilities, including annual inspections of lines in fire zones, maintaining greater clearance between vegetation and power lines, keeping more distance between power lines themselves as well as between power lines and communications lines, and speedy correction of existing hazards.

The CPUC could vote on the proposed rules next month.

Meanwhile, SDG&E’s new fire monitoring camera network is designed to provide early notice to the utility and firefighting agencies of wildfires.

The 15-camera network in fire-prone areas of San Diego is based on a system set up in the Lake Tahoe area by the University of Nevada. The system at Tahoe has detected 300 wildfires over the past two years.

The cameras in San Diego County are mounted on communications towers and provide a 360 degree view of surrounding areas every two minutes. The cameras can zoom in on ignition points to closely identify their location.

“This sophisticated set of cameras is providing us with a level of real-time situational awareness we’ve never had before,” said Caroline Winn, SDG&E’s chief operating officer.

—Elizabeth McCarthy & William J. Kelly

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