CPUC Envisions Safety in Rate Cases

By Published On: November 15, 2013

In a bid to improve the safety of energy utility operations, the California Public Utilities Commission opened a rulemaking that could change the way it handles general rate cases. Acting Nov. 14, the commission signaled its intent to incorporate risk analysis into its general rate case process to better guide utility investments in a way that enhances system safety and reliability. General rate cases outline the lion’s share of what money utilities need from ratepayers to provide reliable service for three-year periods. Commissioner Carla Peterman said that the rulemaking is aimed at “institutionalizing” safety. The commission plans to delve into such procedural issues as what data are to be submitted by utilities regarding safety. It also is to include when and how the data will be analyzed and weighed as the commission considers what investments to authorize and how much ratepayers should pay. CPUC president Mike Peevey said that considering safety in rate case proceedings is an important step since that’s where “we scrutinize most utility investments.” He added that an independent review panel essentially recommended the risk assessment approach after Pacific Gas & Electric’s San Bruno pipeline explosion in 2010. It won’t be simple to develop standard ways to assess risk, warned commissioner Mark Ferron. He called the effort “a very ambitious project.” The rulemaking will take most of 2014, but is long overdue, said commissioner Mike Florio. The last time the commission changed the way it handles general rate cases was 25 years ago, he said. In other action, the commission authorized Southern California Gas to spend $201 million to install new turbine compressors to inject gas into the ground at its Aliso Canyon Storage Facility. The existing compressors are obsolete. The new ones, according to the commission, should allow the company to increase the amount of gas it can store at Aliso Canyon, which is north of Los Angeles.

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