Hundreds turn out for hearings on SDG&E wildfire cost recovery plan
By Karen Brainard
The public hearing to address San Diego Gas & Electric’s proposal to recover uninsured wildfire losses — a hearing Ramonan Diane Conklin fought for — drew about 450 people Thursday afternoon with another 200 showing up at a second hearing in the evening.
“I’m astounded by the turnout,” said Conklin, “but in all reality I’m not surprised. We were the party that insisted on a public participation hearing and maybe that was because we believe in the people and grassroots.”
Conklin is the spokesperson for Mussey Grade Road Alliance in Ramona.
The hearings were held by the California Public Utilities Commission (CPUC) at Al Bahr Shriners Center in San Diego and were conducted by Commissioner Timothy Alan Simon and Administrative Law Judge Maribeth Bushey. A CPUC spokesperson said 146 people signed up to speak during the afternoon session.
Few people were in support of SDG&E’s application to the CPUC to establish a Wildfire Expense Balancing Account (WEBA) to record and recover costs from the 2007 wildfires and future fires that could lead to ratepayers picking up a $500 million tab.
Many protesting SDG&E’s proposal criticized the utility and its parent company, Sempra Energy, for seeking to recover costs from ratepayers while the companies have posted profits and given management bonuses.
Those speaking in opposition included county supervisors Dianne Jacob and Pam Slater-Price, and state Senator Christine Kehoe.
Jacob received a standing ovation from many in the audience after her testimony.
“The flames from 2007 might be out but many people in this room feel like we’re still getting burned,” she said. “That’s because we’re watching our utility roil around in more than healthy profits while we’re being asked to pay for their mistakes.”
Jacob said the commision’s own Consumer Protection and Safety Division concluded that SDG&E failed to properly design, construct, and maintain its lines, which caused the Witch, Guejito, and Rice fires during dry Santa Ana winds in October 2007. Those fires burned more than 200,000 acres, destroyed about 1,800 homes and other buldings, and killed two people, she noted.
According to Jacob, SDG&E managers and executives received more than $76 million in bonuses since 2007,and Sempra gave its top five executives $29 million in bonuses in the year after the fires. In addition, she said, Sempra made profits of $1.1 billion last year.
“Sempra can well afford the costs of insurance and SDG&E’s failures,” Jacob said.
The District 2 supervisor also asked what incentive the utility will have to properly maintain its wires when it has an automatic public bailout for future damages.
At the start of the hearing, Michael Thorp, attorney for SDG&E, explained the WEBA and its potential impact on rates.
“Our proposal is a mechanism for possible future rate recovery of wildfire claims and litigation costs,” he said.
Those costs are not recovered from SDG&E through insurance, third parties, or federal energy regulatory commission rates, Thorp said, adding that SDG&E would need to file a separate application before any WEBA costs could be added to rates.
As Thorp reviewed a proposed category under WEBA in which customers will pay a majority of costs, boos erupted from the audience, prompting Bushey to ask that participants be respectful of SDG&E’s comments.
Thorpe said the 2007 excess wildfire costs to date are estimated to be about $500 million, which is less than the $1.1 billion paid out by SDG&E’s insurance and about $450 million from third parties. There are still a number of outstanding claims, he said, and the $500 million could increase or decrease. If the excess costs are $500 million and the WEBA and rate increases are approved, Thorp said, customers could see an increase of $3 to $4 more a month for four years.
Critics say the excess costs are higher and ratepayers will be charged more.
Kehoe urged the commission to reject SDG&E’s proposal.
“To allow the WEBA account to go forward would impose a permanent unfair fiscal burden on ratepayers and prevent the PUC from determining a reasonable distribution of responsibilities and expenses on a case by case basis,” said Kehoe.
Slater-Price said SDG&E is claiming significant losses but continues to give dividends to its investors.
“What is wrong with this picture?” she asked.
Richard Zelmer of Ramona said the utility should simply call the plan what it is — a rate increase.
“You take a simple matter and make it complicated by making it into several stages and giving it an acronym, like WEBA,” he said.
Some speakers told of the devastating losses they suffered in the 2007 wildfires, and others held signs stating “CPUC tell SDG&E to get the money from Sempra” or “CPUC—which side are you on?”
Among the few speaking in favor of the WEBA account was a policy adviser for Supervisor Ron Roberts who said SDG&E is helping to get more fire stations in unincorporated areas connected to the Internet. A veteran of the San Diego County Fire Service said SDG&E has installed weather stations that will significantly help the county anticipate potential threats to the system in the event of another “fire-prone reality” and the utility has brought resources to fire agencies. A National Weather Service director gave testimony about the wind speeds during the 2007 fires and said, “This was no ordinary Santa Ana wind event.”
At least 20 people from Ramona attended, including 10 from the Mussey Grade Road Alliance.
Conklin said ratepayers need to keep the pressure on the CPUC and may still contact the commissioners to tell them to deny SDG&E’s application. Contact information on the commissioners can be found at www.cpuc.ca.gov/PUC/aboutus/commissioners or by calling 415-703-2782. Proposed decisions by Simon and Bushey are expected in a couple of months. Conklin said she does not see the CPUC voting on the application before August.