California Regulators Get An Earful In Escondido
Monday, January 9, 2017
SDG&E is trying to convince state regulators that extreme wildfire conditions are the reason the 2007 wildfires killed two people, burned nearly 200,000 acres and destroyed more than 1,300 structures.
The California Public Utilities Commission was in Escondido on Monday gathering testimony on San Diego Gas and Electric's request to charge customers for leftover costs from the 2007 wildfires.
The utility paid more than $2 billion in settlements and other charges after state officials determined the company was responsible for starting the Santa Ana-driven wildfire. Insurance covered about half those costs. Settlements from Cox Communications, a tree trimming company and an electrical contractor paid for more. What remains is an unpaid bill of $379 million.
Critics say SDG&E shouldn't be rewarded for starting the destructive fire. They showed up in force at the CPUC hearing calling on shareholders to pay. Those calls were met by loud applause.
Consumer advocates told regulators there's a concern the utility will take bigger safety risks in the future if regulators allow ratepayers to bail them out.
"The problem with reimbursement by ratepayers, the ever expanding and deep pool of money that they go to when they don't want to have their shareholders pay," said Diane Conklin of the Mussey Grade Road Alliance in Ramona.
"You create the issue of moral hazard. In other words, you create the conditions with awarding for this kind of thing for more awards in the future," said Conklin.
The utility says it followed the rules and that's why the company should be allowed to pass the costs on to ratepayers.
"We operated a safe system at that time appropriately designed, engineered, maintained, inspected these facilities," said Hanan Eisenman, an SDG&E spokesman.
"These facilities were inspected. The vegetation was inspected. There were factors beyond our control that caused these fires, and really the common denominators of nature in all of the fires was this unprecedented Santa Ana wind event," said Eisenman.
The utility argues the event was an act of God and that allows the company to seek relief from ratepayers.
The CPUC will decide the issue later this year.
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