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SDG&E Seeks $379 Million From Ratepayers In 2007 Wildfire Costs

Flames from the Witch Creek fire light up the early Friday morning sky in northern San Diego County, Oct. 26, 2007.
Jon Vidar / Associated Press
Flames from the Witch Creek fire light up the early Friday morning sky in northern San Diego County, Oct. 26, 2007.
SDG&E Seeks $379 Million From Ratepayers In 2007 Wildfire Costs
SDG&E Seeks $379 Million In 2007 Wildfire Costs GUEST: Hanan Eisenman, communications manager, SDG&E

Our top story on KPBS Midday Edition the state gets a chance to speak to regulators that ratepayers get billed for some of the 2007 wildfire costs. The California Public Utilities Commission is holding hearings this afternoon and evening about SDG&E's proposal that ratepayers. Cover 379 -- $379 million in cost from wild hired -- wildfires. Reports that they did not properly maintain their lines. Joining me as the spokesman for SDG&E. Welcome to the program. Thank you for having me. They estimated $400 million in wildfire cost years ago but why is this request different? They never actually rejected recovering some costs from the fires. What we had filed a couple years ago was a framework to kind of assess cost for wildfire -related damages for all such instances going forward. They said we want you to kind of come to us with each specific case. That is kind of what we are doing now with the October 2007 wildfires. The thing about the October 2007 wildfires is that these were a natural disaster that impacted everybody here in San Diego. The conditions in October 2007 where the worst Santa Ana wind event this region has ever seen. There were hurricane force winds high heat and low humidity. This was a regional disaster so it really was from Los Angeles County all the way down to the Mexican border had dozens of fires burning in that October Santa Ana wind event. The commission's office of ratepayer advocates has proposed -- opposed this rate increase saying SDG&E did not follow state rules about clearing vegetation and maintaining power lines. Has SDG&E ever accepted any share of responsibility for the 2007 fires? The office of ratepayer advocates is an advocacy group that ag -- advocates for the customers. They never have found SDG&E at fault for the fires. What did cause the fires were the extreme natures of the Santa Ana when the that day. They were the common denominator in all three of the fires and for the dozens of other fires that broke out in the region that day. With the witch fire they were slashing wire that had been wrapped under one of our power lines blew up into a power line because of the high went and in the rice fire a tree limb with the hidden structural defect broke and blew across the tree are not in one of our power lines. All of the fires that they the common denominator was a high wind. I will ask you to look at the record Cal fire has never found SDG&E at fault. They said the source of the fire was those power lines but there was not a fault found in our operations. In fact we operated our system appropriately. We designed got engineered got expected -- inspected and maintained our facilities appropriately and inspected the vegetation. That is why we are coming now before the CPUC because in the aftermath of those fires as you know we received $5.6 billion in claims and in order to protect our customers we have worked really hard to reduce on those claims. We have reduced them all the way down to 379 million that is what is left from the $5.6 billion in claims. As a utility we are permitted to recover our reasonable cost for an event such as this. That is why we believe it is appropriate. One of several groups opposed to the recompense that you are requesting from the CPUC -- there spokesman Diane Conklin is speaking. They are offering in this environment and they should have known what the conditions were and they were underinsured. They had about $1 billion for a $2 billion fire. This is due to management of SDG&E. It is not the decision of the ratepayers. It is their own decision. Is SDG&E underinsured? We had as much insurance as we can get. We had $1.1 billion of insurance and that's the maximum that we could get. We have never been in a situation where the claims for the fires actually surpassed the insurance. That has never hacking -- happened before in our history are in California's. This was an unprecedented event. We have a weather network that we have put in place where we have more than 170 weather sensors that are spread throughout our service territory. We have studied the Santa Ana winds for intensity so that we can prepare for future fires so we can stage firefighting equipment or helicopter -- we studied this 2007 wildfire event with our meteorologist on staff. This was a once in hundred year event. We have no information that we had that would have allowed us to avoid the intensity of the winds that day. We had as much insurance as we could possibly get. Again we have worked very hard to reduce all of these claims and to protect our customers and also to meet the needs of the customers who were impacted. It is fairly certain you will be hearing from outraged San Diego ratepayers at today's hearing's who are being asked to recompense the costs of fires that were sparked in part by your lines. What you have to say to them in your final argument? We are going to be there to explain to customers our position. We understand the heightened emotions around this issue so we expected to be a very well attended opportunity for customers to express themselves and their feelings. We are focused on showing what happened that day to speak to the fact of the intense Santa Ana winds that we experienced and how we have operated our system safely I'm happy continue to do so. The public comment hearings are today at 2:00 p.m. and 7:00 p.m. at the California Center for the arts in Escondido. I have been speaking with Hanan spokesman for SDG&E thank you. Thank you very much. We will be reporting on those hearings later today on KPBS radio and TV.

SDG&E Seeks $379 Million From Ratepayers In 2007 Wildfire Costs
The public will have an opportunity on Monday to weigh in on SDG&E's request to recover $379 million in costs from the 2007 wildfires. It is the utility's second attempt to pass on hundreds of millions of dollars stemming from the fires to its ratepayers.

The public will have an opportunity on Monday to weigh in on San Diego Gas & Electric's request to recover hundreds of millions of dollars in costs related to the 2007 wildfires. Under the proposal, the average residential customer could be on the hook for approximately $20 a year for six years.

The California Public Utilities Commission will hear public comment at 2 p.m. and 7 p.m. at the California Center for the Arts in Escondido. At issue: whether SDG&E’s operations and management of its facilities were reasonable at the time of the fires.

It has been nearly ten years since seven devastating wildfires roared through San Diego County. State investigators found that SDG&E power lines started three of the fires — the Witch Creek, Guejito and Rice Canyon fires, which caused two deaths and destroyed 1,300 homes.

In the Rice Fire, investigators found that a tree branch that snapped and fell into a power line was due to poor maintenance. In the Witch Fire, two power lines that knocked together causing sparks were found to be inadequately spaced. In the Guejito Fire, a Cox Communications wire came into contact with a SDG&E line. Cox agreed to pay $2 million to SDG&E's general fund.

SDG&E argues the fires were caused by winds that measured more than 100 miles an hour, not faulty equipment or negligence.

“We don’t believe we’re at fault for any of these fires," said Christopher Lyons, an attorney with SDG&E. “Even though Cal Fire found that the ignitions were linked to our facilities, we believe the fires started because of factors beyond our control.”

“In the Witch fire for instance, two of our power lines came together in the extreme Santa Ana winds, and that’s a very unusual occurrence,” said Lyons. “Those are facilities that have been operating safely since 1960 when they were installed.”

SDG&E initially paid $2.4 billion to settle claims filed by hundreds of people who lost their homes in the fires. The utility recovered some costs from its liability insurance and third party settlements. What’s left is $379 million that the utility is now proposing to pass on to its ratepayers.

Monday's hearing is the utility's second attempt to pass on costs to its ratepayers stemming from the fires.The last time this issue was discussed at a public hearing in San Diego scores of people, including elected officials, spoke out against the proposed rate increase.