At long last, one wing of the state’s Public Utilities Commission is making sense on a major dispute commissioners will decide between a big utility and its millions of customers.
At issue is who will pay the enormous costs of the 2007 Witch, Guejito and Rice fires that killed at least 10 persons and destroyed more than 1,125 homes in a wide swath of the San Diego area. The fires began with power lines owned by San Diego Gas & Electric Co. that arced dramatically when dry winds reached 100 mph and more in October of that year. But the company’s latest rate increase application asks the PUC to dun customers – including residents who have since rebuilt their charred homes – for 90 percent of its approximately $380 million in fire-related expenses.
In some ways, this rate increase request from a company whose board of directors includes the sister of Gov. Jerry Brown is even more egregious than the PUC’s ruling in 2014 to force customers of both SDG&E and Southern California Edison Co. to absorb about 70 percent of the $4.7 billion cost of decommissioning the San Onofre Nuclear Generating Station in northern San Diego County. The plant closure was largely the result of an Edison blunder, part of the reason that ruling is now being reconsidered.
The Witch Fire began as a small blaze caused by power lines near Ramona, then grew exponentially within 24 hours to reach the San Diego city limits. It soon combined with smaller fires to eventually incinerate whole neighborhoods and cul de sacs.
This was not open rural country, but high-priced suburban real estate. Evacuations were ordered during a three-week period in cities like Oceanside and Encinitas, Del Mar Heights and Carmel Valley, Rancho Santa Fe and Rancho Bernardo and more. More than 197,000 acres burned and more than 500,000 people had to leave their homes at least for awhile.
In the rate increase application, there is no talk about the company compensating affected customers for their own fire-related costs, as most might think fair. Damage claims afterward came to more than $4 billion, much of it not covered by insurance.
Now the PUC’s own Office of Ratepayer Advocates, largely passive during the San Onofre dispute and the controversy over token punishment of Pacific Gas & Electric Co. for its negligence (the term used by federal prosecutors) in the 2010 San Bruno gas pipeline explosion that killed eight persons, has for once taken a forceful stand on a significant issue.
Testimony filed in late fall saw the OPA roundly condemn SDG&E, whose actions it called “not those of a prudent manager.” The office argued that the utility did not comply with state rules on vegetation management, which is as crucial around power lines as it is for homes in fire-prone areas. The company should not be rewarded for ignoring regulations, the OPR argued.
SDG&E, of course, claims it is entitled to reimbursement for its fire-related expenses, which would cost the average customer $1.67 per month for several years.
“The alleged involvement of SDG&E facilities in the ignitions of the three fires does not show (the firm) acted unreasonably or imprudently,” company lawyers said.
The case creates a major test for the scandal-plagued PUC, whose current president, Michael Picker, keeps promising more transparency and adherence to rules prohibiting private contacts between commissioners, their staff and utility regulators during rate cases. Despite the rules, such contacts have long been common.
If SDG&E ends up paying only about 10 percent of its expenses from a hugely traumatic fire caused in large part by its equipment and its inaction, the PUC will be saying there has been no change despite many scandals.
Only if the company’s proposal is cut by much more than half will there be any reason to believe this commission has turned a page and become more friendly to the consumers it is supposed to serve.