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A 2016 California Law Meant to Prevent Wildfires. Utility Regulators Delayed Enforcing It.

Long before the Camp Fire raced through Northern California, claiming at least 85 lives and all but erasing the Gold Rush town of Paradise, state law required the three big power monopolies to file detailed strategies to prevent wildfires.

By Jeff McDonald

Long before the Camp Fire raced through Northern California, claiming at least 85 lives and all but erasing the Gold Rush town of Paradise, state law required the three big power monopolies to file detailed strategies to prevent wildfires.

Under Senate Bill 1028, San Diego Gas & Electric, Southern California Edison and Pacific Gas & Electric were supposed to prepare annual wildfire mitigation plans for reducing fire threats and identify who specifically would be responsible for implementing them.

The bill, signed into law by Gov. Jerry Brown in September 2016, also called on the California Public Utilities Commission to review the filings every year, comment on the material and audit the companies to make sure they were being followed.

More than two years after the legislation was enacted, state regulators have yet to direct issue directives for the utilities to write the plans, let alone discuss or examine them for compliance -- although SDG&E says its own fire plans comply with the new law.

While the commission delayed enforcing the new law, wildfires suspected of being caused by overhead powerlines and other utility equipment killed at least 125 people. They also destroyed 18,000 buildings and charred hundreds of square miles of the California landscape.

"They have done absolutely nothing in those two years," state Sen. Jerry Hill, the San Mateo Democrat who introduced SB 1028, said of utility regulators.

"The unfortunate thing is we gave them that authority but we did not put a timeline on it," Hill said. "We assumed it would be prioritized, but sadly it takes a tragedy to realign priorities -- and that's what we've seen -- tragedy and devastation."

Utilities commission spokeswoman Terrie Prosper did not respond to questions about why the agency has not required the plans.

In a response to a California Public Records Act request, commission lawyer Frederick Harris said regulators were "in the process of developing procedures to implement Senate Bill 1028" when Brown signed a different wildfire-related bill this past September.

"As a result, the commission had not yet directed the utilities to submit wildfire mitigation plans in compliance with SB 1028," Harris wrote.

The new timetable was developed under Senate Bill 901, the wildfire legislation signed early this fall. The schedule has PG&E, Edison and SDG&E filing annual mitigation plans by February. Regulators have little faith that the paperwork will make any immediate impact.

"The commission does not expect to achieve perfection in the short time that will be available for initial review and implementation of the first wildfire mitigation plans, but will work with the parties to make the best use of that time to develop useful wildfire mitigation plans," an October report states.

For decades, state regulations have required power companies to maintain their equipment in ways that ensure safe and reliable electricity. They also are required to take corrective action when accidents happen.

As monopolies, they are permitted to collect as much money from ratepayers as they need to meet their obligations, with commission approval.

The mitigation plans required under SB 1028 are intended reduce the threat of wildfires and to help determine whether utilities will be able to shift liability for future wildfires from company shareholders to utility customers.

Part of Senate Bill 901 allows power companies to issue bonds to pay for future wildfire-related expenses. If regulators determine that utilities met the prevention standards in the mitigation plans and other rules, they will be allowed to pass the bond costs on to their customers.

PG&E, whose equipment is suspected of igniting the Camp Fire and at least a dozen others since 2017, did not respond to questions about why it has not produced the mandated wildfire mitigation plans.

The other major utilities said they fully complied with state laws, including fire prevention plans required under previous legislation.

"SDG&E's fire prevention plans are filed with the commission on October 31 each year and are compliant with the requirement to submit a wildfire mitigation plan for the past two years," spokeswoman Christy Ihrig wrote by email. "Because we were required to submit both a fire prevention plan and a wildfire mitigation plan, we filed one plan that met both sets of requirements."

Edison, which operates the powerline suspected of starting the Thomas Fire that roared through Ventura and Santa Barbara counties last December, said it has several plans in place to prepare for and to mitigate the impact of potential wildfires.

It blamed regulators for not having the plan required by SB 1028.

"At the time SB 901 was enacted, no CPUC rulemaking on prior legislation had been established," an Edison spokesman said by email.


San Diego firestorm

In October 2007, amid a crush of high winds and even higher temperatures, a transmission line owned by SDG&E sparked a brush fire just east of Ramona.

Within minutes the blaze grew out of control, driven by powerful gusts known as the Santa Anas and fueled by acre after acre of thick, drought-stricken vegetation that had not burned for years.

The Witch Fire was the first in a cavalcade of wildfires to strike San Diego County that week, the second deadly firestorm in the region in just four years. Some 500,000 people would flee their homes before it was over. Two people lost their lives; 40 firefighters were injured..

Two other fires that erupted that week also were caused by SDG&E powerlines, according to investigations completed in the aftermath.

In Fallbrook, hundreds of homes were lost to the Rice Fire. A smaller blaze dubbed the Guejito Fire broke out and quickly merged with the Witch Fire, which eventually burned down more than 1,100 homes on a relentless march to the coast.

SDG&E pegged damages at more than $2 billion, exceeding its $1 billion insurance policy.

The utility later recovered hundreds of millions from a telecommunications firm whose cable had come in contact with the transmission line suspected of igniting the Rice Fire and a tree-trimming company that was supposed to have removed dry vegetation.

Then in 2009, SDG&E sought permission to charge customers almost $400 million in leftover costs from the 2007 fires. Edison and PG&E joined SDG&E in asking to open special accounts to hold ratepayer funds to pay for future wildfire damages.

The utilities commission rejected the idea, and the monopolies persisted in working to curb their liabilities.

SDG&E appealed the commission ruling in court and lost. Just last month, utility executives announced they would appeal to the decision to the California Supreme Court.

Hill's 2016 legislation was introduced in response to the powerline-caused fires in San Diego County -- and SDG&E's years-long effort to charge ratepayers for the damages.

"We were a little ahead of the curve, obviously," the senator said.

Meanwhile, citing climate change and the intensifying nature of wildland fires, lobbyists for the monopolies began meeting with lawmakers to propose legislation that would insulate shareholders from billions of dollars in losses.

Their efforts were rewarded in Senate Bill 901. One provision sets aside $1 billion over five years to fund programs aimed at thinning California forests and other fire-prevention measures.

More important, the law granted PG&E special permission to borrow billions of dollars to pay for damages from a dozen or more 2017 wildfires that ravaged Sonoma and Napa counties -- and to repay the loans with ratepayer funds.

"I was the only person in the Senate to speak against 901, and it was clearly a bailout of PG&E for their liability before any alternatives," said Hill, the San Mateo senator. "Or even before the extent of the liability was determined."

Diane Conklin is a co-founder of the Mussey Grade Road Alliance, an East San Diego County community group that was organized after the 2003 Cedar fire to help prevent powerline-caused wildfires.

The alliance opposed Senate Bill 901, arguing that protecting utilities from liability for equipment failure or negligence would raise the likelihood of future wildfires because companies would no longer be concerned about paying the costs.

"Utility-caused wildfires are not 'natural' disasters, even if climate change contributes to their severity," she said. "Such fires do not start without a source, and if utility equipment is old, poorly inspected or poorly maintained it is more likely to be a source of ignition."


'They're doing nothing'

Over the two-plus years since lawmakers passed Senate Bill 1028, California wildfires have grown increasingly common and deadly.

In June, state fire investigators announced that 12 fires from the October 2017 siege in Northern California were caused by PG&E's equipment. State officials took the unusual step of sending their findings to local prosecutors.

"Cal Fire's investigations have been referred to the appropriate county District Attorney's offices for review in eight of the 12 fires ... due to evidence of alleged violations of state law," the agency said.

Utility regulators say they are investigating the recent fires but have yet to issue penalties due to violations cited by Cal Fire.

Some consumer advocates see the delays in civil enforcement by the commission -- or a lack of citations in general -- as a factor that has contributed to recurring utility-caused wildfires.

"The problem is they're doing nothing to stop the fires, and they are stoppable," said lawyer Michael Aguirre, who has been investigating the commission's response to wildfires and other accidents since he served as the San Diego city attorney more than a decade ago. "What the CPUC is focused on is funding the fires. We are trying to stop the fires."

While regulators have begun considering how to implement that latest law aimed at reducing the threat of wildfires, utility lobbyists have been meeting with commissioners and their staffs privately.

According to state-required disclosures, Edison lobbyists requested and received five separate meetings with three different commissioners in November.

Meanwhile, commission President Michael Picker reported four meetings with PG&E and Wall Street investors, some of which attracted dozens of hedge funds and asset managers.

"To ensure public safety in this time of increased wildfire occurrence, the commission is addressing wildfires in many settings and proceedings," Picker explained in his disclosure.

(c)2018 The San Diego Union-Tribune

Caroline Cournoyer is GOVERNING's senior web editor.
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