SDG&E Seeks Recovery of ‘Excess Costs’ of Fires From Customers

SDG&E has a proposal before a state commission to establish an account for wildfire expenses, meaning some costs of the 2007 fires—as well as those in the future—could be borne by ratepayers.


SDG&E customers throughout the county could ultimately be asked to pay for “excess costs” incurred by the utility as a result of the 2007 wildfires, if a proposal before state regulators is approved.

The company’s poor equipment maintenance was found by the state to have caused the massive Witch Creek, Guejito and Rice Canyon fires, which together took the lives of two civilians, destroyed more than 1,300 homes, scorched more than 200,000 acres and injured at least 40 firefighters.

Firefighting agencies spent $18 million extinguishing the Witch Creek fire alone. SDG&E settled with state regulators for $14.8 million and was ordered to pay at least $920 million to insurance companies who had paid out to property owners. Its insurance did not cover all of the costs incurred.

SDG&E has had a proposal before the California Public Utilities Commission (CPUC) since 2009, requesting the establishment of a Wildfire Expense Balancing Account to record their costs.

Once the account is established, it would pave the way for SDG&E to bill customers for uninsured costs incurred after the October 2007 fires, as well as for future fire-related expenses. The expenses could go as high as $463.9 million or more, according to a Ramona group fighting the plan.

The Mussey Grade Road Alliance also states that the expenses include SDG&E’s legal costs.

“These types of accounts are common,” Stephanie Donovan, SDG&E spokeswoman, told Patch this week. She said the idea is that if a utility collects more money than is needed, it gives it back to ratepayers, and if it doesn’t collect enough to cover costs, it passes those costs along to customers.

The alliance is fighting SDG&E’s efforts to place the burden back on property owners—some of whom lost everything they owned in the fires. Spokeswoman Diane Conklin said they have been asking the CPUC since September 2010 for a hearing in San Diego so property owners can give their input. The CPUC has not ruled on the matter, spokesperson Terrie Prosper confirmed.

Conklin said the alliance just found out this month that SDG&E intends to seek reimbursement for the Witch Creek fire costs that were uninsured. Until then, she said, it had been her understanding that the utility would only seek to be reimbursed for future fires.

But Donovan told Patch that SDG&E’s intent was clear all along in its filings with the CPUC.

The alliance has asked for a public hearing to be held in February or March. SDG&E opposes the idea. Donovan said that, at this stage, the utility is simply asking to establish an account to record costs.

“This is not the appropriate time to have a public participation hearing,” she said. “It would confuse the matter. If the commission approves the account, we’d have to file more documents. Let’s not put the cart before the horse. Any costs wouldn’t be passed along to customers for a couple of years hence, if at all.”

In SDG&E’s response to the Alliance request, it states that the utility is “not seeking to recover any wildfire costs in rates in this proceeding. Rather, we are asking the Commission to adopt a wildfire cost recovery mechanism that would facilitate the potential recovery of wildfire costs in a future Commission application proceeding.”

However, Conklin told Patch, “This is like SDG&E saying that, ‘We are constructing a guillotine, but you don’t need to have any public comments now. Wait until the blade is against your neck and then let’s have a public hearing.’ ”

The next regularly scheduled business meeting of the CPUC is Wednesday. Conklin is encouraging SDG&E customers to contact the CPUC by Tuesday to ask for a hearing in San Diego County.

At some point after that, the CPUC is expected to rule on the hearing request, spokesperson Terrie Prosper said. The public can register their opinion by contacting the CPUC Public Adviser at:

Telephone: 866-849-8391 or 213-576-7055
Email: public.advisor.la@cpuc.ca.gov
Postal Service: CPUC Public Adviser, 320 West 4th Street Suite 500, Los Angeles, CA 90013.

Mike G January 27, 2012 at 11:18 PM
Alas, there is no sense in getting wrapped around the axle on this issue. The CPUC is just a rubber stamp for the utilities. SDG&E et al will get what they want one way or another. The rate payers take it up the butt so the stock holders don't get hurt. Is this your first day in San Diego? It's always been this way and as long as utilities and commodities are 'free market' corporations it always will be. If you were here in the '70's you'll remember that our unofficial motto was, "Welcome to San Diego, Owned and Operated by SDG&E". Nothing has changed folks.
Dick Pilgrim January 28, 2012 at 12:03 AM
I like the comment "She said the idea is that if a utility collects more money than is needed, it gives it back to ratepayers, and if it doesn’t collect enough to cover costs, it passes those costs along to customers." Now which of those two possibilities do you think will always occur? Has SDG&E ever collected more money than is needed? If so, it can usually be absorbed by executive compensation and stock dividends. Some of you who have been in SD County since the 80's may recall that when SDG&Es franchise was up back then, a County Supervisor, now deceased, proposed that it become a public utility like LA's DWP but the franchise was renewed instead. Doesn't the free market incorporate a risk & return element that is missing from SDG&E's position?
LemonGroove January 28, 2012 at 12:17 AM
Mike G please don't ever run for office because it's people with your attitude that keep the good ol' boy network going and we have enough of these type of people in office now. I've been here since 1966 and we have another motto here, "Welcome to San Diego, now leave". If you don't try to get something done, then you are just part of the problem.
Mitchell D. McKay January 28, 2012 at 12:31 AM
This is the same outfit that was encouraging use of solar energy for years and turns right around and is now charging people who installed those expensive solar panel systems to sell their solar energy back to the Utility (at lower than market prices) and then the Utility bandits "re-distribute" it to other customers at a higher rate....isn't that the American way?!?!?!
LemonGroove January 28, 2012 at 12:53 AM
With the help of Diane Jacob, and everyone who emailed and called the CPUC, that solar energy use rate hike isn't going to happen anytime soon. It may eventually happen, but not right now.


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