SDG&E WANTS RATEPAYERS TO PAY FOR ITS WILDFIRE LIABILITY COSTS: FIRE VICTIMS ASK PUBLIC TO URGE CPUC TO HOLD HEARING IN SAN DIEGO
By Miriam Raftery
January 19, 2012 (Ramona) – In hearings last week in San Francisco before the California Public Utilities Commission (CPUC), SDG&E revealed that it wants to charge San Diego County ratepayers nearly half a billion dollars to recoup the utility’s uninsured costs for settling claims involving the 2007 Witch Creek, Guejito and Rice Canyon wildfires. The utility seeks to establish a Wildfire Expense Balancing Account (WEBA)—a plan that has outraged some local fire victims.
Now they're fighting back--and asking the public for help before February 1 to persuade the CPUC to hold a public participation hearing in San Diego.
“We want a public hearing in San Diego so the public knows what’s up in San Francisco and can tell the Comission, `no way’,” Diane Conklin, founder of the Mussey Grade Road Alliance (MGRA) told East County Magazine.
MGRA, a Ramona-based citizens group that includes many local fire victims, has filed a motion seeking a public participation hearing in San Diego County. They want the CPUC to issue a ruling by February 1. The group urges the public to contact CPUC Commissioner Simon to ask that the motion for a public participation hearing regarding A.09-08-020 be approved. (See contact information at the bottom of this story.)
Conklin, a survivor of the 2003 Cedar Fire who saw Ramona again ravaged by the 2007 Witch Creek fire, is outraged that SDG&E wants to charge ratepayers—including fire victims—for fires that the CPUC concluded were caused by arcing from SDG&E’s own poorly maintained lines. The Witch Creek, Guejito and Rice Canyon wildfires collectively destroyed 1,350 homes in San Diego County and killed two people. SDG&E and its insurance company paid out hundreds of millions of dollars to settle claims over the fires, without admitting guilt.
Some fire victims have complained that the settlements amounted to a slap on the risk for SDG&E, with amounts inadequate to fully compensate them for their losses.
SDG&E, in a rebuttal filed with the CPUC, claims that arguments by opponents of the plan “would leave the utilities exposed to massive wildfire costs with no established provisions for recovery.” Such uncertainty “threatens the financial health of the utilities, both now and in the future,” SDG&E claims.
That seems a stretch, given that Sempra Energy, SDG&E’s parent corporation, saw its comparative total returns for shareholders skyrocket 208% in 2010. As for SDG&E, the company reported earnings of $369 million in 2010, up from $344 million in 2009 and $339 million in 2008.
Critics say that Sempra should absorb the losses out of the company’s hefty profit margins. They ask: Why shouldn’t stockholders pay the costs of wildfires caused by SDG&E’s failure to maintain its lines, instead of demanding that ratepayers foot the bill?
SDG&E seeks $62 million for costs it has already paid out, and that were not covered by its insurance. In addition, however, SDG&E projects additional costs and has informed the CPUC that it seeks a total of $463.9 million from ratepayers for the 2007 fires. The company has told its shareholders that it considers full recover of 2007 fire costs a “probable outcome.”
Conklin, in a motion filed with the CPUC, observes that “Because the potential costs to SDG&E ratepayers amount to hundreds of millions of dollars the issue of the participation of the public in this application is urgent and crucial.” She noted that public is unaware of SDG&E’s plan to charge ratepayers for wildfire payouts and has warned that the $463 million charge could be just the beginning, as it would establish a precedent for the utility to charge the public every time a disaster is caused by its own actions. Conklin stated that “The Commissino risks being tarred with charges of collusion if it ‘greases the skids’ for the rapid disposition of this proceeding without public comment after such recent dramatic revelations on the part of SDG&E.”
Critics of the plan have also voiced concerns that allowing utilities to fully recoup such costs could eliminate incentives to keep lines safe, since SDG&E could simply pass along its liability costs to ratepayers. SDG&E has denied that safety would be adversely affected.
Conklin is urging concerned ratepayers to contact CPUC Commissioner Simon immediately and ask that a public hearing be held in San Diego. To contact Commissioner Simon's office, call 415-703-1407 , e-mail TAS@cpuc.ca.gov or fax (415)703-1294. She also requests those who contact the Commissioner to notify Conklin at email@example.com