BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Transcription

1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Pacific Gas and Electric Company for Authority to Establish the Wildfire Expense Memorandum Account. (U39E) Application (Filed July 26, 2017) REPLY COMMENTS OF THE UTILITY REFORM NETWORK ON THE PROPOSED DECISION AND ALTERNATE PROPOSED DECISION ON APPLICATION OF PACIFIC GAS AND ELETRIC COMPANY FOR AUTHORITY TO ESTABLISH THE WILDWIRE EXPENSE MEMORANDUM ACCOUNT Thomas J. Long, Legal Director The Utility Reform Network 785 Market Street, Suite 1400 San Francisco, CA (415) x303 (office) (415) (fax) David Cheng, Staff Attorney The Utility Reform Network th Ave, Ste. 810 San Diego, CA (619) x103 June 11, 2018

2 TABLE OF CONTENTS I. REPLY TO COMMENTS OF PG&E... 1 A. PG&E s Request to Broaden the Scope of the WEMA Highlights the Need to Limit the WEMA to a Specific Event II. REPLY TO COMMENTS OF THE JOINT UTILITIES... 2 A. The Commission Should Give No Weight to the Joint Utilities Incorrect Assertion that the PD and APD Recognize that Wildfire Costs Incurred by PG&E Have Not Been Included in General Rate Case Forecasts III. CONCLUSION... 3 i

3 REPLY COMMENTS OF THE UTILITY REFORM NETWORK ON THE PROPOSED DECISION AND ALTERNATE PROPOSED DECISION ON APPLICATION OF PACIFIC GAS AND ELETRIC COMPANY FOR AUTHORITY TO ESTABLISH THE WILDWIRE EXPENSE MEMORANDUM ACCOUNT Pursuant to Rule 14.3 of the Commission s Rules of Practice and Procedure ( Rule ), The Utility Reform Network ( TURN ) files these reply comments in response to opening comments by Southern California Edison Company ( SCE ) and San Diego Gas and Electric Company ( SDG&E ) (together, the Joint Utilities ) and Pacific Gas and Electric Company ( PG&E ) on the Proposed Decision ( PD ) of Administrative Law Judge Peter V. Allen and Alternate Proposed Decision ( APD ) of Commissioner Liane M. Randolph on Application of PG&E for authority to establish the Wildfire Expense Memorandum Account ( WEMA ). I. REPLY TO COMMENTS OF PG&E A. PG&E s Request to Broaden the Scope of the WEMA Highlights the Need to Limit the WEMA to a Specific Event. PG&E requests that the Commission modify the PD and APD to create a WEMA that is even more open-ended than what was contemplated by the PD and APD. 1 Both the PD and APD authorize the creation of an ongoing WEMA but require that the tracked costs be segregated by event. 2 However, PG&E requests that it be allowed to record costs that are not specific to an event, such as insurance premiums, in the WEMA. This is contrary to PG&E s earlier assertion that it would implement procedures to track costs on an event-by-event basis, segregating costs by event, so that the Commission would be able to review costs separately for particular events. 3 Both the PD and APD acknowledged that PG&E s assertion that it could track costs on an eventby-event basis was a prerequisite for an ongoing WEMA. 4 PG&E s new request is all the more reason for the Commission to authorize an event-specific WEMA instead of an ongoing WEMA. An ongoing WEMA increases the potential for PG&E to treat the WEMA as an open-ended 1 PG&E Opening Comments on PD and APD, p PD, pp. 7 8; APD pp PG&E Opening Brief, pp PD, p. 6; APD, p. 6. 1

4 invitation to record any costs that are remotely related to wildfires in the WEMA instead of costs related to specific wildfire events as originally contemplated. In this regard, it is notable that PG&E indicates that insurance premiums are just one example of costs not specific to a wildfire event that it wishes to record to the WEMA. 5 TURN urges the Commission to not allow PG&E to unilaterally broaden the relief that the Commission is approving in this decision and explicitly reject PG&E s request to record costs that are not specific to wildfire events to the WEMA. TURN also reiterates its earlier recommendation that the PD and APD be modified to authorize an event-specific WEMA instead of an ongoing WEMA. II. REPLY TO COMMENTS OF THE JOINT UTILITIES A. The Commission Should Give No Weight to the Joint Utilities Incorrect Assertion that the PD and APD Recognize that Wildfire Costs Incurred by PG&E Have Not Been Included in General Rate Case Forecasts. The Joint Utilities claim that the PD and APD recognize that PG&E has incurred wildfire liability-relate costs, and that such costs have not been included in general rate case forecasts. 6 This statement by the Joint Utilities is without support and incorrect. Unsurprisingly, the Joint Utilities also fail to provide a citation for this statement since the PD and APD clearly state otherwise. The PD and APD both state that the issue of whether these costs are incremental and not already addressed in a general rate case ( GRC ) should be considered in a future cost recovery proceeding. 7 Neither the PD nor the APD prejudge that these costs are incremental and have not been included in general rate case forecasts. As TURN pointed out previously, PG&E s PG&E Opening Comments on PD and APD, p. 6, referencing WEMA-eligible costs that may not be specific to a particular wildfire event, such as insurance premiums not in rates.... (emphasis added). As discussed above, the implication of PG&E s sentence, that insurance premiums are WEMA-eligible is not consistent with PG&E s previous statements to the Commission or the PD and APD. If nonwildfire event specific costs such as insurance premiums are WEMA-eligible, then what s to stop PG&E from booking other costs, such as costs to pressure the Legislature and CPUC for changes to wildfire liability and recovery rules? TURN submits that such non-event-specific costs range well beyond the relief that the Commission has contemplated in this case to date. 6 Joint Utilities Opening Comments on PD and APD, p PD, pp. 8 9; APD, pp

5 GRC considered [c]oncerns about wildfire risk, particularly in light of the drought and California s legal environment related to strict liability and inverse condemnation when estimating insurance costs. 8 However, TURN was willing to accept PG&E s position that the issue of incrementality should be preserved for any future application. 9 Thus, the Commission should give no weight to the Joint Utilities incorrect assertion that the PD and APD recognize that wildfire costs incurred by PG&E have not been included in GRC forecasts. As appropriately stated by both the PD and APD, the issue of which costs are incremental should be addressed in a future cost recovery proceeding. III. CONCLUSION For the reasons set forth above and in the opening comments of TURN and ORA, the Commission should: (1) reject PG&E s request to record costs that are not specific to wildfire events to the WEMA; (2) modify the PD and APD to authorize an event-specific WEMA instead of an ongoing WEMA; (3) adopt the PD s determination that the WEMA should be effective as of the date of the Commission s decision; and (4) give no weight to the Joint Utilities incorrect assertion that the PD and APD recognize that wildfire costs incurred by PG&E have not been included in GRC forecasts. Dated: June 11, 2018 Respectfully submitted, By: /s/ David Cheng David Cheng, Staff Attorney THE UTILITY REFORM NETWORK th Ave, Ste. 810 San Diego, CA (619) x103 DCheng@turn.org 8 TURN Opening Brief, p. 6, citing A , Ex. PGE-9, pp TURN Opening Brief, p. 6. 3