Media Statement on Wildfire Cost Recovery

On November 30, 2017, the California Public Utilities Commission (CPUC) issued a final decision denying in full, the recovery of expenses requested in the Wildfire Expense Memorandum Account proceeding. In response, Lee Schavrien, San Diego Gas & Electric’s (SDG&E) senior vice president and chief regulatory officer issued the following media statement:

“SDG&E strongly disagrees with today’s decision. The CPUC got it wrong. The 2007 wildfires were a natural disaster fueled by extreme conditions including the worst Santa Ana wind event this region has ever seen, combined with high heat, low humidity and hurricane-force winds as high as 92 mph. Experts from Cal Fire and the County Office of Emergency Services described the weather as ‘unprecedented [in] magnitude,’ and ‘wind conditions being the worst they had ever seen in recent memory.’

“This decision is not supported by the evidence and is not consistent with the determination made by the Federal Energy Regulatory Commission (FERC). FERC conducted its own inquiry and found SDG&E acted reasonably and approved the FERC-jurisdictional portion of the wildfire cost request. We find it difficult to understand how federal regulators understood the law and applied it appropriately, while the CPUC adopted a flawed interpretation.

“The decision wrongly concludes that the applicability of inverse condemnation by California courts to privately owned public utilities is irrelevant. Under inverse condemnation, a utility is strictly liable, regardless of fault or foreseeability, if its facilities are involved in an ignition. Courts apply inverse condemnation to utilities on the grounds that utilities can spread the costs through rates, but this decision has failed to recognize or acknowledge the role inverse condemnation played in the incurrence of the costs and has failed to allow SDG&E to spread the costs as the courts envisioned.

“We will vigorously pursue all available avenues to overturn this decision.“