SDG&E denied rate increase to pay for 2007 San Diego wildfires

Posted at 6:25 AM, Nov 30, 2017
and last updated 2017-11-30 20:49:28-05

SAN DIEGO (KGTV) – The California Public Utilities Commission denied a push to have San Diego County residents foot the bill for damage caused by the 2007 wildfires.

The CPUC ruled against San Diego Gas & Electric to increase ratepayers' bills by an average of $1.67 per month over the next six years to pay for wildfire damages.

Following the ruling, SDG&E Vice President Chief Regulatory Officer Lee Schavrien said the company, "will vigorously pursue all available avenues to overturn this decision."

The 2007 county wildfires, which included the Witch, Guejito and Rice fires, burned nearly one million acres and destroyed more than 1,500 homes. The fires killed two people, injured 40 firefighters and forced tens of thousands of people to seek shelter at Qualcomm Stadium.

Some people believe the fires were started by SDG&E power lines knocked down by high winds, and many say SDG&E and its shareholders should have to pay the $379 million cost.

Robin Kaufman, who lost her home in the wildfires, said, "We shouldn't have to pay for something they caused. They caused the fire and it's been proven a number of times now."

SDG&E has argued the wildfires were an unprecedented event at the time and they acted reasonably in terms of safety, though many safeguards have been added since then.

Schavrien's full statement criticized the ruling, saying the CPUC "adopted a flawed interpretation" of the law:

“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.