Utility Company Thwarted After Trying To Shift Calif. Fire Expenses To Customers

Dec 1, 2017

Who pays for wildfire damage?

Some utility companies are saying "not I."

The San Diego Gas and Electric Company, an investor-owned utility, argued to the California Public Utilities Commission that they should be able to shift some wildfire expenses onto customers. The commission denied their request Thursday.

The company hoped to recover $379 million in damages from ratepayers - a sum owed on top of settled lawsuits and other damages covered by insurance. They would have charged residents $1.67 cents extra per month over six years.

The commission ruled against that option, citing that SDG & E mismanaged its facilities leading up to the fires.

Elizabeth Echols, director of California's Office of Ratepayer Advocates, says the decision is good news for consumers.

"[Utilities] must be held accountable," she said. "They cannot pass along the costs to ratepayers when they’re found to be at fault in what happened."

The case had to do with three different wildfires in 2007. The commission investigated SDG & E's responsibility in all of them. 

In the aftermath of recent Northern California wildfires, Echols said there will likely be a debate at some point about who pays the cost for damages.

In October, the Pacific Gas and Electric Company filed a brief in support of the SDG & E case, citing that utilities should not have to shoulder all the costs after a catastrophe. 

California officials are investigating PG & E's role in the recent fires. The company has filed an application with CPUC for a Wildfire Expense Memorandum Account to track wildfire costs. 

"Wildfires and the way they are treated currently have real world and potentially long-term impacts on the operations, risk management and financial standing of every energy company in the state," reads an e-mail statement from the company. 

Commissioners said that every case regarding wildfire cost needs to be analyzed individually. 

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