SDG&E Wildfire Expense Memorandum Account (WEMA)

 

Background

On September 25, 2015, SDG&E filed an Application requesting CPUC approval to recover $379 million in wildfire damage costs to third parties, in excess of its insurance coverage. The wildfire costs resulted from the Witch, Guejito, and Rice fires in San Diego County in October 2007, which were ignited by SDG&E facilities. SDG&E originally settled over 2,000 lawsuits for more than $2.4 billion. The $379 million reflects the remaining costs after accounting for insurance coverage from other parties.   

In April 2016, the CPUC issued a Ruling setting the schedule and scope of the issues to be addressed in the proceeding, including: 

  • Whether SDG&E’s operation, engineering, and management of its facilities prior to the 2007 Wildfires were reasonable.  
      
  • Legal and policy questions regarding SDG&E’s right to recover the remaining costs associated with the wildfires.  

The CPUC determined that if it is necessary to address settling legal claims and whether SDG&E’s actions and decision-making in connection with settling of legal claims and costs in relation to the wildfires were reasonable, it will do so in a second phase of the proceeding.    


 

ORA Position

ORA performed a detailed analysis of SDG&E’s application and recommends that SDG&E’s request for ratepayers to fund $379 million in wildfire-related costs should be denied. 

ORA’s analysis determined:  

  • Witch Fire: SDG&E’s actions in response to issues with a high-voltage transmission line directly led to the ignition of the Witch Fire. Given the conditions in the area and the history of the line in question, SDG&E should have responded more quickly to reports of and concerns about contact between wires.
     
     
  • Guejito Fire: SDG&E failed to maintain the required distances between its power lines and communications lines owned by Cox Communications. SDG&E’s actions and poor inspection procedures directly led to the ignition of the Guejito Fire.
     
     
  • Rice Fire: SDG&E failed to heed the advice of a pre-trim inspector, who recommended that a sycamore tree be trimmed to avoid coming too close to a power line. The tree branch later broke, disrupting the line and causing the Rice Fire. 

Additionally, ORA determined that wind and environmental conditions at the time of the three fires were known local conditions for which SDG&E should have been prepared.
ORA finds that SDG&E failed to manage its facilities reasonably, directly leading to the ignition of the Witch, Guejito, and Rice fires. SDG&E’s actions since the 2007 wildfires do not excuse it from prior poor management. Accordingly, the CPUC should reject SDG&E’s Application.
  
 

See ORA’s: 

October 3, 2016 Testimony on SDG&E's WEMA Application. 

February 19, 2016  Joint PHC Statement proposing proceeding schedule.  

See ORA’s October 30, 2015 Protest on SDG&E’s WEMA Application.   

 

 

Proceeding Docket

See the CPUC Proceeding docket.  

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