June 18, 2018 Honorable Jerry Brown Governor, State of California State Capitol Building, 1st floor Sacramento, CA 95814
Honorable Toni Atkins Senate President pro Tempore State Capitol, Room 205 Sacramento, CA 95814
Honorable Anthony Rendon Assembly Speaker State Capitol, Room 219 Sacramento, CA 95814
Honorable Patricia Bates Senate Minority Leader State Capitol, Room 305 Sacramento, CA 95814
Honorable Brian Dahle Assembly Minority Leader State Capitol, Room 3104 Sacramento, CA 95814 RE: Utility Wildfire Liability Issues; Process and Electric Customer Risks Governor Brown and Legislative Leaders: This communication is on behalf of major California electric utility ratepayer interests including The Utility Reform Network (TURN), California Manufacturers and Technology Association (CMTA), California Farm Bureau Federation (CFBF), Agricultural Energy Consumers Association (AECA), California League of Food Producers (CLFP), California Large Energy Consumers Association (CLECA) and Western States Petroleum Association (WSPA). Electric costs already represent a significant burden on the finances of all classes of California ratepayers: residential, agricultural, commercial (large and small) and industrial electric customers alike. Decision makers must appreciate that electric ratepayers simply cannot afford the added costs of property damage caused by utility wildfires. This is especially important when ratepayers will be called upon to pay for removing dead trees, undergrounding lines, hardening poles and other measures designed to reduce the number and destruction caused by future wildfires. An open, deliberative discussion of wildfire liability and management is required before actions by this Legislature impose additional costs on utility customers, large and small. A range of solutions should be considered as alternatives to rendering already financially strained electric utility customers the “insurers of last resort” for the utility industry. A full understanding of options available for all interests will lead to more sustainable solutions. Considered alternatives must include: (a) the issue of shareholder responsibility for management decisions related to the level of insurance and the condition of the transmission and distribution systems; (b) alternative funding options to address catastrophic loss, including securitization or other actions to mitigate rate impacts; and (c) a critical, fully vetted review process to carefully evaluate such options. An open, deliberative discussion of wildfire liability and management issues,
including the potential impact on rates is needed. Before any financial solution is adopted, there should be a clear and verifiable understanding of the costs and risks associated with past and future wildfires. The undersigned major ratepayer interests join together to emphasize that California’s energy rates, already excessive, would be further exacerbated by a less than critical analysis of the costs and proper responsibility of parties involved. Piling on costs that are not carefully evaluated is simply untenable. Any legislative solution should continue to direct the California Public Utilities Commission (CPUC) to incorporate safety within the General Rate Case process and maintain its oversight over just and reasonable rates for all ratepayer classes. This communication seeks a commitment of policymakers to protect the interest of ratepayers, not the interests of utility shareholders.
Signed, _____/s/_____ Mark Toney Executive Director, The Utility Reform Network _____/s/_____ Dorothy Rothrock President, California Manufacturers and Technology Association _____/s/_____ Karen Mills Senior Attorney, California Farm Bureau Federation _____/s/_____ Michael Boccadoro Executive Director, Agricultural Energy Consumers Association _____/s/_____ Trudi Hughes Director of Government Affairs, California League of Food Producers _____/s/_____ Nora Sheriff Counsel, California Large Energy Consumers Association _____/s/_____ Catherine Reheis-Boyd President, Western States Petroleum Association
