Emotions raw over SDG&E proposal to raise rates after 2007 wildfires

Jan. 10--San Diego Gas & Electric wants to increase rates by $379 million to recover the remainder of costs the utility racked up from a series of deadly wildfires that scorched San Diego County in 2007.

But the proposal received emotional opposition Monday in Escondido.

"This is a picture of our house burning," said Joann Kling, her voice breaking. "SDG&E has to pay, not the ratepayers who were victimized."

Kling was one of dozens of speakers addressing representatives of the California Public Utilities Commission (CPUC), which hosted a jam-packed hearing at the California Center for the Arts Conference Center.

The Witch, Rice and Guejito fires in October 2007 killed two and destroyed more than 1,300 buildings.

The CPUC hearing, which started at 2 p.m. and included an evening session, was designed to allow two administrative law judges get input for a recommendation they will give to the commission at large.

The CPUC's five commissioners will eventually make a ruling whether SDG&E's operations leading up to the devastating fires were reasonable.

One commissioner, Liane Randolph, attended Monday's hearing.

"I'm here to listen," Randolph told the Union-Tribune during a break in the often angry testimony.

"They want to spit in our face," said Janice Shaffer, whose home above Lake Hodges was destroyed.

SDG&E has estimated the average ratepayer would pay $1.67 more per month if costs are spread out over a six-year period.

SDGE&E vice president of electric transmission and system engineering Dave Geier said the evacuation efforts that rescued homeowners included SDG&E employees. The wildfires were fueled by dry conditions and Santa Ana winds that reached hurricane-force of more than 90 mph that stymied firefighting efforts.

"The damage of those fires was outside of our control," Geier said.

"We had no reason to know that those fires would occur on that day in those potential locations and those circumstances. Trust me, if we did we would have done everything possible to make sure those fires didn't happen."

SDG&E officials say their company followed industry standards and point out that California courts have ruled utilities can spread their costs of damages.

"I believe we're going to put testimony in place showing we operate our systems safely, we designed and engineered it safely and we maintained it and inspected it," Geier said.

In the wake of the fires, SDG&E has expanded its weather sensor network to 144 weather stations throughout its service area and made investments in firefighting ranging from heli-tankers that can carry 2,650 gallons of water or fire suppressants to replacing 2,100 existing wood poles with steel poles.

The company has not admitted negligence related to the wildfires but Geier said, "We do understand the impact on lives in this fire and we are truly sorry."

The Office of Ratepayers Advocates (ORA), the independent consumer advocate arm of the CPUC has come out against the SDG&E application.

"SDG&E failed to manage their facility reasonably," said Nils Stannick, utilities engineer at ORA.

The utility had $1.1 billion of liability insurance in place in 2007, which SDG&E officials say was the maximum amount they could obtain.

That didn't persuade most in the audience.

"Fires are nothing new," said Tina Iki of Escondido, who was a friend of the two people who died in the 2007 blaze. "We are paying SDG&E to make sure we are prepared to prevent this."

Prior CPUC decisions indicate that a "reasonableness" standard should be enforced in determining whether a utility is entitled to cost recovery.

Factors for the commission to consider is "competent management," best practices and employees performing their jobs properly.

"SDG&E should not be compensated on the backs of ratepayers for its poor behavior leading up to and after the 2007 fires," said Diane Conklin, spokesperson for the Mussey Grade Road Alliance.

Geier said "safety has been and always will be the top priority at SDG&E."

A 2008 investigation by the CPUC determined the Witch and Rice Canyon fires were caused by sparks from downed wires and the Guejito fire was caused when a lashing wire owned by Cox Communications hit an SDG&E power line.

The CPUC blamed poor maintenance for the sparking of all three fires.

Monday's hearing comes in advance of an evidentiary hearing scheduled for later this month in San Francisco, where the CPUC is based.

The two administrative law judges will eventually make a recommendation to the CPUC's five commissioners who are free to decide whether to accept, reject or alter any recommendation.

rob.nikolewski@sduniontribune.com

(619) 293-1251 Twitter: @robnikolewski

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