SDG&E May Seek $500M From Customers for Wildfire Costs

SDG&E May Seek $500M From Customers for Wildfire Costs

21 February 2012

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USA — In the years since the 2007 wildfires in San Diego County, consumer advocates and power companies have debated over who should be held responsible for the damage.

On Monday, the Utility Consumers Action Network (UCAN) held a press conference too address SDG&E’s recent request for financial protection.

Groups like UCAN believe SDG&E’s downed power lines caused much of the damage in the fires, and say the power company should be held financially responsible.

Fire authorities estimate the fires claimed about 1,300 homes.

SDG&E is currently looking for half a billion dollars in damage expenses from its customers.

UCAN filed with the Public Utilities Commission (PUC) to intervene the financial protection that SDG&E requested.

SDG&E’s parent company, Sempra Energy, has been telling Wall Street that it expects the cost of the utility’s liability for 2007 wildfire damages will be put on the ratepayers, not shareholders.

SDG&E said the company vastly upgraded the fire-safety of its grid, but still can’t get enough insurance coverage. And if investors were billed for losses, it would hurt the company’s credit ratings and financial health.

However, UCAN calls the scheme “greed and excess” — a “blank check” that will fall on customers retroactively and going forward.

The loss amount cited for the 2007 wildfires, 463 million dollars, would work out to 356 dollars for the average ratepayer — more for big customers, less for household customers.

In a statement issued Monday morning, SDG&E emphasized that it’s not actually seeking a ratepayer bailout in this request to the PUC, just a framework for doing so at a future proceeding where witnesses from all sides can present their cases.

The company says PUC has “historically” allowed recovery of liability losses as a “cost of serving all customers” including those in fire-prone areas.

“We’re simply seeking the opportunity to treat 2007 wildfire costs like the costs from any future wildfires, and to have the ability to seek rate recovery of such costs through a future application,” said Stephanie Donovan, spokeswoman for SDG&E.

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