Proposal would make users pay for utility damage


PG&E is joining two southern California utilities in asking state regulators for help in paying for damage caused by wildfires. They want their customers (known as ratepayers) to pick up the tab when repairs exceed insurance coverage.

Wildfires in 2007 in San Diego County exceeded the $1.1 billion covered by insurance.

"What they're asking is the ratepayer be essentially a gigantic insurance company for all the utilities up and down the state," ratepayer attorney Michael Aguirre said.

Although the proposal has been in the works for a year, suspicion was raised at a preliminary hearing today that PG&E might use this plan to pay for the San Bruno explosion and fire.

A PG&E attorney made a strong denial.

"The way our insurance is structured, that would not be considered a wildfire and it would not be covered in this proceeding," Lise Jordan said.

However, an attorney for the consumer advocacy group TURN remains skeptical.

"They haven't stated clearly on the record what is the definition of 'wildfire' that their insurance policies actually cover," Nina Suetake said.

Fact finding and public testimony are set for early next year.

One issue already identified by a state PUC attorney is whether the utilities will take safety shortcuts, knowing consumers will cover the bill.

"Such a mechanism could be a kind of perverse incentive whereby the utility would have backstop coverage by ratepayers and could then potentially not comply with safety rules that would be more expensive than accessing this kind of an account," Nicholas Sher said.

The state budget impasse has a direct impact on this case. The state PUC would like to move on this before the end of the year, but without a budget, it can't pay for outside contractors to analyze this case.

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