SB 1088: Safety, reliability, and resiliency planning: general rate case cycle.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations and gas corporations. Existing law authorizes the commission, after a hearing, to require every public utility to construct, maintain, and operate its line, plant, system, equipment, apparatus, tracks, and premises in a manner so as to promote and safeguard the health and safety of its employees, passengers, customers, and the public. Existing law requires electrical corporations to annually prepare and submit a wildfire mitigation plan to the commission for review. Existing law requires the commission to establish standards for disaster and emergency preparedness plans, as specified, and requires an electrical corporation to develop, adopt, and update an emergency and disaster preparedness plan, as specified.

The California Emergency Services Act, among other things, establishes the Office of Emergency Services for the purpose of mitigating the effects of natural, manmade, or war-caused emergencies and makes findings and declarations relating to ensuring that preparation within the state will be adequate to deal with those emergencies.

This bill would require the office, in consultation with specified public entities, by September 30, 2019, to adopt standards for reducing risks from a major event, as defined. The bill would require those standards to include model policies that may be undertaken by local governments regarding, among other things, defensible space, and actions that may be undertaken by an electrical or gas corporation, a local publicly owned electric or gas utility, or a water utility to reduce the risk of fire occurring during a major event. The bill would require the office to update the standards at least once every 2 years.

This bill would require an electrical or gas corporation, on or before July 1, 2019, and every July 1 every two years thereafter, to submit to the commission an application for review and approval of a safety, reliability, and resiliency plan that includes certain elements. The bill would require the commission, no more than 18 months after the submission of the plan, to approve the plan with or without modification. The bill would require the commission to authorize recovery of the costs of implementing the plan through rates, as provided. The bill would require the commission to conduct an annual proceeding to review each electrical corporations and gas corporations compliance with its plan, as provided. If, after completing the compliance review, the commission determines that an electrical corporation or gas corporation is in substantial compliance with its plan, the bill would authorize the commission to find the performance, operations, management, and investment addressed in the plan to be reasonable and prudent, as specified. The bill would require the commission to assess a penalty on an electrical corporation or gas corporation for noncompliance with its plan. The bill would, except as provided, prohibit an electrical corporation from delegating, transferring, or contracting out any of its distribution system safety or reliability performance obligations, except as specified.

Existing law authorizes the commission to fix the rates and charges for public utilities, including electrical or gas corporations, and requires the rates and charges to be just and reasonable. Under its existing regulatory authority, the commission uses a general rate case to address the costs of operating and maintaining the systems of public utilities and the allocation of those cost among the public utilities customer classes. The commission has used a 3-year general rate case cycle, in which electrical or gas corporations file a general rate case application with the commission every 36 months.

This bill would explicitly authorize the commission to extend the general rate case cycle to 4 years.