Assembly Standing Committee on Utilities and Energy

We do not have a quorum right now, so we're going to go ahead and begin. Well, look at that. We do not have a quorum, but we'll go ahead and begin as a Subcommitee. Let's see. We have two measures on the agenda. One is on consent.

We'll go ahead and move to item number two, which is SB 1003 by Senator Dodd. Our colleague, Assemblymember Bauer-Kahan, will be presenting on behalf of the Senator. Assemblymember, when you're ready. Assemblymember, we did just get quorum, so I think we will pause for a moment to take the role in established quorum.

[Roll Call]

All right. Assemblymember.

Thank you, Madam Chair. I know I'm not the Member from Napa and I don't have his wine collection, but I'm honored to present on behalf of Senator Dodd. As amended this week, SB 1003 is focused on evolving the utility wildfire mitigation regulatory construct between the CPUC and OEIS.

This largely means improving process efficiencies within and between both agencies, ensuring both agencies are driving greater utility wildfire risk reduction behavior and investments at the least cost to ratepayers.

The proposed statutory modifications do the following: clarify that OEIS is a utility wildfire mitigation expert, Auditor, and evaluator and that the CPUC is the economic and safety compliance and enforcement regulator. Ensure that the WMPs are reducing wildfire risk through improved utility performance oversight.

Link the wildfire mitigation plans to the primary investment cost recovery approval process of the CPUC, better known as the general rate case.

Add a cost-effectiveness lens to a proposed utility wildfire mitigation member in measures in the wildfire mitigation plans, clean up utility wildfire mitigation cost recovery processes, memorandum accounts, and applications for forecasted costs, and strike legacy and outdated provisions that were designed for when OEIS was the wildfire safety vision within the CPU seat.

With that, I will turn it over to our witnesses who are here in support.

Thank you. My name is Katy Morsony I'm an attorney with the Utility Reform Network and advocate for California's residential ratepayers at the CPUC. TURN believes that utility ratepayers do not need to sacrifice their safety or reliability for affordable rates.

Turn strongly supports SB 1003, as amended. As amended, the Bill makes meaningful changes to the review, approval, and oversight of the wildfire mitigation plans. The Bill requires reliance on existing CPUC cost-benefit ratios to consider the cost efficiency of proposed mitigations. These are powerful tools.

For example, in PG and E's 2023 general rate case, the utility requested $6 billion for 2000 miles of underground using the CPUC's cost-effectiveness measure. TURN demonstrated that by relying more extensively on insulated power lines, the utility could achieve similar risk reductions for $2.1 billion.

Utilities will also be required to take into account the speed with which mitigations are deployed and the risk reduced for the cost of the mitigation.

SB 1003 clarifies that the wildfire mitigation plan is only approved once the Commission has determined that the cost of the plan is just and reasonable within the context of all utility spending proposals in their general rate case. This enables the Commission and stakeholders to better understand the balancing required to maintain affordable rates.

SB 1003 will result in fiscal discipline by authorizing memorandum accounts only for those costs that are unforeseen and incremental to the revenue requirement adopted by the Commission. This will lower costs and the administrative burden of today's frequent cost recovery cases. TURN respectfully requests your aye vote.

Hello Chairman, Chair Petrie-Norris and Members, I'm Tara Diaz from the Public Advocates Office. I'm here to express our support for SB 1003 and as amended, because it would enhance oversight of utility safety and transparency regarding the cost of wildfire mitigation work.

SB 1003 will adjust the regulatory framework for how the state reviews and oversees the utility's wildfire mitigation efforts. By bringing much needed alignment between the utilities wildfire mitigation plans and utilities overall budgets. SB 1003 makes several important changes in this regard.

The Bill aligns the utilities wildfire mitigation plans, which they file with the Office of Energy Infrastructure Safety, with the risk management, risk assessments of all aspects of utility safety which they file at PUC.

This alignment ensures that while wildfire mitigation is prioritized, it is also considered in the broader context of all other critical safety risks foreseen by the utilities. SB 1003 also synchronizes the timelines for the wildfire mitigation plans with the general rate case process, which will facilitate a direct comparison of wildfire mitigation costs with other utility expenditures.

This change in timing means that the PUC can approve funding levels based on a more comprehensive set of facts and information, thereby enhancing ratepayers protections. This Bill also expands the role of the Office of Energy infrastructure safety in conducting field audits and performance assessments which build on the agency's excellent work in this area.

Their audits have helped highlight areas of improvement in the work and utilities performed with repair funds. Additionally, the Bill mandates the utilities include the speed of implementation as a criteria in their wildfire mitigation plans. This requirement will help accurately weigh the benefits of effective and fast-to-implement mitigations such as covered conductor and fast trip technologies.

With that, we respectfully request your aye vote. Thank you.

Thank you. Are there additional witnesses and support in the room? You can go ahead and approach the microphone at this time.

Thank you, Madam Chair and Members, Jason Ikerd, on behalf of the California Municipal Utilities Association, happy to be here in support.

Margie Lie, on behalf of the Southern California Public Power Authority, in support.

Thank you.

Rebecca Marcus, representing Calperg and the Union of Concerned Scientists. Thank you.

Brandon Ebek, Pacific Gas and Electric. I feel like it's appropriate to go now because we do not oppose the Bill. We do not have a position. We very much want to just communicate appreciation for the author, not on just this Bill, but the prior work on this Bill, we were, had concerns with the original version.

We still have some concerns about the Bill in print and how it's going to play out in the next five years until we transition for PG and E to the new paradigm. There's a lot of benefits.

A tweener. All right.

There's certainly a lot of benefits to the new structure.

We got to keep. We got to let the next person go.

He's going to say the same thing.

Ok. So no, if you're not the primary witness in support or opposition. We understand you have some concerns. Thank you.

Good evening, Madam Chair, Members. Brady Van Engelen here on behalf of Southern California Edison, just like to align my comments with Pacific Gas and Electric. We're not opposed at all. We do appreciate the work by Senator Dodd and this Committee and clarifying and look forward to working with the Committee and the implementation measures. Thanks.

Thank you. Okay. Now, witnesses in opposition. Okay. So. Are there, there's no witnesses? Okay. Yes. All right. Seeing and hearing none. I'll bring it back to the Committee for questions and comments.

Am I allowed to make a comment? I'm Committee Member and presenter.

Yes, you are. You can take off your presenter hat and put on your Committee Member hat.

Thank you, Madam Chair. I wanna say that I think what Senator Dodd is doing here is incredibly important. We have seen PG and E using the wildfire mitigation plans to go, I believe, beyond what is necessary to ensure a guaranteed rate of return on the infrastructure they're building.

And there really should be oversight to make sure they are making investments that we need and protecting ratepayers at the same time. And I think this does this, I'm concerned by the delayed implementation that PG and E will game it, to be frank with you, and get everything approved in advance of the implementation of this Bill.

So I hope we will watch out for that and ensure that we watch their spending.

All right. Any additional questions or comments from Committee Members? Seeing and hearing none. Assemblymember, would you like to close on behalf of Senator Dodd?

Senator Dodd respectfully asks you aye vote.

Thank you. Okay, motion is do pass to the floor. Madam Secretary, please call the roll.

SB 1003, do pass to the floor. [Roll Call]

120. That Bill is out. We'll leave the roll open for absent Members to add on. Moving to item number one, which is the consent calendar. Thank you. We have a motion in a second. All right, one item on the consent calendar. AB 1533. Madam Secretary, please call the roll.

[Roll Call]

Okay, 12- 0. The consent calendar is out, and we'll leave the roll open for absent Members to add on. All right, let's open the roll so that our returning Members may add on.

[Roll Call]

That's 14. Okay, that is 14-0. We will leave the roll open for absent Members to add on.

[Roll Call]

okay, 14-0. That Bill is out, but we'll leave the roll open for absent Members to add on. That's it. Thank you, gentlemen. It Okay, let's open that roll for our absent Members to add on.

[Roll Call]

All right, we are now at 14-0 for our consent item 15-0 for our consent. Item 15-0 for SB 1003. We did conclude our business at 6:30, so we'll be leaving the roll open until 645, should additional absent Members wish to add on it. All right, let's reopen the roll.

[Roll Call]

15-0 that Bill is out.

[Roll Call]

16-0 so, 16-0 for our consent, item AB 1533 and 16-0 for SB 1003. Those bills are out. That concludes today's business. We're adjourned.