CPUC Opens Rulemaking to Consider Funding for Legislature’s Wildfire Fund

At a special voting meeting the California Public Utilities Commission (CPUC) today (Friday July 26, 2019) voted to open a new rulemaking to consider authorization of a utility bill surcharge to fund the California Wildfire Fund recently created through enactment of Assembly Bill 1054.

As part of a package of measures aimed at addressing wildfire costs and the looming possibility of more utility bankruptcies, the Wildfire Fund would pay eligible claims from wildfires caused by electric utility infrastructures, subject to conditions. Recognizing the significant cost of covering Wildfire Fund liabilities, AB 1054 required the CPUC to consider establishment of a non-bypassable charge on utility ratepayers to help pay for wildfire compensation costs.

The rulemaking does not approve a specific funding mechanism, but adopts an accelerated schedule for consideration of:

• Whether it is appropriate for the CPUC to exercise its authority under Public Utilities Code Section 701 to require California investor-owned utilities to support the Wildfire Fund, including payment of bonds issued pursuant to Section 80500 et seq. of the Water Code.
• Whether imposition of the Wildfire Fund non-bypassable charge is just and reasonable.
• The estimated dollar amount of the revenue requirement referred to in Section 3289 of the Public Utilities Code.
• The nature of the Commission’s agreement with the Department of Water Resources pursuant to Water Code Section 80524(b).
• Other issues relating to the Wildfire Fund non-bypassable charge that must be addressed before the Wildfire Fund non-bypassable charge may be imposed.

Since AB 1054 required action within 90 days, the CPUC has set an expedited schedule, and the OIR indicates that comment periods may be shortened in order to meet the Legislature’s deadline. A prehearing conference is scheduled for August 8. Opening comments are due August 22, reply comments on August 29, and the CPUC aims to issue a proposed decision in September.

If the CPUC adopts a new customer charge in this rulemaking proceeding, the process for determining the charges will be addressed in a subsequent proceeding.

Ellison Schneider Harris & Donlan attorneys are following this proceeding and other regulatory proceedings related to the California Wildfires and wildfire cost recovery. For more information, contact Andy Brown, Samantha Neumyer, Lynn Haug or Ron Liebert.