​CPUC Takes First Step in Reviewing Utility Undergrounding Rules

Four years ago the California Public Utilities Commission (CPUC) opened a rulemaking (R.17-05-010) to consider revisions to Electric Rule 20, the policy governing the undergrounding of investor-owned utility (IOU) electric wires. Numerous stakeholders participated, including local governments from around the state. This week the CPUC issued Decision 21-06-013, in Phase I of the rulemaking, instructing all of the IOUs to revise their undergrounding rules and take other steps to improve the administration of Rule 20 projects.

Rule 20 currently establishes four subprograms that provide diminishing levels of ratepayer contributions to undergrounding projects. In recent years the complex Rule 20A program, which provides the most generous subsidies, has been criticized for disproportionately helping a small handful of wealthier communities, project delays, and focusing more on aesthetics than safety and reliability. To begin addressing these issues, the decision addresses several specific Phase I issues.

First, the decision considers whether to modify, replace or discontinue the Rule 20A Program. Although numerous parties supported revising and expanding the existing Rule 20A eligibility criteria, the decision adopts only relatively minor changes, deferring further consideration for the more comprehensive review of Rule 20A now scheduled for Phase 2. Noting concerns about the practice of borrowing and trading “work credits” to fund multiyear (and often over-budget) projects, the CPUC ordered the IOUs to discontinue allocating work credits after December 31, 2022, and stop allowing communities to borrow work credits from future allocations beyond 2022. The CPUC will address the impact of ending work credit borrowing on existing projects “at the beginning of Phase 2.”

Second, the decision takes steps to address problems with program management and oversight. An audit of PG&E’s Rule 20A program had previously identified numerous “major issues” with program administration, including unexplained reprioritization of funds, lack of documentation, and routine underspending. In light of the PG&E audit, this week’s decision calls for additional oversight for all Rule 20 programs, including:

  • Development of updated Rule 20 Guidebooks detailing costs and responsibilities of parties, IOU contacts, timelines for annual reporting
  • Establishing subaccounts for tracking actual program expenses, with cost recovery periodically through GRC applications
  • Annual Rule 20 reports and updates to local government
  • Improved recordkeeping

  • In Phase 2, the CPUC will address additional issues, including whether to add Rule 20A project eligibility criteria for wildfire safety and emergency-related undergrounding or otherwise modify Rule 20A project eligibility criteria; whether to modify the Rule 20A program to support projects in underserved and disadvantaged communities; whether to take additional steps to support and complete active Rule 20A projects; and whether to modify or discontinue the Rule 20D program.

    Contact: Lynn Haug or Jed Gibson