BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       SB 1028|
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                                UNFINISHED BUSINESS 


          Bill No:  SB 1028
          Author:   Hill (D) 
          Amended:  8/18/16  
          Vote:     21 

           SENATE ENERGY, U. & C. COMMITTEE:  9-0, 4/5/16
           AYES:  Hueso, Morrell, Cannella, Hertzberg, Hill, Lara, Leyva,  
            McGuire, Pavley
           NO VOTE RECORDED:  Gaines, Wolk

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 5/27/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

           SENATE FLOOR:  39-0, 6/2/16
           AYES:  Allen, Anderson, Bates, Beall, Berryhill, Block,  
            Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,  
            Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,  
            Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,  
            Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone,  
            Vidak, Wieckowski, Wolk
           NO VOTE RECORDED:  Runner

           ASSEMBLY FLOOR:  80-0, 8/23/16 - See last page for vote

           SUBJECT:   Electrical corporations:  local publicly owned  
                     electric utilities:  electrical cooperatives:   
                     wildfire mitigation plans


          SOURCE:    Author


          DIGEST:  This bill requires the California Public Utilities  
          Commission (CPUC)-regulated electric utilities to file annual  
          wildfire mitigation plans and requires the CPUC to review and  








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          comment on those plans.  This bill also requires publicly owned  
          utilities (POU) and electrical cooperatives to determine their  
          risk of catastrophic wildfire that can be caused by their  
          electric lines and equipment and, if a risk exists, submit  
          wildfire mitigation plans to their governing board for its  
          approval.  This bill provides a POU or electrical cooperative,  
          at the discretion of their governing board, may utilize a  
          federally approved fire prevention plan to meet the requirements  
          of the wildfire mitigation plan.


          Assembly Amendments require the CPUC to review and comment on an  
          electrical corporation's wildfire mitigation plan, instead of  
          the previous language that required the CPUC to approve the  
          plans. Additional amendments are technical or clarifying.  


          ANALYSIS: 

          Existing law:

           1) Provides that the CPUC has regulatory authority over public  
             utilities, including electric corporations.  (California  
             Constitution, Article 3 and 4)

           2) Requires the CPUC to develop formal procedures to  
             incorporate safety in a rate case application by an  
             electrical corporation or gas corporations.  (Public  
             Utilities Code §750)

           3) Requires the Federal Energy Regulatory Commission (FERC) to  
             issue licenses to any state or municipality or others, for  
             the purposes of constructing, operating and maintaining dams,  
             water conduits, reservoirs, and transmission lines to improve  
             navigation and to develop power from streams and other bodies  
             of water over which it has jurisdiction.  (16 United States  
             Code §797 (e))

          This bill:

          1) Establishes a new chapter in the Public Utilities Code to  
             address wildfire mitigation and requires each electrical  








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             corporation to construct, maintain and operate its electrical  
             lines and equipment in a manner that will minimize the risk  
             of catastrophic wildfire posed by electrical lines and  
             equipment. 





          2) Requires electrical corporations to annually prepare a  
             wildfire mitigation plan for the upcoming compliance period.



          3) Requires the wildfire mitigation plan to include specified  
             information, including: accounting of responsible persons for  
             executing the plan, a description of the preventive  
             strategies and programs to be adopted by the electrical  
             corporation to minimize the risk of its electric systems  
             causing catastrophic wildfires, the metrics that will be used  
             to evaluate the plan's performance, how it will monitor and  
             audit the plan, and any other information required by the  
             CPUC. 



          4) Requires the CPUC to expeditiously, but no later than 30 days  
             before the beginning of the compliance period, review and  
             comment on the electrical corporation's wildfire mitigation  
             plan.



          5) Requires the CPUC to provide the electrical corporation an  
             opportunity to amend a wildfire mitigation plan in response  
             to CPUC comments within 30 days.





          6) Requires the CPUC to conduct audits to determine if the  








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             electrical corporation is satisfactorily complying with its  
             plan.





          7) Authorizes the CPUC to contract with a third-party to conduct  
             audits, evaluate plans or conduct inspections, and to require  
             the electrical corporation to reimburse for any related  
             expenses.





          8) Requires each POU and electrical cooperative to construct,  
             maintain, and operate its electrical lines and equipment in a  
             manner that will minimize the risk of catastrophic wildfire  
             posed by those electrical lines and equipment. 



          9) Requires the governing board of the local POU or electrical  
             cooperative to determine, in consultation with fire  
             department(s) or relevant agencies, whether any portion of  
             the geographical area where the utility's overhead lines and  
             equipment are located poses a significant risk of  
             catastrophic wildfire from electrical lines and equipment and  
             requires the utility to present to its governing board, at an  
             interval determined by the governing board, for its approval  
             wildfire mitigation measures that the utility will undertake.



          10)Provides that a POU or electrical cooperative may utilize a  
             fire mitigation plan submitted and approved by the FERC as  
             part of the conditions of its license to operate or utilize  
             power from a dam to meet the requirements of developing and  
             approving wildfire mitigation measures. 

          Background








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          California wildfire and electric systems.  In October of 2007, a  
          series of large wildfires ignited and burned hundreds of  
          thousands of acres in several counties in Southern California.   
          The fires displaced nearly one million residents, destroyed  
          thousands of homes, and took the lives of ten people and an  
          additional seven who died from efforts to evacuate or from other  
          fire-related causes.  Among the fires was the Witch Fire, one of  
          the nation's most damaging, which was ignited by power lines.   
          More recently, the September 2015 Butte Fire - which burned over  
          70,000 acres in Amador and Calaveras Counties, destroyed 818  
          structures, and caused two fatalities - was caused by contact  
          between an electric overhead line and a tree.  According to CAL  
          FIRE, power lines were the second-leading cause of wildfires in  
          2013.  Electrical equipment can act as an ignition source,  
          including downed power lines, arcing, and conductor contact with  
          trees.  Although electric systems do not routinely cause  
          catastrophic fires, they are known to cause hundreds of small  
          fires every year.  Risks for wildfires have also increased with  
          the extended drought and bark beetle infestation that has  
          increased tree mortalities and, as a result, increased the risk  
          and fuel for wildfires.

          CPUC efforts to address wildfires.  After the 2007 fires ravaged  
          several areas of the state, in 2008, the CPUC initiated  
          rulemaking proceeding to address fires related to utility poles.  
           The CPUC's efforts have resulted in additional requirements on  
          electric utilities to reduce the likelihood of fires started by  
          or threatening utility facilities, including improved vegetation  
          management, as well as, requiring the utilities to develop  
          electric utility fire prevention plans.  The first phase of the  
          proceeding also adopted fire hazard maps of high-risk areas in  
          Southern California.  In May 2015, the CPUC opened a new  
          rulemaking proceeding to develop and adopt fire-threat maps and  
          fire-safety regulations (R. 15-05-006).  The CPUC tasked CAL  
          FIRE to oversee and select outside experts to develop a more  
          refined statewide fire hazard map.  As noted in the Scoping  
          Memo, the fire-threat map will be based on approximately 150  
          terabytes of fire-weather data, which will be used to run  
          millions of fire simulations to build a high resolution,  
          statewide fire-treat map.  The CPUC and CAL FIRE have conducted  
          workshops to solicit feedback on the draft map.  After a couple  








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          of delays, a final map was issued February 2016.  Additionally,  
          the CPUC conducted a safety en banc related to utility pole  
          safety on April 28, 2016, in Los Angeles.  The agenda for the en  
          banc included representatives from CAL FIRE, electric utilities,  
          communications utilities and providers and other stakeholders. 

          Performance-based rules vs. prescriptive rules.  As noted, the  
          CPUC's rulemaking efforts to address wildfires and electric  
          systems have been active since 2008, with several phases, in two  
          separate proceedings.  As the author notes, these efforts have  
          resulted in the adoption of rules that require prescriptive  
          standards - such as dictating clearances between power lines and  
          trees.  The author advocates for the need to establish  
          performance, or risk-based, safety rules that focus on the  
          identification of hazards, sets goals and provides utilities  
          flexibility in how to achieve the goals.  This approach would be  
          akin to the CPUC efforts to address pipeline safety after the  
          PG&E San Bruno fatal explosion.  A performance-based approach,  
          according to the author, would stand in contrast to a  
          prescriptive approach which has experienced long delays in  
          assessing individual measures. However, it is reasonable that  
          the two approaches do not need to be mutual exclusive.  The  
          recommendations in this bill to require electrical corporations  
          to develop mitigation plans and have them reviewed by the CPUC  
          can both compliment, and be informed, by the CPUC's efforts to  
          establish prescriptive measures.

          Existing federal requirements for some projects.  Senate author  
          amendments provide POUs and electrical cooperatives greater  
          discretion to utilize the fire mitigation and response plan  
          developed as a condition of the permit to operate a dam under  
          federal jurisdiction, as is the case for the Sacramento  
          Municipal Utility District (SMUD). Specifically, the FERC issued  
          SMUD a 50-year license to operate the Upper American River  
          Project on July 23, 2014.  U.S Forest Service 4(e) Condition No.  
          60 in the License, and Article 1-34 in the FERC Relicensing  
          Settlement Agreement for the project, require that within one  
          year of license issuance, SMUD shall file with FERC a Fire  
          Prevention and Response Plan developed in consultation with  
          appropriate state and local fire agencies and approved by United  
          States Forest Service.  With these amendments, SMUD may utilize  
          this plan to help meet the requirements of this bill.








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          Related/Prior Legislation
          
          SB 1463 (Moorlach) requires the CPUC, in consultation with the  
          CAL FIRE, to use specified criteria in determining areas that  
          are at high risk from wildfires and require undergrounding of  
          any replacement, relocation or construction of transmission,  
          subtransmission, and distribution systems in those areas.  The  
          bill is pending consideration in the full Senate.

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes

          According to the Assembly Appropriations Committee:


           Increased costs of approximately $620,000 Utilities  
            Reimbursement Account) to the CPUC for staffing, training, and  
            equipment costs.  



           Increased contracting costs of approximately $250,000 annually  
            for three years for the CPUC to contract with a fire  
            mitigation consultant.



           POU requirements will not result in reimbursable  
            state-mandates because the utilities have the authority to  
            charge fees and generate revenue to offset their costs.


          SUPPORT:   (Verified8/23/16)


          Northern California Power Agency
          Rural County Representatives of California


          OPPOSITION:   (Verified8/23/16)









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          None received


          ARGUMENTS IN SUPPORT:      The author comments that the CPUC  
          opened a proceeding meant to address wildfire prevention more  
          than seven years ago.  In the proceeding the electric and  
          telecommunications utilities have continued to be allowed to  
          postpone discussion of increased construction standards in high  
          wildfire risk areas.  Contrast the slowness of the CPUC's  
          regulatory proceeding with that of the electric safety regulator  
          in the Australian state of Victoria in response to catastrophic  
          "Black Saturday" bush fires of 2009.  California's electric  
          utilities currently file annual fire prevention plans with the  
          CPUC, but these plans are of varying quality, have never been  
          evaluated to determine their adequacy, and have never been  
          audited.

           ASSEMBLY FLOOR:  80-0, 8/23/16
           AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth  
            Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,  
            Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,  
            Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,  
            Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,  
            Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon



          Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107
          8/23/16 19:58:24


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