BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1028| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 SB 1028 Page 2 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 SB 1028 Page 3 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 SB 1028 Page 4 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 SB 1028 Page 5 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 SB 1028 Page 6 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. SB 1028 Page 7 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) SB 1028 Page 8 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 **** END **** SB 1028 Page 9