BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
                              Senator Ben Hueso, Chair
                                2015 - 2016  Regular 

          Bill No:          SB 1463           Hearing Date:    4/5/2016
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          |Author:    |Moorlach                                             |
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          |Version:   |3/28/2016    As Amended                              |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Nidia Bautista                                       |
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          SUBJECT: Electrical lines:  mitigation of wildfire risks

            DIGEST:    This bill would require the California Public  
          Utilities Commission (CPUC), in consultation with the Department  
          of Forestry and Fire Protection (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.

          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.Establishes the Very High Fire Hazard Severity Zones in order  
            to classify lands in the state with whether a very high fire  
            hazard is present so that public officials are able to  
            identify and adopt measures to mitigate against fire risk.  
            (Government Code 51175)

          4.Establishes the California Emergency Services Act and provides  
            that the state is recognized with responsibility to mitigate  
            the effects of natural, manmade, or war-caused emergencies  







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            that result in conditions of disaster or in extreme peril to  
            life, property, and the resources of the state, generally to  
            protect the health and safety and preserve the lives and  
            property of the people of the state. Confers on the Governor  
            to provide state assistance and emergency programs.  
            (Government Code 8550)

          This bill:

          1.Requires CPUC, in consultation with CAL FIRE, when determining  
            areas in which to require enhanced mitigation measures for  
            wildfire hazards posed by overhead electrical lines and  
            equipment, to include all communities that:





               a.     Have experienced serious consequences from a  
                 wildfire, including, but not limited to, human injury or  
                 fatality or property damage in excess of twenty-five  
                 million dollars.





               b.     The Governor has declared a state of emergency, or  
                 local emergency, involving the community as a result of a  
                 wildfire pursuant to the California Emergency Services  
                 Act. 





               c.     At least 50 percent of the community is included in  
                 a "very high" or "high" risk zone of the map of the Fire  
                 Hazard Severity Zones in the Local Responsibility Areas  
                 of California, in use of as January 1, 2016, prepared by  
                 CAL FIRE. 












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          2.Requires enhanced mitigation measures include the  
            undergrounding of any new construction, replacement, or  
            required relocation of transmission, subtransmission, and  
            distribution systems, unless the governing body of the  
            community, by adoption of an ordinance or resolution,  
            specifically agrees to other measures.





          3.Prohibits an electrical corporation from recovering expenses  
            related to the mitigation measures solely from the ratepayers  
            of the community where the measures are implemented. 





          4.Requires the electrical corporation to recover its expenses in  
            providing the enhanced mitigation measures as a general  
            expense item in its rates. 





          5.Provides that the undergrounding of electrical infrastructure,  
            other than the enhanced mitigation measures, may continue to  
            be funded pursuant to Electric Tariff 20A budget allocations  
            and allows those allocations to be freely transferred between  
            communities.

          Background

          Laguna's experience with wildfire.  On Friday, July 3, 2015, a  
          portion of Laguna Canyon area experienced a fire when falling  
          trees hit a power line on Arroyo Drive which sparked a fire on a  
          brush covered hillside along Laguna Canyon Road.  With light  
          winds and air support, the fire was knocked down after burning  
          about 15 acres. Five aircraft and 150 firefighters were  
          deployed. Based on a local news story, the brush fire prompted  
          the Mayor to call for an all-out effort to underground utilities  
          citywide.  According to the same Laguna Beach Indy newspaper  








          SB 1463 (Moorlach)                                 Page 4 of ?
          
          
          story, residents, motivated by improving views and lowering fire  
          risk, themselves have footed the bill to bury utility lines in  
          their own neighborhoods in 40 percent of the city, the public  
          works department estimates.  According to a city statement,  
          since 2007, at least four fires have been attributed to  
          above-ground electric utilities and been involved in 46  
          accidents along Laguna Canyon Road, the city statement says.  
          Laguna Beach has also experienced one of the nation's costliest  
          fires.  In 1993 an arsonist-caused fire burned 16,000 acres and  
          destroyed or severely damaged over 400 homes and caused $528  
          million dollars in damage.

          CPUC efforts to address wildfires.  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 evacuating or from fire related causes.  These  
          fires included the Witch Fire, one of the nation's most  
          damaging, which was ignited by power lines.  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 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  
          also adopted fire hazard maps of high-risk areas in Southern  
          California. In May 2015, the CPUC open 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 of delays, a final map was issued on  
          February 12, 2016.  Additionally, the CPUC has announced a  
          safety en banc related to utility pole safety on April 28, 2016  
          in Los Angeles.  The agenda for the en banc includes  
          representatives from CAL FIRE, electric utilities,  
          communications utilities and providers and other stakeholders. 

          Mapping fire hazard and risk.  The City of Laguna Beach  








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          submitted comments into the proceeding to express the city's  
          objections to the map, particularly because the map places the  
          city under the lowest margins of the Utility Fire Threat index.  
          The City of Laguna Beach stated that the map has limitations and  
          correcting what appears to be the exclusion of key criteria that  
          artificially eliminates developed communities from high wildfire  
          risk categories, including housing density and local fire  
          history.  The City points to a 2008 CAL FIRE Fire Hazard  
          Severity Zone Development map which designates 90 percent of the  
          City in a very high fire hazard severity zone.  They also  
          submitted comments to request the CPUC explain how the map will  
          be used prior to adoption, so as to ensure utilities won't point  
          to the map and argued that communities, such as Laguna Beach,  
          are not at risk for wildfire. 

          As noted in the CPUC Scoping Memo after the initial map was  
          developed for Southern California, the task of developing a  
          state-of-the science fire-threat map has proven to be a  
          difficult challenge.  Unfortunately, refining a map can be even  
          more difficult for the Legislature to do in the absence of  
          weighing other criteria that has been considered by CAL FIRE and  
          its experts.  While the City of Laguna Beach's concerns may be  
          well-founded, it is difficult to determine whether the bill's  
          proposed criteria is an appropriate approach.  For example, it's  
          unclear whether $25 million in property damage is an appropriate  
          threshold. Moreover, it is difficult to determine whether  
          usurping the CPUC/CAL FIRE mapping process is warranted.   
          Additionally, this bill proposes to rely on the 2008 CAL FIRE  
          map permanently, while never allowing for the use of an updated  
          map.  Furthermore, the 2008 CAL FIRE map states it is not  
          intended for setting project priorities, nor was it constructed  
          to consider utility facilities.

          Who pays?  This bill, as proposed, would prescribe  
          undergrounding of any new construction, replacement, or required  
          relocation of utility transmission, subtransmission and  
          distribution systems in the high risk areas as the only eligible  
          enhanced mitigation measure, unless a city or county vote for a  
          different measure. While undergrounding these utility facilities  
          may help mitigate against fire risk, unfortunately, it comes at  
          a steep cost - a minimum of six times the cost of overhead  
          systems and likely more for transmission systems. Additionally,  
          the bill does not consider other mitigation measures, such as  
          concrete or steel poles which may be less prone to fire, as well  
          as, other measures that may be more cost-effective.  Even more  








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          problematic, the bill as crafted would place the costs for  
          undergrounding the electric systems on all electric ratepayers  
          within the service territory and prohibit recovering these costs  
          exclusively from the community receiving the underground  
          facilities.  Therefore, all ratepayers in a given utility would  
          experience increased rates to cover the costs of undergrounding  
          a given community's electric systems.  The additional language  
          in the bill regarding the Electric Tariff Rule 20A could result  
          in funds paid by a given community to be transferred to another  
          community - even outside the service territory of the utility. 

          In an effort to address the concerns of the City of Laguna Beach  
          while protecting the interests of ratepayers, the author and  
          committee may wish to amend the bill to remove the requirements  
          to: define high risk areas, including the proposed criteria;  
          prescribe undergrounding for these areas as the enhanced  
          mitigation measures; require that costs for undergrounding are  
          bourne by all utility ratepayers; and authorize the transfer of  
          funds from one community's Rule 20 Electric Tariff to another.  
          Instead the bill would require the CPUC to describe how it  
          incorporated the concerns of local governments, fire  
          departments, or both in determining the boundaries in the fire  
          hazards map. 

          Double-referred.  Should this bill be approved by this  
          committee, it has been referred to the Senate Committee on  
          Natural Resources and Water.

          Prior/Related Legislation
          
          SB 1028 (Hill) would require CPUC-regulated utilities to file  
          wildfire mitigation plans and requires the CPUC to vote to  
          approve and audit those plans. The bill also requires  
          publicly-owned utilities to file wildfire mitigation plans with  
          their governing boards.  This bill is scheduled to be heard in  
          this committee.

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


            SUPPORT:  

          City of Laguna Beach (Source)









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          OPPOSITION:

          California Cable & Telecommunications Association

          ARGUMENTS IN SUPPORT:   SB 1463 instructs the CPUC on best use  
          of fire hazard information in developing future heightened  
          utility fire mitigation standards for at-risk communities  
          throughout the state.  On February 2, 2016, the CPUC served the  
          final version of Fire Map 1.  The City of Laguna Beach was  
          placed within the low-risk margins of the Utility Fire Threat  
          Index.  The City is concerned that the map may be used by  
          utilities to justify providing a less-safe level of service than  
          would otherwise be requires if the City remained in a high risk  
          zone.  SB 1463 would resolve this issue by requiring the CPUC to  
          take into consideration areas in which communities are at risk  
          from the consequences of wildfires not just those areas where  
          certain environmental hazards are present.

          ARGUMENTS IN OPPOSITION:  The California Cable &  
          Telecommunications Association expresses opposition to the bill  
          requirements to underground electrical lines and or equipment  
          because it would increase costs to the communications industry,  
          create new safety risks and be unfair to all ratepayers.  The  
          opponents argue that while electric utility corporations would  
          be reimbursed for the costs of undergrounding, communications  
          companies are not reimbursed and could be required to cover the  
          entire costs of undergrounding facilities - including non-cable  
          utility facilities - where Cable seeks to attach under the  
          current right-of-way access rules.  Such an obligation would  
          increase the cost of broadband deployment and impeded investment  
          in the impacted areas. They also argue that repair times for  
          undergrounded infrastructure can take weeks to find, excavate,  
          then fix, compared to an overhead line where the repair may be  
          more readily apparent.

          

                                      -- END --