California Public Utilities Commission Issues Proposed Rulemaking Decision to Enhance Regulatory Oversight and Enforcement of Investor-Owned Utilities

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By Riley Minkoff

On September 17, 2021, the California Public Utilities Commission (CPUC) announced the issuance of the proposed rulemaking decision R-20-07-013. This decision, if adopted, would further develop a risk-based framework for electric and gas utility decisions.

The proposed decision would adopt 32 safety and operational metrics for Pacific Gas and Electric Company (PG&E), to be used in accordance with D.20-05-053, which approved PG&E’s post-bankruptcy reorganization plan. This decision would require PG&E to report on these Safety and Operational Metrics every six months starting March 31, 2022. The proposed decision also adopts 10 new Safety Performance Metrics (SPMs) which build on those adopted in D.19-04-020. The new SPMs would apply to PG&E, Southern California Edison Company (SCE), Southern California Gas Company (SoCalGas), and San Diego Gas & Electric Company (SDG&E). The decision would also delete or modify 23 SPMs.

This proposed decision builds on R.13-11-006, which the CPUC opened on November 14, 2013, and included a decision granting compensation to The Utility Reform Network (TURN) on September 24, 2020, for intervention influencing a decision in the public interest.  This proceeding outlined an “Order Instituting Rulemaking to Develop a Risk-Based Decision-Making Framework to Evaluate Safety and Reliability Improvements and Revise the Rate Case Plan for Energy Utilities (Risk Rulemaking).” The CPUC stated that the purpose of the Risk Rulemaking was to incorporate a decision-making framework based on risk into the Rate Case Plan (RCP) for the energy utilities’ General Rate Cases (GRCs). The RCP guides utilities on how to follow substantive information and procedural rules in order to address revenue requests in their GRCs, and therefore the new and/or modified safety and operational metrics addressed in the proposed decision would be of paramount importance to the utility companies when preparing their respective RCP’s.

The September 17 proposed decision would also build on R.13-11-006 by modifying the “Transparency Guidelines” submitted by PG&E, as well as by requiring SCE to test the guidelines concurrently with the filing of their 2022 Risk Assessment Mitigation Phase documents. However, the CPUC will not consider formal adoptions to the proposed modifications of the Transparency Guidelines until a later decision. The rulemaking would also approve minor technical clarifications to the Risk-Based Decision Making Framework adopted in D.18-12-014.

Finally, the proposed decision would adopt a 2021 Safety Model Assessment Proceeding (S-MAP) Revised Lexicon and would formally establish a Technical Working Group for the proceeding. This would identify issues within the scope of this group, including the development of an updated SMAP Roadmap, which would help guide Phase II of the proceeding. If approved by the CPUC, this decision would enhance regulatory oversight and enforcement of investor-owned utilities (IOUs) like PG&E, SCE, SoCalGas, and SDG&E by improving their risk mitigation and monitoring their safety performances. This rulemaking would also establish specific metrics to evaluate PG&E’s safety performance, which would contribute to further implementation of the Enhanced Oversight and Enforcement Process (EOEP) the CPUC imposed upon PG&E as a condition of approving PG&E’s May 2020 plan for exiting bankruptcy.

That EOEP was a response to PG&E’s wildfire mitigation designated work in 2020. It was adopted as a condition for approving PG&E’s plan for exiting bankruptcy in May 2020.  It provides a roadmap for monitoring PG&E’s performance in delivering safe, reliable, affordable, clean energy. The EOEP does not replace existing CPUC regulatory or enforcement jurisdiction or limit the Commission’s alternative enforcement authority. These efforts to monitor PG&E are part of many actions the CPUC began taking to hold PG&E accountable for the mitigation of wildfire threats and the safety of their systems. The CPUC issues progress reports based on the steps outlined in the EOEP process on the PG&E page on the CPUC’s website.

The vote on the proposed decision will be held at the CPUC’s October 21, 2021 meeting [agenda]. Comments from the public may still be submitted to the “public comments” section of the proceeding’s Docket Card. At this writing, there have been no public comments submitted on the proceeding. The proposed decision will have no legal effect until and unless the Commission hears the item and votes to approve it.

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