State Auditor Releases Report Finding State Officials are Failing to Hold California’s Electric Utility Companies Accountable for Wildfires

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By Justin Dalton

On March 24, 2022, the Acting California State Auditor, Michael Tilden, released an audit finding that state officials are failing to hold California utility companies accountable for preventing fires started by those companies’ equipment. The Audit found that the Office of Energy Safety (ESO) approved seriously deficient wildfire prevention plans.

The ESO was established under an Order Instituting Rulemaking R.18-12-005 under the purview of the California Public Utilities Commission (CPUC). On July 1, 2021, the ESO was transferred to the California Department of Natural Resources pursuant to sections 15470 and 15473 of the Government Code (part 7.3 of the California Energy Infrastructure Safety Act), to ensure that electric utility companies were taking the actions necessary to effectively mitigate the risk of wildfire dangers in California. [27:1 CRLR 218–220] The ESO oversees the six Investor-Owned Utilities (IOUs) in California.

According to the Audit, since 2015 power lines have been the source of 30% of the state’s most destructive wildfires. The State’s IOUs rely on Public Safety Power Shutoffs (PSPSs) in an attempt to mitigate the potential harm arising from high wind events that have caused the destructive wildfires. Auditor Tilden found that IOUs were using the PSPSs to shut off power to communities, putting their customers who rely on energy to power medical devices at risk, without taking the necessary steps to mitigate wildfire dangers in the high-risk areas affected by PSPSs.

In January 2022, as a part of phase 3 of R.18-12-005  IOUs are required to identify high risk circuits where wildfire danger is higher. However, Auditor Tilden found that this requirement could be strengthened by further requiring IOUs to identify improvements necessary to mitigate wildfire risk in areas of high wildfire danger in order to prevent future power shutoffs. Further, Auditor Tilden found the requirement insufficient as it does not change the standard to which the ESO is allowed to deny Safety Certificates based on IOUs’ failure to implement safety mitigation plans that focus on high-risk areas. Rather, the IOU mitigation plans are not required to designate their area of focus, thus allowing IOUs to focus on relatively low risk wildfire risk areas.  In 2020 the ESO approved Safety Certificates for the three largest energy IOUs, despite serious deficiencies in the IOUs’ safety mitigation plans. In 2021 these serious deficiencies were not present in the IOUs’ safety mitigation plans but the current requirements do not allow the ESO to deny Safety Certificates based on the IOUs’ failure to implement prior mitigation plans. The ESO is required to only consider whether an IOU is in the process of implementing their most recent mitigation plan.

Further, the 2022 standards for Safety Certificates do not require that IOUs delineate where the wildfire mitigation plans will occur.  According to the Audit, this lack of specificity will allow IOUs to continue making improvements in relatively low risk areas rather than doing the work necessary to mitigate the danger in high wildfire risk areas. In response to this deficiency, Auditor Tilden recommends that legislation should amend the current shutoff reduction law to require that IOUs plan to prevent power shut offs in circuits with higher probabilities of a PSPS occurring.

The process does include a required status update within 60 days to record responses and any actions taken regarding Auditor Tilden’s recommendations.

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