What You Need to Know About PG&E's State-Mandated Wildfire Mitigation Plan

W

hat kind of wildfire year will 2019 be?

There's no telling. We're watching the end of an unusually wet spring that, so far, has held down the number and size of fires statewide. But the weather is already heating up. The grasses, chaparral and forests that serve as fuel for our big fires will start drying out — fast.

That much is familiar. But there will be something different about the 2019 fire season, too, reflecting a campaign to try to limit the damage from blazes sparked by power lines. Statewide, fires caused by electrical facilities have killed more than 130 people and burned more than 20,000 homes over the past two years.

That campaign — enacted by the Legislature and Gov. Jerry Brown last year and overseen by the California Public Utilities Commission — has resulted in a requirement for power providers to create plans detailing what measures they'll take to reduce the risk of more catastrophic fires this year. The CPUC signed off on the plans at a public meeting in San Francisco on Thursday.

First and foremost among the utilities submitting the newly mandated wildfire mitigation plans: PG&E.

The San Francisco-based company's equipment has been found responsible for starting the most devastating wildfire in California history — last November's Camp Fire in Butte County, which killed 85 people and destroyed nearly 14,000 homes. The potential legal liability for that blaze and others prompted the company to file for Chapter 11 bankruptcy protection in January.

PG&E's wildfire plan — approved in a CPUC administrative law judge's decision in late April — is sweeping. It promises a vast effort to inspect and repair its network of power lines, poles and high-voltage transmission towers, remove thousands of hazardous trees and expand a network of weather stations to monitor fire conditions. PG&E's wildfire mitigation blueprint could cost as much as $2.3 billion by the company's latest estimate , a bill that customers could well wind up paying.

The plan also includes a dramatically expanded program of pre-emptive power shutoffs during periods of extreme fire danger — high winds, high temperatures and critically low humidity. The company says that in addition to turning off local distribution lines in such conditions, it will consider shutting down high-voltage transmission lines and that outages could affect large parts of its 70,000-square-mile service area.

Here are questions and answers about the new state-mandated wildfire mitigation plans and how they may affect utility customers this year.

1

Wildfire mitigation plans: What are they and how did they come about?

The plans are required under SB 901, a law sponsored by Sen. Bill Dodd, D-Napa, largely in response to the devastating fires that swept Napa and Sonoma counties and other parts of Northern California in October 2017. The law's most frequently discussed and controversial provision was the creation of a system that would allow utilities to issue bonds to pay for wildfire expenses — including damages awarded in lawsuits — incurred in 2017 or after Jan. 1, 2019. Under the law, the utilities would be allowed to pass the cost of repaying the bonds on to customers.

But SB 901 also declared a need for each electric utility to run its business "in a manner that will minimize the risk of catastrophic wildfire posed by those electrical lines and equipment." To push PG&E and other utilities in that direction, the law requires each company to deliver an annual wildfire mitigation plan addressing 19 areas of operations, inspections, maintenance, planning and system improvements.

Among those areas: Plans for managing vegetation in areas adjacent to power lines; performing systemwide inspections and repairs where necessary; and updating equipment, for instance by replacing ordinary power lines with insulated lines less prone to sparking a fire if they come into contact with a tree branch.

2

What's in PG&E's plan?

PG&E's original plan details an accelerated program to remove dangerous trees; inspect power lines, power poles and transmission line towers in the state's highest-risk wildfire areas; install hundreds of new weather stations to improve the utility's assessment of conditions that could pose a wildfire threat; and launch an expanded "public safety power shutoff" program under which PG&E could shut down extensive parts of its power grid during times of extreme fire danger.

Some of the specifics of the plan, with initial estimated costs for each segment:

• An expanded vegetation management plan, in which the company says it will remove 375,000 potentially hazardous trees and clear brush and other potential fuels from 2,450 miles of power lines. The estimated cost: $338 million.
• Inspection and repair of 685,000 power poles and 50,000 transmission towers and other structures in areas subject to high fire threats. Estimated cost: $800 million to $1.3 billion.
• Installation of 150 miles of "tree wire" — essentially, insulated or covered power lines — in areas prone to high fire danger. The company says that's the beginning of a project to "harden" its power distribution system by installing 7,100 miles of covered line.
• Replacement of aging wooden distribution poles in high-fire-risk areas with poles made from fire-resistant composite materials such as fiberglass. Estimated cost of new lines and polls and related work: $240 million.
• Installation of 400 new weather stations and 70 back-country cameras to help improve fire-weather forecasting and early detection of blazes. Estimated cost: $13 million.

3

How will public safety power shutoffs work? How many people will be affected?

Preemptive power shutdowns are designed to reduce wildfire risk by halting the flow of current through electrical lines during times of forecast extreme fire danger. The shutdowns are a technique pioneered on a wide scale by San Diego Gas and Electric Co. after its power lines touched off 2007's Witch Fire, which killed two people and destroyed 1,100 homes.

With the CPUC's blessing, PG&E carried out its first public safety power shutoff during red-flag fire warnings last October — an event that affected about 60,000 customers in Napa, Sonoma, Lake, El Dorado, Placer, Amador and Calaveras counties. Power stayed off for more than two days in some areas as crews inspected weather-related damage to power lines and other equipment.

PG&E's power shutoff plan is fundamentally different this year.

It could affect much larger parts of its service area, which includes 16 million people, spread across 70,000 square miles of Northern and Central California.

Last year's power shutdowns targeted local distribution circuits — parts of the electrical grid that might serve anywhere from a few hundred to several thousand customers each. This year, PG&E says, it will consider shutting down transmission lines, which carry higher-voltage power from generating stations and serve much larger areas. As a result, PG&E says wildfire-related outages could affect any community in its service area — even if they're not in an area directly threatened by extreme fire danger. For example, the company said in its amended wildfire plan last month that even San Francisco faces the possibility of a blackout if "multiple East Bay transmission lines" were shut down preemptively due to extreme fire conditions.

4

How much does PG&E say its plan will cost?

When it submitted the first version of its wildfire management plan in February, PG&E put the total cost for 2019 between $1.7 billion and $2.3 billion.

In an amended plan submitted in late April — and not considered by the CPUC because it was submitted too late for public comment — the company said it expected its costs to rise. In the case of its ambitious safety program, PG&E put the CPUC on notice that it expects the price tag for its inspection program "to substantially increase" — in large part due to the difficulty of finding trained personnel to do the work.

5

Who will pay for the PG&E wildfire management program? How much?

Under the terms of SB 901, the law that requires the wildfire mitigation plans, PG&E and other utilities have been ordered to record their costs for the program in special "memorandum" accounts that allow the expenses to be tracked apart from other company activities. The CPUC will review the expenses incurred as part of the wildfire plans and will have the power to reject costs it finds unreasonable.

But given concern over the financial health of PG&E as it moves through its Chapter 11 bankruptcy case, it's likely that ratepayers — meaning you, the PG&E customer — will wind up paying for at least some of the company's new safety program.

How much more? At this point, it's hard to say with any certainty what the wildfire program will cost customers. But PG&E's announcement last December that it would seek a revenue increase of about $2 billion over three years beginning in 2020 might give us some idea. The company said the average residential utility bill would rise by 6.4 percent, or $10.57 a month, due to that proposed increase. Whether the wildfire plan results in a similar rise depends on which costs the CPUC allows and how it structures the increased rates.

6

What challenges does PG&E face in implementing its plan?

In its original plan, PG&E called out a long list of factors that could slow down work — and repeatedly mentioned the availability of trained workers as a potential limiting factor. An example of the challenge in finding and retaining workers: One of PG&E's longtime tree-trimming contractors ended its relationship with the company several months ago, possibly because of liability concerns.

In its April plan amendment, the utility told the CPUC that weather, a shortage of available helicopters for aerial inspections, difficulty in getting required government permits, lack of cooperation among some private landowners and a lack of workers would lead to delays on work for the plan. Some elements that were forecast to be completed by the end of this week — for instance, inspections of 685,000 power poles in areas the CPUC has designated as high fire threat districts — will now be completed "as soon as feasible" in areas where the company has encountered problems.

7

What are the major criticisms of the PG&E wildfire mitigation plan?

The most pointed comment on the PG&E plan has come from the CPUC's Public Advocates Office and from ratepayers advocacy groups like The Utility Reform Network and the California Environmental Justice Alliance. Among the major issues these groups have raised:

• Rising costs of wildfire safety inspection program: The cost of PG&E's wildfire safety inspection program, which PG&E initially estimated at about $800 million to $1.3 billion, could rise substantially. Commenters have noted the increase in inspection costs from a mere $15 million in PG&E's last rate-setting case and questioned whether the company has carried out inspections properly in the past. The CPUC's decision advises the company it will likely face public challenges in recovering these costs.
• System hardening: The limited extent and high cost of PG&E's proposal to replace uninsulated power lines with insulated wire. Commenters note that the utility plans to install just 150 miles of insulated wire this year, a tiny fraction of the 7,100 miles of line the utility says it needs to replace. The total cost for stringing those 150 miles of new wire: $236.9 million, or $1.5 million a mile. The CPUC's decision calls on the company to provide a thorough analysis of how effective the insulated wire is in preventing fires compared to other measures.
• Vegetation management: Commenters questioned whether the planned extent of PG&E's enhanced vegetation management plan is necessary and expressed concern it could result in indiscriminate tree cutting. The commission's decision would require PG&E to submit data on the effectiveness — and cost effectiveness — of its vegetation program in its 2020 wildfire mitigation plan.
• Situational awareness: PG&E's plan includes several measures planned for this year to help the company better forecast and understand fire weather and wildfire behavior: hundreds of new remote weather stations, dozens of digital fire cameras, and development of new fire modeling tools. Commenters and the CPUC's decision found one flaw in PG&E's plan: a lack of systematic measures to share data with local governments and emergency responders. The decision requires PG&E to report back by the end of June about what steps it will take to make its situational awareness information available to first responders and others.

8

What's next?

The five-member commission plans to meet Thursday morning to vote on the wildfire mitigation plans from PG&E and other electric utilities.

But this is just the beginning for PG&E. The CPUC's decision directs the company to produce a series of new studies and analyses to be included in its 2020 wildfire mitigation plan. For instance, the commission wants the company to do a much more thorough job analyzing the potential benefits and drawbacks of the measures it's undertaking and to what degree those measures make its system safer.

In short, the CPUC appears ready to sign off on PG&E's plan for this year — and says it expects better next year.