GOOD AFTERNOON. I AM CALLING
TO ORDER THIS HEARING OF THE
ASSEMBLY COMMITTEE ON UTILITIES
AND ENERGY. UH, WE'RE HERE FOR
AN OVERSIGHT HEARING TO DISCUSS
AFFORDABILITY IN THE ELECTRIC
SECTOR AND SPECIFICALLY TO
EXPLORE SOLUTIONS AND
OPPORTUNITIES TO BEND DOWN THE
CURVE ON ESCALATING RATES. UH,
BEFORE WE BEGIN AND JUMP INTO
THE HEARING, I'VE GOT A FEW
HOUSEKEEPING ITEMS TO GO OVER.
AT FIRST. I WILL MAINTAIN
DECORUM DURING THE HEARING, AS
IS CUSTOMARY IN ORDER TO HEAR
THE PUBLIC WITHIN THE LIMITS OF
OUR TIME, WE WILL NOT PERMIT
CONDUCT THAT DISRUPTS OR
OTHERWISE IMPEDES LEGISLATIVE
PROCEEDINGS. ANY INDIVIDUAL WHO
IS DISRUPTIVE MAY BE REMOVED
FROM THE ROOM. A PUBLIC COMMENT
TODAY IS WELCOME IN PERSON.
OTHERWISE IT CAN BE SUBMITTED
ONLINE VIA THE COMMITTEE'S
WEBSITE. UH FOR TODAY'S AGENDA,
I'LL PANELISTS WILL BE INVITED
TO THE DÍAS AT THE SAME TIME,
AND ALL HAVE BEEN ASKED TO
PRESENT OPENING REMARKS PRIOR TO
TURNING TO MEMBER QUESTIONS. UM
AS I'VE SHARED WITH OUR
COMMITTEE MEMBERS, BUT èC, PUC
PRESIDENT REYNOLDS AND STATE
AUDITOR PARKS HAVE COMMITMENTS
THIS AFTERNOON AND WE'LL NEED TO
STEP OUT AT AT 3 P.M. SO I WILL
ASK MY COLLEAGUES TO WITHHOLD
QUESTIONS. UNTIL THE END OF THE
PRESENTATIONS SO THAT WE CAN
ENSURE WE'VE GOT TIME TO HEAR
FROM ALL PANELISTS, UH, BEFORE
WE DIG IN. I ALSO WANT TO NOTE
THAT THIS HEARING SERVES AS THE
ANNUAL LEGISLATIVE UPDATE OF THE
PUBLIC UTILITIES COMMISSION AND
PUBLIC ADVOCATE'S OFFICE AS
REQUIRED BY LAW, WHILE THE
BREATH OF BOTH ORGANIZATIONS
WORK IS LARGE, THE FOCUS OF
TODAY'S HEARING IS ON ELECTRIC
BILL AFFORDABILITY. SUBSEQUENT
HEARINGS OF THIS COMMITTEE WILL
FOCUS ON OTHER ASPECTS OF THEIR
PORTFOLIOS. SO I INVITE MY
COLLEAGUES TO SAVE QUESTIONS ON
THOSE TOPICS FOR THOSE LATER
DISCUSSIONS. UH IN THE MEANTIME,
BOTH THE èC PU, èC AND P A Ó
ANNUAL REPORTS ARE AVAILABLE
ONLINE. UM SO WITH THAT, LET'S
UH, TURN TO TODAY'S TOPIC. UH,
WHICH IS ENERGY AFFORDABILITY.
AND UM IS ANYONE IN THE ROOM WHO
HAS OPENED THEIR ELECTRICITY
BILL RECENTLY CAN TESTIFY. RATES
ARE SKYROCKETING IN CALIFORNIA,
UM CALIFORNIA RATES IS NOTED
NOTED IN TODAY'S BACKGROUND
PAPER ARE THE HIGHEST IN THE
NATION. UM THE HARSH REALITY IS
THAT MILLIONS OF CALIFORNIAN
FAMILIES ARE AT THE BREAKING
POINT. RIGHT NOW. HIGH ENERGY
PRICES ARE ALSO A MAJOR
CHALLENGE FOR CALIFORNIA
BUSINESSES, PARTICULARLY OUR
SMALL BUSINESSES, WHO ARE
STRUGGLING TO KEEP THEIR DOORS
OPEN AND QUITE LITERALLY KEEP
THEIR LIGHTS ON OUR CONSTITUENTS
WANNA KNOW WHAT'S GOING ON? UM,
AND MORE IMPORTANTLY, THEY WANT
TO KNOW WHAT WE AS THEIR ELECTED
REPRESENTATIVES ARE DOING TO
ADDRESS THIS ISSUE AND TO
CONTAIN COSTS. SO THAT'S THE
TOPIC FOR TODAY'S HEARING. I'M
REALLY LOOKING FORWARD TO OUR
CONVERSATIONS. OUR FIRST PANEL
IS GOING TO OUTLINE HOW WE GOT
HERE. WHAT'S CONTRIBUTING TO
THESE ASTRONOMICAL RATES AND
PRECIPITOUS GROWTH? AND THEN THE
SECOND PANEL IS GOING TO DIG
INTO OPPORTUNITIES. AND UH,
LOOKING FORWARD, PARTICULARLY TO
THAT DISCUSSION OF WHAT WE CAN
DO TO BEND THE COST CURVE? UM SO
WITH THAT, LET'S GO AHEAD AND,
UH, WELCOME OUR PANELISTS ONTO
THE DÍAS. UH, LET'S SEE, I I'LL
ALSO NOTE SORRY BEFORE WE BEGIN
AND WE HAVE INVITED SOME GUESTS
TO JOIN US TODAY. ASSEMBLY
MEMBER HART, UM, IS GOING TO BE
JOINING US. I THINK HE'S ON A
FLIGHT THAT'S BEEN DELAYED. UM
BUT AS THE CHAIR OF OUR J LT
COMMITTEE, HE'LL BE JOINING US
TODAY. UM AS WELL. ASSEMBLY
MEMBER BERNER, UM, WHEN HER
FLIGHT ARRIVES. SO UH, WITH
THAT. SORRY PANELIST. IF YOU CAN
PLEASE COME TO THE DÍAS. WE'LL
GO AHEAD AND PULL UP THE
PRESENTATIONS. UH LET'S SEE WE
ARE WELCOMING PRESIDENT ALICE
REYNOLDS. OF THE CALIFORNIA
PUBLIC UTILITIES COMMISSION. WE
ARE WELCOMING GRANT PARKS, WHO
IS OUR CALIFORNIA STATE AUDITOR?
UH, LINDA CISA, THE UH, DEPUTY
DIRECTOR OF ENERGY FROM THE
CALIFORNIA PUBLIC ADVOCATE'S
OFFICE. UM AND THEN, AS WE JUMP
INTO OUR SECOND PANEL
DISCUSSION, I'LL INTRODUCE THE,
UH THE OTHER PANELISTS. I KNOW
IT'S A LITTLE BIT OF A TIGHT
SQUEEZE, BUT, UM, WE'RE
WELCOMING ALL OF OUR PANELISTS
TOGETHER SO THAT WE CAN
HOPEFULLY, UM, ENGAGE IN SOME
BACK AND FORTH DISCUSSION, UH,
AS UH AS THE HEARING PROCEEDS.
AH, SO AS NOTICED, WE'LL, UM ASK
THAT ALL PANELISTS PROVIDE THEIR
OPENING STATEMENTS AND THEN
WE'LL TURN TO THE COMMITTEE FOR
QUESTIONS. UM THANK YOU, AND,
UH, PRESIDENT REYNOLDS WILL GO
AHEAD AND BEGIN WITH YOU. THANKS
FOR BEING HERE. CAN YOU HEAR ME?
SO ON? OK GOOD AFTERNOON, UH,
CHAIR PETRA NORRIS, VICE CHAIR
PATTERSON AND COMMITTEE MEMBERS.
I'M ALICE REYNOLDS, PRESIDENT OF
THE CALIFORNIA PUBLIC UTILITIES
COMMISSION, AND I APPRECIATE THE
OPPORTUNITY TO APPEAR BEFORE YOU
TODAY. AS YOU KNOW, THE èC PU
èC REGULATES UTILITIES THAT
DELIVER ESSENTIAL SERVICES
THROUGHOUT CALIFORNIA, INCLUDING
ENERGY, WATER, COMMUNICATIONS,
TRANSPORTATION AND RAIL. OUR
ENERGY SECTOR JURISDICTION
INCLUDES INVESTOR OWNED
ELECTRICITY AND NATURAL GAS,
UTILITIES AND THE ELECTRIC
UTILITIES THAT WE, UH REGULATE
COVER 75% OF THE ELECTRICAL LOAD
IN CALIFORNIA. I WANNA START BY
RECOGNIZING THE IMPORTANCE OF
THE SUBJECT OF THIS HEARING.
AFFORDABILITY IS A MAIN FOCUS OF
WHAT WE DO WITH THE COMMISSION,
OUR STAFF OF ANALYSTS, TECHNICAL
EXPERTS, ADMINISTRATIVE LAW
JUDGES, LAWYERS AND MORE ARE
FOCUSED ON DECISION MAKING THAT
MINIMIZES COSTS. BUT THE CONTEXT
FOR THE THIS WORK THAT WE'RE
DOING TO OVERSEE UTILITIES IS,
UH, RECOGNIZES THAT WE'RE
SUPPORTING WORK THAT IS
FUNDAMENTAL TO WHAT WE ARE DOING
IN CALIFORNIA. THE UTILITY
SYSTEM IS GENERALLY EGALITARIAN
UTILITIES PROVIDE ELECTRICITY TO
ALL CALIFORNIANS IN URBAN AREAS
AND REMOTE RURAL AREAS. HOT
CLIMATES, MOUNTAINOUS AREAS AND
COOL COASTAL CITIES. BUT WE ALSO
FOCUS ON EQUITY AND WHERE WE CAN
THE COMMISSION IS MORE AND MORE
TARGETING SUBSIDIES, WHICH ARE
PAID THROUGH EVERYONE'S
ELECTRICITY BILLS TO THOSE WHO
NEED IT. MOST WE ASK PEOPLE WHO
CAN TO DO A LITTLE MORE FOR
THEIR NEIGHBORS WHO NEED IT.
MOST AND WE PUSHED THE UTILITIES
TO IMPROVE RELIABILITY. THIS
WORK HAS BECOME EVEN HARDER IN
CALIFORNIA, AS, UH, IT'S IT IS
ON THE FRONT LINE FACING THE
IMPACTS OF CLIMATE CHANGE. WE
PUSH UTILITIES TO IMPROVE SAFETY
. AND LATELY THE GREATEST FOCUS
HAS BEEN A CONCERTED EFFORT TO
DO EVERYTHING THE UTILITIES CAN
TO PREVENT CATASTROPHIC
WILDFIRES. SO AT THE CORE OF
THIS DISCUSSION TODAY IS
RECOGNITION THAT OUR UTILITIES
NEED TO PROVIDE ALL CUSTOMERS IN
EVERY PART OF THEIR TERRITORIES
WAS SAFE AND RELIABLE SERVICES
AT LEAST COST AND IN AN
EQUITABLE MANNER. BUT WE'RE ALSO
DOING SOMETHING ELSE IN
CALIFORNIA. WE RECOGNIZE THE
CLIMATE EMERGENCY. WE RECOGNIZE
THAT THE IMPACTS OF CLIMATE
BRING EVER INCREASING COSTS AS
WE WORK TO ADAPT. WE RECOGNIZE
THE HEALTH IMPACTS TO
COMMUNITIES THAT COME WITH
FOSSIL FUELS. IN THE ENERGY
SECTOR AT THE COMMISSION. THIS
MEANS ELECTRICITY GENERATION.
HOW DO WE PRESERVE RELIABILITY
OF SUPPLY, MEANING THAT WE HAVE
SUFFICIENT ELECTRICITY ON HAND
SO THAT PEOPLE AND BUSINESSES
ARE SERVED WHERE THEY NEED IT,
AND WHEN THEY NEED IT, WHILE
REDUCING THE NEED TO KEEP FOSSIL
FUEL POWER PLANTS ON HAND? ALL
OF THE RETAIL SELLERS OF
ELECTRICITY ARE WORKING ON THIS,
SO THIS IS NOT JUST THE THREE
LARGE INVESTOR OWNED IOS. THIS
IS ALSO THE COMMUNITY CHOICE
AGGREGATORS AND THE DIRECT
ACCESS PROVIDERS. WE HAVE 43 OF
THESE RETAIL SELLERS. WE ALSO
RECOGNIZE THAT INVESTMENTS IN
INFRASTRUCTURE MUST BE MADE TO
MAKE SURE THE SYSTEM IS
RESILIENT. AND UTILITIES MORE
AND MORE ARE PART OF THE
RESPONSE TO EMERGENCY EVENTS.
MEN AND WOMEN TECHNICIANS ARE ON
THE FRONT LINE DURING STORMS AND
HEAT WAVES AND MORE. AND THIS
ALSO MEANS THAT THE DISTRIBUTION
AND TRANSMISSION SYSTEM NEEDS TO
BE READY AND NEEDS TO FACILITATE
TRANSPORTATION, ELECTRIFICATION
AND BUILDING ELECTRIFICATION,
DECARBONIZATION OF THE
TRANSPORTATION AND BUILDING
SECTOR IS CRITICAL TO MEET THE
STATE'S CLIMATE GOALS, AND THE
UTILITIES PLAY A PART IN THAT SO
OUR ELECTRICITY SYSTEM NEEDS TO
BE UPDATED TO MEET THE NEW NEEDS
OF THE WAY WE EXPECT TO USE
ELECTRICITY NOW AND IN THE
FUTURE AND TO WITHSTAND THE
WORSENING IMPACTS OF CLIMATE
CHANGE. SO THIS MEANS THAT WE'RE
REALLY NOT LOOKING FOR BARGAIN
BASEMENT UTILITY SERVICES, BUT
WE ARE LOOKING FOR COST
EFFECTIVENESS. THE BENEFIT HAS
TO MATCH THE COSTS AND THIS IS
CALIFORNIA'S AND WE WERE ATTRACT
INVESTMENT IN NEW TECHNOLOGIES,
AND WE CREATE PROGRAMS THAT
REALLY MEET THE NEEDS OF THE
FUTURE. AND AS YOU KNOW, THIS
ALL COMES AT A COST ANY
INVESTMENT IN CLEAN ENERGY
TECHNOLOGY AND ANY GRID SUPPORT
NEEDED FOR THESE TECHNOLOGIES IS
FUNDED THROUGH ELECTRICITY
BILLS. AND THAT'S THE REASON
THAT WE'RE HERE TODAY. SO IT'S A
PRIME FINAL FRAMING POINT. I
ALSO NOTE THAT WE'RE SEEING
THESE COSTS INCREASE AT A TIME
WHEN THE COST OF LIVING IS
INCREASING OVERALL, WHICH MAKES
IT EVEN MORE IMPERATIVE THAT WE
CONTINUE TO WORK TO MAKE
ELECTRICITY SERVICES GENERATION
AND THE INFRASTRUCTURE TO
SUPPORT IT. MAKE SURE THAT THEY
ARE PROVIDED AS COST EFFECTIVELY
AS POSSIBLE. SO I DO HAVE ONE
SLIDE. UM, JUST ONE. I DON'T
KNOW IF THAT CAN BE PUT UP A
FREE HUB COPIES. THERE IT IS,
OK. UM SO THIS SLIDE REPRESENTS
THE CATEGORIES OF COST THAT MAKE
UP ELECTRICITY BILLS AND THE
INCREASES OVER TIME. UM YOU CAN
SEE THERE'S AN INCREASE IN
DISTRIBUTION COSTS. UM, THIS IS
THE RED SECTION AT THE BOTTOM.
THIS THIS IS THE, UH AND I'LL
NOTE THAT THE SINGLE LARGEST
SOURCE OF DISTRIBUTION COST
GROWTH HAS BEEN A SHARP INCREASE
IN SPENDING ON WILDFIRE
MITIGATION, MOSTLY VEGETATION,
MANAGEMENT, UH, INSPECTIONS,
MAINTENANCE AND INSURANCE. FOR
WILDFIRE MITIGATION FOR RELATED
TO WELFARE. THESE COSTS ARE, UM
UH, COLLECTED BY THE UTILITIES,
UM, BOTH THROUGH THEIR GENERAL
RATE CASES, BUT ALSO THROUGH
PROCESSES MANDATED BY S¼, B 901
AND A B 1054, WHICH REQUIRED THE
PU èC TO ALLOW UTILITIES TO
SPEND TO SEEK ADDITIONAL RATE
INCREASES THROUGH MEMORANDUM
ACCOUNTS TO COLLECT COSTS OF
WELFARE MITIGATION INCLUDED IN
WILDFIRE MITIGATION PLANS. THESE
EXPENDITURES WERE MADE OVER
SEVERAL YEARS, BUT THEY'RE
HITTING BILLS NOW, ESPECIALLY IN
PG AND E TERRITORY. DISTRIBUTION
COSTS, FOR EXAMPLE, HAVE GROWN
45% FROM, UH 2016 TO 2022. UM
AND IN ADDITION TO THE WELFARE
MITIGATION COSTS THAT I
MENTIONED THIS ALSO INCLUDES
MAINTAINING POLES AND
TRANSFORMERS, SENDING OUT REPAIR
CREWS AFTER A STORM EVERYTHING
RELATED TO THE DISTRIBUTION
SYSTEM. THE BLUE SECTION IS
GENERATION COSTS, GENERATION
COSTS GO UP AND DOWN. UM BECAUSE
OF TRENDS IN THE MARKET, AND
THESE ARE THESE ARE ALL PASS
THROUGH COSTS, UM, NOT FINANCED
BY UTILITIES. SO NÓ RETURN ON
CAPITAL BUT ALSO COLLECTED RIGHT
AWAY COLLECTED. THEY HIT BILLS
RIGHT AWAY. UM AND, UH UH, ONE
THING TO NOTE IS THAT RECENTLY
WE'VE SEEN SOME MACROECONOMIC
FORCES AFFECTING GENERATION
COSTS. WE'RE SEEING ENERGY
CONTRACTS BEING RENEGOTIATED BY
GENERATION DEVELOPERS BECAUSE OF
HIGH INFLATION, AFFECTING LABOR
AND MATERIAL COSTS AND SUPPLY
CHAIN CONSTRAINTS. TRANSMISSION
COSTS ARE NEXT IN THE GREEN
SECTION. UM THEY'VE GONE UP
SLIGHTLY IN RECENT YEARS, THIS
PRIMARILY DUE TO COSTS OF SELF
APPROVED TRANSMISSION PROJECTS.
THESE ARE, UM PROJECTS THAT ARE
LOCAL AND REGIONAL. THAT THE
UTILITIES UH UM UNDERTAKE THEY
DON'T EXPAND THE CAPACITY OF THE
GRID, BUT THEY'RE USED TO REPAIR
AND REPLACE THINGS LIKE OLD
SUBSTATION EQUIPMENT. UM PUBLIC
PURPOSE PROGRAMS IS NEXT IN THE
PURPLE SECTION. THIS IS ANOTHER
COST CATEGORY THAT'S GROWING
RATEPAYERS SUBSIDIZE 2.8 BILLION
TO SUPPORT CRITICAL LOW INCOME
DISCOUNT PROGRAMS SUCH AS CARE
AND FARAH, AND THAT'S REFLECTED
IN THIS COST CATEGORY. UM PUBLIC
PURPOSE PROGRAMS ALSO INCLUDE
ENERGY EFFICIENCY PROGRAM COSTS,
WHICH ARE ALSO INCREASING. UM I
WANTED TO EMPHASIZE THAT, UH, AS
PART OF THE, UM, PUC'S WORK, AND
I'LL TALK BRIEFLY ABOUT A COUPLE
OF THE, UH THE, UM, ACTIONS THAT
WE UNDERTAKE. WE DO, UM, WORK TO
BE TRANSPARENT. ALL OF OUR
DECISIONS ARE DONE THROUGH
PROCEEDINGS. THE BOOKS OF THE I
Ó U S¼ ARE OPEN AND WE MAKE
DECISIONS IN A PUBLIC PROCESS.
UM WE USE ADJUDICATORY PROCESSES
WITH STRICT PROCEDURES,
INCLUDING REQUIREMENTS FOR
VERACITY AND EVIDENTIARY
STANDARDS. UM AND USING THIS
PROCESS ONE WAY WE SCRUTINIZE
FORECASTED COSTS IS THROUGH
GENERAL RATE CASE APPLICATIONS.
WE HAVE GENERAL RATE CASES FOR
EACH UTILITY ON FOUR YEAR CYCLES
, AND IN THESE APPLICATIONS, THE
UTILITIES FORECAST COSTS. UM AND
THEY, UH AND THEN WE ULTIMATELY
APPROVE WHAT IS OFTEN A REDUCED
PORTION OF THE FORECASTED COSTS.
WE RECENTLY APPROVED PG AND E S¼
GENERAL RATE CASE AT THE END OF
LAST YEAR, AND THE NEW
FORECASTED COSTS THAT WERE
INCORPORATED INTO RATES ARE
BEGINNING TO SHOW UP ON CUSTOMER
BILLS AT THE BEGINNING OF THIS
YEAR. UM AND THE WORK PROPOSED
BY P GENIE DOES REFLECT AN
INCREASE OVER PRIOR YEARS AND
THE COSTS ARE HIGHER. BUT WHAT
WE APPROVED WAS ALSO
APPROXIMATELY $2 BILLION LESS
THAN THE ORIGINAL REQUEST FROM
PG AND E. IN ADDITION TO THE
GRCS I MENTIONED EARLIER THAT
THE UTILITIES CAN RECORD COSTS
IN VARIOUS MEMORANDUM ACCOUNTS.
SO THAT'S WHAT HAPPENS OUTSIDE
OF THE GR èC PROCESS. THESE ARE
COSTS THAT ARE MORE DIFFICULT TO
FORECAST, OR OR UNFORESEEABLE,
UM, SUCH AS COSTS ASSOCIATED
WITH RESPONDING TO CATASTROPHIC
EVENTS. UM AND, UH, AS I
MENTIONED WILDFIRE MITIGATION
COSTS. IN ADDITION TO OVERALL
SYSTEM COSTS, THERE ARE ALSO A
VARIETY OF ADDITIONAL MANDATED
PROGRAMS, UM, WHICH ARE USED TO
ACHIEVE SPECIFIC POLICY GOALS
THROUGH THE USE OF RATEPAYER
SUBSIDIES. I WANTED TO NOTE A
FEW BUT ALSO POINT OUT THAT
THESE ARE BENEFICIAL PROGRAMS.
THEY SERVE A PURPOSE. AND THESE
ARE THESE ARE GOOD THINGS THAT
YOU GET FROM YOUR ELECTRICITY
BILLS, BUT THEY'RE ALSO ABOVE
AND BEYOND THE BASIC
ELECTRICITY, UH, SERVICES. SOME
EXAMPLES IN 2020, A B 841, WHICH
PARTIALLY IN RESPONSE TO THE
COVID PANDEMIC, I WERE DIRECTED
TO USE RATEPAYER FUNDS TO
SUBSIDIZE VENTILATION AND
PLUMBING UPGRADES IN SCHOOLS.
THIS PROGRAM INCURRED A TOTAL
RATE PAYER SUBSIDY OF A BILLION
DOLLARS OVER THREE YEARS. THE
BILL ALSO INCLUDED A SHIFT OF
SOME OF THE COSTS OF ENERGIZING
OF CHARGING INFRASTRUCTURE FROM
THE CHARGING STATION STATION
COMPANIES TO RATEPAYERS, WHICH
ARE SOCIALIZED OVER BILLS AGAIN.
THERE'S A LARGER POLICY GOAL
HERE. AND ELECTRIC VEHICLE
CHARGERS AND AIR AND I Ó U
TERRITORY HAVE BEEN INCREASING
RAPIDLY. I Ó U WERE ALSO
DIRECTED TO IMPLEMENT A CHARGE
TO SUBSIDIZE PROCUREMENT OF
BIOMASS RESOURCES. AND THIS HAD
THE PURPOSE OF, UH, FOCUSING ON
FOREST BIOMASS, ELIMINATING HIGH
HAZARD ZONE FUEL AS DESIGNATED
BY CAL FIRE SO AGAIN A STRONG
PUBLIC PURPOSE. THE LATEST
EXTENSION OF THE PROGRAM IS
EXPECTED TO REQUIRE A TOTAL
RATEPAYER SUBSIDY OF 780
MILLION. UM ANOTHER EXAMPLE IS
THE SELF GENERATION INCENTIVE
PROGRAM, WHICH STARTED IN 2001,
SO HAS HAD ANNUAL EXPENDITURES
OF RATEPAYER FUNDING. UM,
RECENTLY. I KNOW THAT THE
LEGISLATURE SHIFTED SOME OF
THESE COSTS FROM THE RATEPAYERS,
UM TO A BUDGET ITEM OF 630
MILLION OVER A PERIOD OF YEARS
TO FUND SOLAR AND STORAGE
PROJECTS FOR LOW INCOME AND
TRIBAL CUSTOMERS. UM AND, UM
AGAIN, ALL OF THESE PROGRAMS ARE
EXAMPLES. THEY'RE USED TO
ACHIEVE POLICY GOALS THEY HAVE
EACH ONE OF THEM HAS MINIMAL
IMPACT ON BILLS. BUT
CUMULATIVELY, THEY HAVE AN
IMPACT IN THE PROGRAMS ADD UP.
JUST A COUPLE OF NOTES ON UM UH,
WAYS THAT WITH THE THINGS THAT
WE'RE LOOKING AT NOW THAT PUT
DOWNWARD PRESSURE ON RATES AND I
DO HAVE TO BE CAREFUL ABOUT OPEN
TALKING ABOUT OUR OPEN
PROCEEDINGS. UM, I'LL TOUCH ON
THEM BRIEFLY, BUT I DON'T WANT
TO TALK ABOUT FACTS THAT ARE AT
ISSUE IN PROCEEDINGS THAT ARE
OPEN BEFORE THE COMMISSION. UM
II. I MENTIONED ELECTRIFICATION,
ELECTRIFICATION OF BUILDINGS AND
TRANSPORTATION WILL HELP IN THE
LONG RUN AS WE START ADDING
SPREADING COSTS AMONG A GREATER
AMOUNT OF MEGAWATT HOURS. UM THE
COST. UH, THE RATES WILL GO DOWN
, BUT WE'RE IN A PERIOD NOW
WHERE WE HAVEN'T SEEN THE
DOWNWARD TRAJECTORY ON RATES. UM
AND WE, UH SO THAT'S ON
TRANSPORTATION AND
ELECTRIFICATION, THE
TRANSPORTATION, ELECTRIFICATION
BUILDING ELECTRIFICATION. WE
ALSO LOOK AT COST EFFECTIVE WAYS
TO GENERATE CLEAN ENERGY. WE
HAVE A PROGRAM THAT DOES LONG
TERM PLANNING, UM AND INCLUDES
REQUIREMENTS FOR EACH OF OUR
RETAIL SELLERS, ALL OF THE LOAD
SERVING ENTITIES TO DO LEASE
COST BEST FIT SELECTIONS FOR
GENERATION, AND THAT'S THROUGH
OUR INTEGRATED RESOURCE PLAN
PROGRAM. UM LAST YEAR, WE
ELIMINATED SUBSIDIES FOR THE
EXTENSION OF GAS LINES. THIS
DECISION IS EXPECTED TO SAVE
RATEPAYERS ABOUT 480 MILLION
ANNUALLY IN THE NEAR TERM. UM WE
MODERNIZE OUR TARIFF FOR, UM,
ROOF FOR, UM, SELF GENERATED
SOLAR. UM AND THAT WILL HAVE
HELP TO CONTROL COSTS ON
ELECTRICITY BILLS GOING FORWARD.
UM WE'RE LOOKING AT IMPLEMENTING
A REASONABLE FLAT RATE COMPONENT
TO BILLS AGAIN AN OPEN
PROCEEDING. AND THAT FLAT RATE
IS BEING DEVELOPED AT THE SAME
TIME THAT WE'RE EXPLORING WAYS
TO DEVELOP DYNAMIC VARIABLE
RATES TO ENCOURAGE CUSTOMERS TO
USE ENERGY AT TIMES THAT
COMPLEMENT THE GRID COMPLEMENT
THE LARGE AMOUNT OF VARIABLE
RENEWABLE RESOURCES ON THE GRID.
UM WE ALSO I ALSO WANTED TO NOTE
JUST TWO PROGRAMS THAT ALSO, UM,
PROVIDE SOME RELIEF TO
RATEPAYERS. ONE IS, UM, THE
LEGISLATURE'S ACTION IN
IMPROVING THE CALIFORNIA
ARREARAGE MANAGEMENT PROGRAM,
OUR CAP, WHICH PROVIDED BILL
RELIEF TO CUSTOMERS IN
ARREARAGES, UH, DUE TO THE
COVID-19 PANDEMIC, THE I Ó U S¼
DISTRIBUTED 1.5 BILLION IN STATE
FUNDING TO CUSTOMERS WITH
ARREARAGES BETWEEN 2021 AND
2022. UM AND, UH SO I WILL
CONCLUDE THE HAIR. THANK YOU, UM
, FOR, UH, ALLOWING ME THE TIME
TO DO AN OPENING STATEMENT, AND
I'LL JUST SAY THAT AT THE PUC,
WE CONTINUE TO FOCUS ON COST
EFFECTIVE PROGRAMS WHERE WE CAN
TO ENHANCE EQUITY AND REDUCE
COSTS AND WE WILL CONTINUE TO
IMPROVE PRICE SIGNALS TO
INCENTIVIZE DEMAND RESPONSE.
ENCOURAGE ENERGY USAGE WHEN THE
GRID IS OPERATING, AT LEAST
STRESS AND WITH THE HIGHEST
PENETRATION OF CLEAN ENERGY.
WE'LL ALSO CONTINUE TO PLAN FOR
THE TRANSFORMATION AND HARDENING
OF THE DISTRIBUTION AND
TRANSMISSION SYSTEM TO ENHANCE
RESILIENCE AND PREPARE FOR
HIGHER LOAD AND HIGHER ADOPTION
OF ELECTRIC VEHICLES AND
ELECTRIC APPLIANCES. I'M REALLY
GRATEFUL TO HAVE HAD THE
OPPORTUNITY TO SPEAK WITH YOU
TODAY. UM, THANK YOU VERY MUCH.
I LOOK FORWARD TO YOUR
QUESTIONS. THANK YOU. PRESIDENT
REYNOLDS AND I'M SURE FOLKS HAVE
A NUMBER OF QUESTIONS FOR YOU.
BUT I THINK WE'LL HEAR, UH,
OPENING COMMENTS FROM ALL OF OUR
PANELISTS BEFORE WE JUMP INTO
THOSE, UM SO WITH THAT, LET'S GO
AHEAD AND TURN TO IS LINDA
SERIZAWA, UH, DEPUTY DIRECTOR OF
ENERGY FROM THE CALIFORNIA
PUBLIC ADVOCATES OFFICE. THANK
YOU FOR BEING HERE. THANK YOU.
GOOD AFTERNOON CHAIR PETRI
NORRIS, VICE CHAIR. PATTERSON
AND MEMBERS OF THE COMMITTEE. UM
I AND THANK YOU FOR THE
OPPORTUNITY TO PRESENT TODAY ON
THE VERY IMPORTANT TOPIC TOPIC
OF ELECTRICITY RATES AND
AFFORDABILITY. I AM LINDA SARA
ZAWA AND THE DEPUTY DIRECTOR OF
ENERGY AND JUST RECENTLY
DESIGNATED AS THE INTERIM
DIRECTOR OVER THE PUBLIC
ADVOCATE'S OFFICE. I'M HERE IN
PLACE OF MATT BAKER, WHO, UH,
WAS OUR DIRECTOR UP UNTIL
YESTERDAY WHEN HE WAS SWORN IN
TO BE A èC P èC COMMISSIONER.
SO UH BEFORE I, UH, TALK ABOUT
THE TOPIC AT HAND TODAY. I JUST
WANTED TO GIVE YOU A LITTLE BIT
OF INFORMATION ABOUT WHO WE ARE
AND WHAT WE DO. THE PUBLIC
ADVOCATE'S OFFICE HAS A
STATUTORY MANDATE OR OBLIGATION
TO REPRESENT RATEPAYERS WITH
AFFORDABILITY AS OUR NORTH STAR.
WE DO THIS THROUGH SCRUTINIZING
EVERY UTILITY PROPOSAL THAT
COULD RAISE COSTS TO CUSTOMERS.
UM TODAY. IN THIS PRESENTATION,
I WILL FOCUS ON HOW WE GOT TO
WHERE WE ARE WITH HIGH
ELECTRICITY RATES AND WHAT COULD
BE DONE ABOUT THEM TO ENSURE
THAT ELECTRICITY IS PROVIDED
RELIABLY SAFELY AND AFFORDABLY
AND CONSISTENT WITH THE STATE'S
CLIMATE GOALS. MOVING TO SLIDE
THREE. EXCUSE ME. THANK YOU. SO
RATES AND BILLS MY APOLOGIES FOR
INTERRUPTING. JUST I'M SO
COMMITTEE MEMBERS KNOW THESE
SLIDES ARE ALSO AVAILABLE IN
YOUR BACKGROUND MATERIALS. IF
THAT'S EASIER FOR FOLKS TO SEE.
THANK YOU. RATES AND BILLS HAVE
BEEN INCREASING UNSUSTAINABLY,
ESPECIALLY SINCE 2020 WHEN I
APPEARED BEFORE THIS VERY
COMMITTEE TO RAISE CONCERNS
ABOUT THE SCOPE AND SCALE OF
ELECTRICITY RATE INCREASES. UM,
TODAY, THE NUMBER OF CUSTOMERS
WHO ARE IN ARREARS AS OVER ONE
IN FIVE. THIS MEANS THAT OVER
ONE IN FIVE CUSTOMERS ARE LATE
IN PAYING THEIR ENERGY BILLS.
MOVING TO THE NEXT SLIDE. IN
ADDITION TO THREATENING
AFFORDABILITY, THESE RATE
INCREASES ARE INEQUITABLE AND
ALSO CHALLENGE OUR
ELECTRIFICATION GOALS. I'D ALSO
LIKE TO NOTE WITH RESPECT TO
THIS SLIDE THE LINE FOR S¼, Dð,
G, SAN EGO, GAS AND ELECTRIC
RATES, YOU'LL SEE THAT THERE'S A
DOWNWARD TICK AT THE END OF 2023
. WE EXPECT THAT TO BE VERY
SHORT LIVED, UH, WHEN THE
COMMISSION WILL ISSUE A LIKELY
ISSUE A FINAL DECISION IN THE
GENERAL CASE THIS YEAR, AT WHICH
POINT WE'LL SEE AN CHECK. MOVING
ON TO SLIDE FIVE. SO PRESENT,
REYNOLDS HAS HAS, UM, SPOKEN TO
THE INFORMATION ON THIS SLIDE,
AND I WON'T GO INTO INTO IT IN
GREAT DETAIL. UM IT LOOKS A
LITTLE DIFFERENT, BUT IT'S
BASICALLY THE SAME INFORMATION.
UM WHAT I DO WANT TO EMPHASIZE
IS THAT THE MAJOR COST DRIVERS
THAT WE'RE SEEING TODAY ARE
RELATED TO WILDFIRE MITIGATION
COSTS AS WELL AS, UH UH, THE
UTILITY WORK TO RECOVER SERVICE
AFTER CLIMATE DISASTERS, FLOODS,
MUDSLIDES, UH, WILDFIRES,
ETCETERA. AND WE ALSO ARE SEEING
COST DRIVER UH, A COST A MAJOR
COST DRIVER AS TRANSMISSION AND
DISTRIBUTION, UH, MAINTENANCE,
EXPANSION AND UPGRADES. SO THIS
RANGES FROM REPLACING OLD POLES
TO, UH UH, EXPANDING THE
DISTRIBUTION SYSTEM TO
ACCOMMODATE MORE ELECTRIC
VEHICLES. THESE COSTS HAVE ALSO
BEEN EXACERBATED WITH HIGHER
INTEREST RATES. AND
UNFORTUNATELY, UNLESS THERE'S
INTERVENTION, THESE COST DRIVERS
WILL CONTINUE. MOVING TO SLIDE
SIX. TOUCHED ON THIS A LITTLE
BIT EVERY YEAR BASED ON OUR
THOROUGH REVIEW OF DOZENS OF
UTILITY REQUESTS, WE PROPOSE
MORE AFFORDABLE ALTERNATIVES FOR
THE èC P èC TO CONSIDER. THIS
PARTICULAR SLIDE HIGHLIGHTS THE
PEACH EE GENERAL RAY CASE, WHICH
THE PU èC DECIDED LAST YEAR.
TEACHINGS REQUEST WAS THE
LARGEST WE'D EVER SEEN IN TERMS
OF A PROPOSED BUDGET. WE
RECOMMENDED OVER A $3 BILLION
DOWNWARD ADJUSTMENT BASED ON OUR
ANALYSIS AND ANALYSIS AND
RECOMMENDATIONS OF MORE
AFFORDABLE ALTERNATIVES. AND UH,
AS AN EXAMPLE WE PLACED MORE
EMPHASIS ON COVERED CONDUCTOR,
UH, WOULD VERSUS UNDERGROUND IN
WHICH TENDS TO BE MORE
EXPENSIVE. MOVING TO SLIDE
SEVEN. I DO WANT TO MENTION,
THOUGH, THAT THE UTILITIES ARE
ABLE TO REQUEST COST RECOVERY
OUTSIDE OF THE GENERAL CASE
PROCESS FOR COSTS INCURRED
SPECIFICALLY FOR WILDFIRE
MITIGATION AND, UH, RESTORING
SERVICE AFTER A CATASTROPHIC
EVENTS. THESE KINDS OF REQUESTS
ARE BECOMING MUCH MORE FREQUENT
AND SIGNIFICANT IN THEIR
AMOUNTS. I PROVIDE THIS
INFORMATION TO EMPHASIZE THAT
REQUEST MADE OUTSIDE OF THE
UTILITY PRIMARY GENERAL RAPE
CASE PROCESS MAKES IT VERY
DIFFICULT TO ANTICIPATE THE PACE
AND SCALE OF RATE INCREASES. PUT
ANOTHER WAY PROPOSALS TO RAISE
RATES OUTSIDE OF THE GENERAL
RATE CASE PROCEEDING MAKE IT
DIFFICULT TO REQUIRE THE
UTILITIES TO STICK TO THEIR
AUTHORIZED BUDGETS AND PAINT,
MAINTAIN RATE AND BILL
STABILITY. MOVING TO SLIDE
EIGHT. ALSO THE PRICE MOST
RATEPAYERS PAY IS INCREASING
EVEN FASTER THAN UTILITIES ARE
SPENDING. THIS IS FOR TWO
REASONS. FIRST CERTAIN SUBSIDIES
, CONCENTRATE COSTS ON FEWER
RATEPAYERS AND DRIVE UP
VOLUMETRIC RATES. FOR EXAMPLE,
ROOFTOP SOLAR PROGRAMS CONTINUE
TO SHIFT COSTS TO THOSE WHO DO
NOT HAVE SOLAR IN 2024. WE
ESTIMATE THIS COST SHIFT TO BE
$6.5 BILLION. THE SECOND. THE
SECOND REASON IS RAPE HAIRS ARE
ALSO PAYING FOR PROGRAMS THAT
ARE NOT COST EFFECTIVE. IN FACT,
OVER A BILLION DOLLARS STATEWIDE
IS SPENT ANNUALLY FOR PROGRAMS
THAT DO NOT COST EFFECTIVELY
ACHIEVE THE STATE'S ENERGY
GOALS. MOVING TO SLIDE NINE. SO
WHAT CAN WE DO? IS TO TRY TO
BEND THE COST CURVE DOWN SO RATE
INCREASES ARE LOWER THAN THE
RATE OF INFLATION. THIS WILL
TAKE A COMBINATION OF IMMEDIATE
RATE RELIEF MEASURES AND LONG
TERM REFORMS. WE LOOK AT
SOLUTIONS THROUGH THREE LENS.
FIRST HOLD UTILITIES ACCOUNTABLE
TO THEIR AUTHORIZED BUDGETS.
THIS MEANS RETURNING TO BASIC
BUDGETING AND COST CONTROL
MEASURES. AND ALSO INCLUDES NOT
AUTHORIZING NEW BALANCING
ACCOUNTS. KEEP IT FOR BASIC
SERVICE, KEEPING IN MIND THAT
BALANCING ACCOUNTS PROVIDE THE
UTILITY GUARANTEED COST RECOVERY
FROM RATEPAYERS. THE SECOND LENS
IS TO MAKE THE CLEAN ENERGY
TRANSITION MORE AFFORDABLE FOR
ALL CUSTOMERS. IN THE SHORT TERM
, WE SHOULD TAKE OUT ALL THE FAT
IN THE UTILITY BILLS. THIS MEANS
ELIMINATING COST INEFFECTIVE
PROGRAMS. AND THE LONGER TERM WE
NEED TO DESIGN ELECTRIFICATION
IN A WAY THAT PROVIDES DOWNWARD
PRESSURE ON RATES. AND THIRD, WE
NEED TO ADAPT TO INCREASING
WILDFIRE MITIGATION AND DISASTER
RECOVERY COSTS. RIGHT NOW, THESE
SPECIFIC COSTS ARE BEING BORNE
ON RATEPAYERS IMMEDIATELY. WE
NEED TO FIGURE OUT A WAY TO
SPREAD THESE COSTS OVER A LONGER
PERIOD OF TIME. IN CONCLUSION. I
WANT TO ACKNOWLEDGE THAT SOME
VERY DIFFICULT DECISIONS LIE
AHEAD IN ORDER TO PRIORITIZE
AFFORDABILITY AND ACHIEVE THE
STATE'S CLIMATE GOALS. WE THE
PUBLIC ADVOCATE'S OFFICE ARE
HERE TO BE A RESOURCE TO YOU.
AND TO SUPPORT YOU. AS YOU
CONSIDER THESE CHALLENGES AND
OPTIONS TO ADDRESS THEM. THANK
YOU. AND THANK YOU AND UM, I
REALLY APPRECIATE THE WAY THAT
YOU FRAMED THESE OPPORTUNITIES.
AND I KNOW WE WANT TO DIG INTO
TO SOME OF THESE, UM, IN MORE
DETAIL, AND, UM YOU KNOW WHEN WE
DO I THINK PRESIDENT REYNOLDS
WILL BE REALLY INTERESTED IN
YOUR PERSPECTIVE ON ON THESE
OPPORTUNITIES. UM, BUT BEFORE WE
DO THAT, WE WILL GO AHEAD AND
TURN. UH TO OUR NEXT SPEAKER.
UM, GRANT PARKS, OUR CALIFORNIA
STATE AUDITOR. THANK YOU FOR
BEING HERE. GOOD AFTERNOON. UH,
CHAIRMAN PETRIE-NORRIS CHAIRMAN
HART. MEMBERS OF THE COMMITTEE,
UM GRANT PARK STATE AUDITOR. THE
COMMITTEE ASKED ME TO PROVIDE AN
OVERVIEW OF AN AUDIT WE ISSUED
LAST AUGUST ON ELECTRICITY RATES
, AND IT STEMMED FROM A REQUEST
FROM A MEMBER BERNER, WHO HAD
REQUESTED THE AUDIT AFTER SEEING
UTILITY RATES QUICKLY RISE IN
HER DISTRICT IN EARLY 2022. UM
AS THE FIRST SLIDE SHOWS IN MY
PRESENTATION, ELECTRICITY RATES
HAVE INCREASED BY MORE THAN 50%
DURING THE LAST SEVEN YEARS, AND
THE AUDIT REQUEST. ASKED THAT WE
REVIEW THE GENERAL RATE CASE AND
OTHER PROCEEDINGS FOR SDG AND E
AND OTHER SIMILAR INVESTOR OWNED
UTILITIES SUCH AS PG AND E AND
S¼ E TO UNDERSTAND THE COST
DRIVERS BEHIND SOME OF THOSE
HIGHER RATES. OUR AUDIT LOOKED
AT OTHER AREAS. BUT FOR THE
PURPOSES OF TODAY'S PRESENTATION
, I WAS ASKED TO FOCUS PRIMARILY
ON COST DRIVERS. SO WITH RESPECT
TO COST DRIVERS, UM AS HAS BEEN
MENTIONED èC P èC ALLOWS
UTILITIES TO CHARGE ELECTRIC
OVER RATES THROUGH VARIOUS
MECHANISMS, AND THERE'S NÓ
SINGLE GO TO DOCUMENT THAT
EXPLAINS IN DETAIL WHY
ELECTRICITY RATES ARE INCREASING
. THE RATE SETTING PROCESS
BEGINS WITH THE GENERAL RATE
CASE EVERY FOUR YEARS WHERE
UTILITY RATES ARE BASED ON
FORECASTED COSTS AND EXPECTED
EXPENSES, ALONG WITH AN
AUTHORIZED RATE OF RETURN. AND
THERE ARE OTHER MECHANISMS AS
MENTIONED, SUCH AS COST RECOVERY
APPLICATIONS AND OTHER
MECHANISMS THAT FURTHER INCREASE
RATES AND ALSO RAISE RATES
PURSUANT TO PRIOR èC PU èC
ORDERS. REGARDLESS THE
ELECTRICITY RATE SETTING PROCESS
BEGINS WITH THE GR èC PROCESS,
AND THAT'S WHERE OUR AUDIT
BEGAN. REVIEWING THE MOST RECENT
AND THE PREVIOUS GENERAL CASES,
UH, FOR THE THREE UTILITIES THAT
WE LOOKED AT, AND WE FOUND THAT
èC PU èC HAS CONSISTENTLY BEEN
PROVING HIGHER OPERATING
EXPENSES FOR ALL THREE UTILITIES
. FOR EXAMPLE, S¼ èC E S¼
APPROVED OPERATING COSTS
INCREASED BY 37% FROM 2018 TO
2021 PG AND E S¼ APPROVED
OPERATING AT COSTS INCREASED BY
15. AND S¼ Tð GE INCREASES WE'RE
A LITTLE MORE MODEST AT 5. AND
WHEN WE LOOK AT THOSE INCREASES
IN OPERATING EXPENSES, THEY'RE
SPREAD OVER VARIOUS CATEGORIES
AND WE WERE TRYING TO FIGURE OUT
WHAT WERE SOME OF THOSE
CATEGORIES WHERE WE SAW THE MOST
DRAMATIC INCREASES. AMONG THOSE
INCLUDED ADMINISTRATIVE COSTS
FOR FUNCTIONS LIKE ACCOUNTING
FINANCE LEGAL SERVICES, FOR
EXAMPLE, S¼ èC E S¼ APPROVED
ADMINISTRATIVE COSTS WENT UP 77%
AN INCREASE OF 468 MILLION FROM
608 MILLION IN 2018 TO OVER A
BILLION DOLLARS IN 2021. WE ALSO
SEE LARGE INCREASE AND
DISTRIBUTION COSTS, AS HAS BEEN
PREVIOUSLY MENTIONED. THESE
INCLUDE THE COST FOR BUILDING
AND MAINTAINING SUBSTATIONS,
POLES, CIRCUITS AND ABOVE AND
BELOW GROUND SYSTEMS. PG S¼
APPROVED DISTRIBUTION COSTS
INCLUDE INCREASED BY 49% BETWEEN
THE TWO RAPE CASES WE REVIEWED
AND THE LARGEST INCREASE THAT WE
SAW FOR P AND G PERTAINED TO ITS
WILDFIRE MITIGATION EFFORTS,
SUCH AS THROUGH ITS TREE
TRIMMING OPERATIONS. AND THEN
ALSO AS UTILITIES REPLACE AGING
INFRASTRUCTURE, THEIR PLANT
PROPERTY AND EQUIPMENT. THEY
SPREAD THESE NEW COSTS OVER
THEIR USEFUL LIVES, AND THEY
PASS THOSE COSTS ON TO CONSUMERS
. SO NOT SURPRISINGLY, WE SAW
èC P èC APPROVE HIGHER
DEPRECIATION COSTS FOR EACH OF
THE THREE UTILITIES THAT WE
LOOKED AT WERE. THOSE COSTS
INCREASED BY AROUND 13 TO 21%
BETWEEN THE VARIOUS RAPE CASES
THAT WE REVIEWED. SO WE MOVE ON
TO MY NEXT SLIDE. BUT THE
GENERAL RAPE CASE IN THE
OPERATING COSTS THAT I'VE JUST
DESCRIBED AREN'T GIVING THE FULL
PICTURE OF WHY RATE INCREASES
ARE HAPPENING. UM THERE WAS A
SIGNIFICANT INCREASE IN
ELECTRICITY RATES BETWEEN 2022
AND 2020. THREE, AND WE FOCUSED
ON THAT. TO UNDERSTAND SOME OF
THE COST DRIVERS FOR WHY, AND IT
TURNED OUT BASED ON OUR ANALYSIS
THAT PLANNED INCREASES FROM THE
GENERAL RATE CASE ONLY APPEARED
TO EXPLAIN 10 TO 30% OF THAT
INCREASE. UM SOME OF THE OTHER
KEY COST DRIVERS NOT TALKED
ABOUT ALREADY IN MY PRESENTATION
INCLUDE THE RECOVERY OF HIGHER
THAN EXPECTED COSTS FOR FUEL AND
PURCHASE POWER. A SIGNIFICANT
PORTION OF THE ELECTRICITY
PRODUCED IN THE STATE USES
NATURAL GAS AND UTILITIES ALSO
PROCURE ELECTRICITY FOR DELIVERY
TO CONSUMERS. WE NOTED THAT S¼
Dð, G AND E, FOR EXAMPLE, NEEDED
AN ADDITIONAL 107 MILLION FOR
HIGHER THAN EXPECTED FUEL AND
ENERGY COSTS IN 2022, AND WHEN
WE LOOKED AT PG AND E AND S¼,
èC AND E, BOTH OF THEM NEED
NEEDED HUNDREDS OF MILLIONS OF
DOLLARS IN EXTRA REVENUE TO
COVER UNANTICIPATED COSTS IN
2022, AND WE SAW THE èC P èC
AUTHORIZING. I BELIEVE MORE THAN
A BILLION DOLLARS EACH FOR AN
ANTICIPATED OR EXPECTED HIGHER
THAN EXPECTED COSTS IN 2020
THREE. BEYOND HIGHER THAN
EXPECTED FUEL AND PURCHASE POWER
COSTS. WE ALSO SAW INCREASED
COSTS FOR TRANSMISSION. WE SEE
INCREASED COSTS FOR ALSO AS WELL
ENERGY EFFICIENCY PROGRAMS.
BEYOND UH, THE NEXT SLIDE BEYOND
THE INFORMATION THAT I JUST
SHARED. AND THAT'S ALREADY BEEN
MENTIONED. WILDFIRE MEDICATION
COSTS CONTINUE TO BE A
SIGNIFICANT COST FACTOR. UH, FOR
THE THREE UTILITIES WE LOOKED AT
. THEY REPORTED THAT WILDFIRE
MITIGATION EFFORTS MAKE UP
BETWEEN 7.5 TO 18.5% OF THEIR
TOTAL REVENUE REQUIREMENT IN
2021, AND THAT TREND APPEARS TO
BE INCREASING. AND I. I END MY
COMMENTS, UH, IN THE INTEREST OF
TIME WHERE WHEN WE LOOK AT
POTENTIAL SOLUTIONS AND
ACCOUNTABILITY FOR RAISING
ELECTRICITY RATES. WE THINK
THERE'S AN OPPORTUNITY FOR èC,
P, èC AND CAL ADVOCATES TO PLAY
A CLOSER ROLE AND FOCUSING ON
THE RATES OF RETURN THAT
UTILITIES ARE EARNING. UM
INVESTOR OWNED UTILITIES ARE
ENTITLED TO EARN A RATE OF
RETURN THAT IS REASONABLE AND
SUFFICIENT TO ATTRACT CAPITAL.
AND AN ACTUAL RATE OF RETURN MAY
BE HIGHER OR LOWER, BASED ON HOW
WELL A UTILITY DOES IT MANAGING
ITS COSTS. BUT GIVEN THAT A LOT
OF THESE COSTS ARE FORECASTED
COSTS, UM IN OUR VIEW, IT
CREATES A POTENTIAL INCENTIVE
FOR UTILITIES TO OVERSTATE WHAT
THEY'RE FORECASTED COSTS ARE AND
WHEN ACTUAL COSTS COME IN UNDER
THAT AMOUNT LATER, THEY CAN
CLAIM IT AS COST EFFICIENCIES
AND PASS IT OFF AS HIGHER RATES
OF RETURN FOR THEIR INVESTORS.
SO WE THINK THERE'S AN
OPPORTUNITY FOR CAL ADVOCATES
AND THE CPUC TO MAKE SURE THAT
WE'RE, UH, FOLLOWING A STANDARD
METHODOLOGY ON HOW WE'RE
MONITORING THE RATES OF RETURN
EARNED BY UTILITIES. UM TABLE
FOUR. I THINK MY LAST SLIDE
SHOWS THAT, FOR EXAMPLE, THE SAN
DIEGO GAS AND ELECTRIC UH I
THINK FOR 14 OUT OF 17 YEARS
BEAT THE AUTHORIZED RATE OF
RETURN THAT THE èC PU èC
AUTHORIZED, WHICH WAS INCREDIBLY
DIFFERENT. FROM THE EXPERIENCE
OF PG AND E AND S¼ èC E. AND SO
AGAIN, I'M NOT SAYING THAT
UTILITIES AREN'T ENTITLED TO
EARN A REASONABLE RATE OF RETURN
. BUT WHEN WE HAVE OUTCOMES LIKE
THAT, I THINK IT RAISES SOME
QUESTIONS ABOUT WHAT ARE WE
DOING WHEN WE'RE SETTING THE
REVENUE BAR AND IS THERE
OPPORTUNITIES TO GO BACK AT THE
SUBSEQUENT GR èC PROCESS TO
MAKE SURE BOTH ADVOCATES AND
CPUC CAN IDENTIFY THESE
EFFICIENCIES AND MAKE SURE
THEY'RE NOT CONTINUING TO BE
PASSED OFF AS AS MORE PROFIT IN
SUBSEQUENT YEARS. SO WITH THAT,
UH, THOSE ARE MY COMMENTS. THANK
YOU. UH, THANKS FOR JOINING US
TODAY. WE APPRECIATE THAT. UM
ALL RIGHT. WE'LL GO AHEAD AND
NOW TURN TO, UH MICHAEL WARRA,
WHO IS THE DIRECTOR OF THE
CLIMATE AND ENERGY POLICY
PROGRAM AND THE SENIOR DIRECTOR
FOR POLICY OF THE SUSTAINABILITY
ACCELERATOR FROM STANFORD
UNIVERSITY. THANKS FOR BEING
HERE. THANK YOU VERY MUCH FOR
HAVING ME. OH, I SHOULD TALK TO
THE MIC. UH, THANK YOU VERY MUCH
FOR HAVING ME. UH, CHAIRMAN
PETRIE-NORRIS, UH SHERMAN HART
AND MEMBERS OF THE COMMITTEE.
I'M GONNA SPEND MOST OF MY TIME
TALKING ABOUT WHAT I SEE AS
POTENTIAL SOLUTIONS ON THIS
ISSUE AND A LITTLE BIT LESS TIME
TALKING ABOUT THE COST DRIVERS.
I WOULD JUST SAY I ENDORSE
ESSENTIALLY EVERYTHING THAT'S
BEEN SAID THIS MORNING. UM SEE,
AND I AND I SEE THE KEY COST
DRIVERS AS WILDFIRE. UM THE NEED
, UH, TO INVEST IN THE SYSTEM TO
ACHIEVE OUR CLIMATE GOALS. UM
AND THE COST SHIFT DUE TO N ONE
AND NEM TWO, ESPECIALLY THE
SURGE OF UH, ROOFTOP SOLAR
CUSTOMERS THAT GOT IN UNDER THE
WIRE ON THEM, TOO, AS THE
TRANSITION TO THE NEW RATE
STRUCTURE WAS OCCURRING. UM I
WOULD JUST ADD. I. I THINK IT'S
REALLY IMPORTANT TO RECOGNIZE
THE HUMAN IMPACTS OF THIS
AFFORDABILITY CRISIS. UM THAT IT
IS NOW IT IS NOT SOMETHING IN
THE FUTURE. AND THAT AT LEAST
THE BEST EVIDENCE FOR HOW HIGHER
ELECTRICITY RATES AFFECT LOW
INCOME. CONSUMPTION ACTUALLY
COMES FROM ARIZONA, WHERE
STUDIES HAVE BEEN DONE TO LOOK
AT LOW AND MODERATE INCOME.
USAGE OF AIR CONDITIONING DURING
VERY HOT EVENTS. AND OF COURSE,
WE HAVE HOT PLACES IN
CALIFORNIA, TOO. UM AND THE
EVIDENCE STRONGLY SUGGESTS THAT
LOW INCOME ARIZONA RESIDENTS DO
NOT USE THEIR AIR CONDITIONING
BECAUSE THEY CANNOT AFFORD TO
PAY THEIR ELECTRICITY BILLS IN
WAYS THAT ARE DANGEROUS TO
PUBLIC HEALTH AND THAT WHEN
RATES GO UP, THOSE LOW INCOME
PEOPLE ARE AFFECTED MOST, SO WE
REALLY NEED TO BE THINKING ABOUT
THIS, AS YOU KNOW, A CRISIS THAT
IS NOW AND THAT AND WHERE
HELPING PEOPLE TO AFFORD THAT
MINIMUM LEVEL OF ELECTRICITY IS
ESPECIALLY IMPORTANT. UM SO
OPTIONS. HOW COULD WE? HOW COULD
WE ADDRESS THIS SITUATION? HOW
COULD WE TAKE CONSTRUCTIVE,
INCREMENTAL STEPS? THIS IS A TO
MAKE THE SITUATION BETTER. UM AT
THE HIGH LEVEL AT THE HIGHEST
LEVEL. I THINK IT IS VERY
IMPORTANT TO THINK ABOUT GETTING
NON-ESSENTIAL SERVICES AS GOOD
AS THEY ARE OUT OF RATES AND
INTO THE GENERAL FUND OR THE
GGRF. UM, I REALIZE THIS YEAR IN
PARTICULAR THAT IS A VERY
DIFFICULT THING TO SUGGEST TO
ALL OF YOU. YOU FACE A VERY
CHALLENGING BUDGET SITUATION,
BUT THE PRACTICES OF THE PAST OF
KIND OF PUTTING THINGS INTO
RATES. UM I'VE HEARD SOMEONE
REFER TO ELECTRICITY RATES AS
TAXATION WITHOUT REPRESENTATION.
WITH ALL DUE RESPECT TO THE
COMMISSION, IT IS A DIFFERENT
POLITICS THAN THAN THE THAN THE
POLITICS OF REVENUE AND SPENDING
IN THIS BUILDING. UM BUT WE NEED
TO THINK ABOUT HOW TO MOVE
NON-ESSENTIAL. THINGS OUT
SERVICES INVESTMENTS OUT OF
RATES. WE ALSO NEED TO THINK
VERY HARD ABOUT HOW TO SPEND
COST EFFECTIVELY TO PROVIDE THE
ENERGY SERVICES WE NEED. UM
MAINTAIN. AND I AND I GUESS,
LASTLY, I'D SAY I THINK THERE IS
REAL VALUE AND WE'VE LIVED IT,
UM, OVER THE LAST SEVERAL YEARS
IN ENSURING THAT WHATEVER WE DO
WE MAINTAIN HEALTHY, INVESTOR
OWNED UTILITIES SO THAT THEY CAN
FINANCE THE NEEDED
INFRASTRUCTURE WE HAVE TO BUILD
IN THIS STATE COST EFFECTIVELY.
THERE IS NÓ NÓ ONE WINS WHEN
CALIFORNIA I Ó U ARE NOT
INVESTMENT GRADE. UM SO WHAT
MIGHT WE DO? I'M JUST GONNA GO
THROUGH FIVE IDEAS. UM THE FIRST
ONE IS TO DO MORE AND BETTER
WILDFIRE SPENDING TO REDUCE THE
CONSEQUENCES OF IGNITIONS RATHER
THAN TRYING TO PREVENT ALL
UTILITY IGNITIONS. THE UTILITIES
IN CALIFORNIA ARE ESSENTIALLY
THE INSURERS OR THE REINSURERS
OF ALL UTILITY IGNITIONS BECAUSE
OF INVERSE CONDEMNATION. THAT
MEANS THAT THEY ARE WILLING TO
SPEND WHATEVER IT TAKES TO
REDUCE IGNITIONS TO ZERO THAT IS
NOT COST EFFECTIVE FOR THE STATE
. WE NEED TO BE SPENDING TO
INCREASE LANDSCAPE RESILIENCE TO
WILDFIRE SO THAT WHEN WILDFIRES
OCCUR, IT IS LESS LIKELY THAT
THEY WILL TURN INTO CATASTROPHIC
CONFLAGRATIONS THAT DESTROY
COMMUNITIES AND NOT,
INCIDENTALLY, FOR MANY OF US
DESTROY OUR ABILITY TO GET
HOMEOWNERS INSURANCE COVERAGE.
SO I WOULD COMMEND A BILL THAT
SENATOR DODD INTRODUCED S¼ B
1014 THAT SEEKS TO CREATE A
STRATEGIC SPENDING FRAMEWORK
THAT IS VERY SIMILAR TO THE
WILDFIRE MITIGATION PLANNING
THAT UTILITIES DO, BUT FOR THE
ENTIRE STATE FOR ALL HANDS AND
ALL LANDS, AND WE REALLY NEED
THAT WE NEED TO INCREASE THE
AMOUNT OF MONEY WE SPEND.
APPROXIMATELY $10 BILLION ON
UTILITY WILDFIRE MITIGATION. WE
SPEND LESS THAN A BILLION
DOLLARS ON ALL OTHER KINDS OF
WILDFIRE MITIGATION IN
CALIFORNIA THAT IS HIGHLY COST
INEFFECTIVE, AND IT NEEDS TO
CHANGE. SECOND IDEA AND I SHOULD
JUST SAY THAT'S NOT SOMETHING
THAT'S GOING TO FIX RATES RIGHT
AWAY. THAT IS A LONG TERM FIX,
BUT IT COULD. IT COULD CREATE
IMPORTANT, UM, LONG TERM
DOWNWARD PRESSURE ON RATES.
SECOND SUGGESTION. WE NEED TO
FIND WAYS TO REDUCE THE CROSS
SUBSIDY THAT EXISTS FOR ROOFTOP
SOLAR CUSTOMERS. VÆ AND I WOULD
ARGUE THAT THE APPROACHES TAKEN
TO DATE. UM CREATE A LOT OF
POLITICAL PUSHBACK. I DON'T
THINK THAT'S A CONTROVERSIAL
THING TO SAY, UM AND I WOULD
SUGGEST THAT THERE ARE OTHER
ALTERNATIVES THAT MAY CREATE
LESS PUSHBACK BUT COULD REDUCE
THAT CROSS SUBSIDY SUBSTANTIALLY
SPECIFICALLY TOO MANY NEM, TOO,
AND NEM ONE CUSTOMERS DO NOT
HAVE STATIONARY STORAGE
ASSOCIATED WITH THEIR ROOFTOP
SOLAR INSTALLATIONS. IF WE WERE
TO CREATE A PROGRAM THAT
PROVIDED BATTERIES TO ROOFTOP
SOLAR CUSTOMERS, SOME SORT OF
SUBSIDY, NOT PAYING FOR THE
WHOLE THING BY PAYING FOR IT
INCREMENT. AND TRYING TO PUSH
BATTERIES ONTO THOSE SYSTEMS AND
IN EXCHANGE FOR THAT SUBSIDY.
CREATING A SIGNIFICANT DEGREE OF
CONTROLLABILITY FOR THE GRID
OPERATOR OR FOR THE LOAD SERVING
ENTITIES DURING, UM ENERGY. UM
TIMES OF TIMES OF SHORTAGE ON
THE GRID. THOSE HOT AUGUST
AFTERNOONS I THINK THERE COULD
BE A COST EFFECTIVE PROGRAM BOTH
FOR SOCIETY AND FOR THE
CUSTOMERS, AND IT WOULD NOT
CREATE THE POLITICAL PUSHBACK
ASSOCIATED WITH AN ATTEMPT TO
RENEGOTIATE THE DEAL, AND I
THINK I THINK THERE'S A SENSE
THAT A DEAL IS A DEAL FOR THE
PEOPLE THAT HAVE THEM, TOO, AND
THE REPEATED ATTEMPTS TO CHANGE
THAT DEAL IN VARIOUS WAYS.
CREATE THE PUSHBACK. WE NEED TO
COME WITH SOMETHING MORE THAT IS
COST EFFECTIVE FOR THE STATE.
SOCIETALLY COST EFFECTIVE
DOESN'T GIVE THOSE CUSTOMERS TOO
MUCH MONEY, BUT THAT CAN CHANGE
HOW THE SYSTEMS ARE USED TO
REDUCE THE NETTING AND TO
INCREASE THE GRID SERVICES OF
THOSE SYSTEMS HAVE TO AT LEAST
THE POTENTIAL TO PROVIDE BUT DO
NOT TODAY. I WOULD ARGUE THAT
ANY SUBSIDY LIKE THAT SHOULD BE
PAID FOR OUT OF GGRF NOT FROM
RATES, RIGHT? TAKE IT FROM THE
CLIMATE, THE CLIMATE PROGRAMS
NOT FROM ELECTRICITY RATEPAYERS.
UM SPEAKING OF GGRF. THIS IS
ALSO I'M I'M GOING TO BE THE
PERSON THAT SAYS, I MEAN, MAYBE
THESE ARE NOT POLITE THINGS TO
SAY IN THIS ROOM, BUT WE DO NOT
SPEND GGRF. IN A WAY THAT IS
STRATEGICALLY ALIGNED WITH THE
BROAD SUCCESS THAT WE ARE HAVING
IN OUR CLIMATE POLICIES IN
CALIFORNIA. WE NEED TO BE
SPENDING GGRF TO DO TWO THINGS
FIRST THING. ZERO CARBON
ELECTRICITY SYSTEM SECOND THING
ELECTRIFY THE USES THAT WE CAN
TODAY. RIGHT SO THAT'S THE 80%
OF THE PROBLEM. AND THEN THAT
WHAT I REALLY MEAN BY THAT IS
TRANSPORT. UM GRF IS SPENT FOR A
WIDE VARIETY OF PRIORITIES, AND
I THINK IT IS TIME PARTICULARLY
AS THE CAP AND TRADE ALLOWANCE
DOLLARS ARE GROWING QUITE
DRAMATICALLY. RIGHT? WE JUST HAD
AN AUCTION CLOSE AT $42 A TON.
THAT'S UP 10% FROM THE Q FOUR
AUCTION IN 20 THREE AND WE ARE
ON A 10% PER AUCTION SORT OF
TRAJECTORY. UM THE MODELING
SUGGESTS THAT PRICES ARE GONNA
GO EVEN HIGHER THAN THAT OVER
THE NEXT COUPLE OF YEARS. SO WE
SHOULD BE THINKING STRATEGICALLY
. HOW CAN WE USE THOSE RESOURCES
TO HELP? THE PUC AND THE
UTILITIES ACCOMPLISH THE CLIMATE
GOALS THAT WE HAVE LAID OUT S¼ B
350 S¼ B 100. S¼ B 32, RIGHT.
HOW DO WE INVEST IN THE SYSTEM?
AND THIS WILL MEAN YOU KNOW,
INVESTING PUBLIC DOLLARS THAT
WILL NOT GENERATE A RATEPAYER
RETURN, BUT I THINK THERE'S
PLENTY OF RATEPAYER RETURN TO GO
AROUND AT THIS POINT. UM SO I
WOULD. I WOULD ARGUE THAT WE
NEED TO THINK STRATEGICALLY
ABOUT THAT. YOU ALL ARE GOING TO
PROBABLY HAVE AN OPPORTUNITY TO
THINK STRATEGICALLY ABOUT THAT.
AS WE APPROACH THE EXPIRATION OF
THE CURRENT, YOU KNOW, A B THREE
198 ENABLED CAP AND TRADE
PROGRAM. I WOULD ALSO ARGUE, UM
THINKING ABOUT EXTENDING THIS
SORT OF THINKING ALONG WHERE?
YOU KNOW WHERE ARE THERE? OTHER
POTS OF MONEY. UM EVERY THREE
MONTHS. MY WIFE WHO PAYS OUR
BILLS IS PROFOUNDLY CONFUSED BY
OUR ELECTRIC BILL BECAUSE WE GET
A GIANT CREDIT FROM PGE. THANK
YOU, PGE THAT REFLECTS THE VALUE
OF ALLOWANCES, UM, SOLD AT AN
AUCTION AND IS REBATED TO
CUSTOMERS. THE CLIMATE CREDIT
NOW I AM A HIGH INCOME
CALIFORNIAN. I DO NOT DESERVE
THAT CREDIT AT THIS POINT. I
THINK I THINK THERE IS
FLEXIBILITY TO USE THAT MONEY TO
SUPPORT LOW AND MODERATE INCOME
RATES AND TO DO THAT, ON A
MONTHLY BASIS RATHER THAN A
QUARTERLY BASIS. RECOGNIZING THE
LIQUIDITY CONSTRAINTS LIKE THE
FACT THAT THE PEOPLE THAT REALLY
NEED LOWER ELECTRICITY RATES ARE
NOT ME, BUT ARE PEOPLE WHO ARE
STRUGGLING TO MAKE THEIR MONTHLY
RENT PAYMENT TO BUY FOOD FOR
THEIR KIDS AT THE END OF THE
MONTH AND TO PAY THEIR UTILITY
BILLS AS WE SAW IN THE EVIDENCE,
UM EARLIER. SO I THINK,
REFOCUSING THAT CLIMATE CREDIT
ON THE PEOPLE THAT NEED IT.
MOST. IS AN IMPORTANT
CONSIDERATION FOR THE NEXT FEW
YEARS, AND THAT COULD MAKE A
REAL DIFFERENCE TO THOSE PEOPLE
TODAY. LASTLY, AS HAS BEEN
DISCUSSED. WE'RE SPENDING A LOT
OF MONEY IN THE DISTRIBUTION AND
TRANSMISSION SYSTEM RIGHT NOW.
AND WE'RE GOING TO NEED TO SPEND
MORE MONEY IF YOU LOOK AT THE I
S¼ Ó, UH, 20 YEAR. LOOK AHEAD,
THE TRANSMISSION THE SORT OF
LONGEST TIME FRAME TRANSMISSION
PLANNING THAT THE I S¼ Ó DOES.
IT'S REALLY CLEAR THAT WE NEED
TO BUILD A LOT OF THINGS WE NEED
TO PUT STEEL IN THE GROUND OVER
THE NEXT FEW DECADES. IF WE'RE
GOING TO ACHIEVE OUR CLIMATE
GOALS. I PERSONALLY THINK THOSE
GOALS ARE VERY IMPORTANT. THEY
ARE CRITICAL POLICY GOALS FOR
CALIFORNIA AND, FRANKLY FOR
DEMONSTRATING A PROOF OF CONCEPT
OF A PROSPEROUS, LOW CARBON
SOCIETY AT THE SCALE OF 40
MILLION PEOPLE. THEY ARE ALSO
NOT GONNA BE FREE. AND AS I SAID
, LOOKING AT RATES WHERE THEY
ARE NOW AND WHERE THEY MAY GO IN
THE FUTURE. I DO THINK THAT
THERE ARE IT IS WORTH
CONSIDERING WHETHER WE SHOULD
EVALUATE SOME KIND OF AN
ALTERNATIVE FINANCING MECHANISM
OUTSIDE OF THE NORMAL RATE
PROCESS MORE AKIN TO
SECURITIZATION. TO FINANCE SOME
INCREMENT OF THAT BUILD OUT, AND
WE COULD PUT SOME BOUNDARIES
AROUND THAT IDEA, RIGHT? AN IDEA
THAT WOULD YOU KNOW BE LIMITED
SO THAT THE BASIC BUSINESS MODEL
OF THE INVESTOR OWNED UTILITIES
IS PRESERVED AND MAINTAINED AND
PROTECTED, BUT ALSO RECOGNIZES
THAT WE FACE A HISTORIC
INVESTMENT AND THAT SOMETIMES
YOU HAVE TO DO DIFFERENT THINGS
TO GET OVER THAT TRANSITION
PROCESS. UM AND SO I THINK IT'S
WORTH EVALUATING WHETHER WE
COULD MAKE THAT KIND OF A
PROGRAMMATIC INVESTMENT AS A
STATE AND FINANCE IT OUTSIDE OF
THE, UM, THE NORMAL GRC PROCESS.
THANK YOU VERY MUCH FOR THE
OPPORTUNITY TO PRESENT THESE
IDEAS AND I LOOK FORWARD TO YOUR
QUESTIONS. AND THANK YOU, UH,
PROFESSOR WARA, AND I'M GONNA
REVERSE WHAT I EARLIER SAID,
BECAUSE I KNOW PRESIDENT
REYNOLDS, UM AND ST AR PARKS ARE
GOING TO NEED TO LEAVE AT THREE.
SO I WANNA GIVE, UM MEMBERS OF
THE COMMITTEE AN OPPORTUNITY TO
ASK THEM QUESTIONS BEFORE THEY
GO, AND THEN WE'LL TURN TO OUR
OUR OTHER PANELISTS AND DIG
INTO, UM TO THOSE PRESENTATIONS,
AND I GUESS I'LL ACTUALLY I'LL
START I'M GONNA PICK UP. UM
PRESIDENT REYNOLDS ON WHAT? UM
THE POINT THAT MISTER WIRA
CLOSED ON WHICH IS GIVEN, UH,
THE MAGNITUDE OF THIS
TRANSITION. DO WE NEED TO THINK
ABOUT THE WAY THAT WE ARE, UH,
FINANCING THE COST OF OUR CLEAN
ENERGY TRANSITION DIFFERENTLY.
DO WE NEED TO MAKE SOME
PROGRAMMATIC CHANGES TO THE WAY
THAT I'VE BEEN KIND OF THINKING
ABOUT IT? IT FEELS LIKE RIGHT
NOW WE'VE GOT THIS LIKE ENORMOUS
EGG THAT WERE, YOU KNOW, LIKE
THE SNAKE IS TRYING TO DIGEST
IT. DOES THAT REALLY MAKE SENSE?
UM OR DO WE NEED TO TAKE A STEP
BACK AND THINK THROUGH
ALTERNATIVE FINANCING MODELS?
WHAT ARE THE OPPORTUNITIES
ASSOCIATED WITH THAT AS YOU SEE
THEM? YEAH, I. I THINK IT'S A
REALLY GOOD QUESTION, AND I
THINK IT IS HELPFUL TO BE CLEAR
ON THE WHETHER WE'RE TALKING
ABOUT A DIFFERENT FINANCING
MODEL THAT WOULD STILL BE FUNDED
THROUGH RATES SO YOU CAN FINANCE
THROUGH, UM, FEDERAL LOAN
PROGRAMS THAT AS WE'VE SEEN DONE
HISTORICALLY, BUT THOSE LOANS
ARE REPAID BY RATEPAYERS. OR ARE
WE TALKING ABOUT DIFFERENT
SOURCES FOR THE REPAYMENT? SO
WOULD THE REPAYMENT BE DONE
THROUGH SOME PROGRAM OUTSIDE OF
RAIDS? UM I THINK THAT THAT PART
IS A LOT HARDER IF YOU'RE GONNA
LOOK FOR, YOU KNOW, SOME KIND OF
BONDING. SOME KIND OF, YOU KNOW,
PART OF CLIMATE BOND. SOMETHING
LIKE THAT IS DIFFERENT AND NOT
SOMETHING THAT I CAN, YOU KNOW,
REALLY COMMENT ON SO FOR BECAUSE
IT'S NOT OUTSIDE OF THE SCOPE OF
WHAT I DO, RIGHT? I YOU KNOW, I
HAVE CONTROL OVER WHAT AND HOW
RATEPAYERS PAY FOR THINGS FROM A
PERSPECTIVE OF RATES. IT UM
ABSOLUTELY IS BETTER TO DO THE
LATTER TO HAVE SOME KIND OF
OTHER SOURCE OF FUNDING WITH
RESPECT TO THE FORMER THERE.
THERE ARE AND I THINK IT IS
IMPORTANT TO THINK ABOUT CHEAPER
FINANCING. RIGHT SO, UM, CAPITAL
PROJECTS BY THE UTILITIES ARE
FINANCED THE UTILITIES, UH,
RAISE CAPITAL THROUGH EQUITY AND
DEBT, AND THEY ARE ALLOWED TO
HAVE A RATE OF RETURN ON THOSE
IN INVESTMENTS THAT ARE MADE. UM
AGAIN. I REPAID BY RATEPAYERS.
THEY DO THE FUNDING THINGS IN
THAT WAY, SPREADS OUT THE COSTS
OVER TIME, WHICH IS HELPFUL FOR
IMMEDIATE IMPACTS FOR RATEPAYERS
. BUT WE HAVE ENCOURAGED ALL OF
THE BEST ROAD. UTILITIES TO SEEK
FINANCING FROM FEDERAL
OPPORTUNITIES. UM SO LOOK FOR
WAYS TO TAKE ADVANTAGE OF ANY
KIND OF LOAN PROGRAMS OR GRANT
PROGRAMS AS WELL. TO THE EXTENT
THOSE ARE AVAILABLE TO UTILITIES
, AND WE WOULD CONTINUE TO
ENCOURAGE THE UTILITY TO DO
THAT, IF IT IS DONE IN A WAY
THAT DOESN'T ACTUALLY ADD COSTS,
BUT SEEKS TO DISPLACE YOU. YOU
REALLY WANT TO SUPPLANT THE
RATEPAYER FUNDING VERSUS ADD NEW
COSTS TO THE SYSTEM. UM SO I
THINK IT IS, UM A REALLY
IMPORTANT THING TO LOOK AT. I
GUESS MAYBE THE OTHER THING I'LL
SAY IS THAT WE HAVE MORE AND
MORE SEEN, UM, PRIVATE
INVESTMENT IN A TRANSMISSION
DEVELOPMENT. SO HISTORICALLY,
THE UTILITIES HAVE BEEN THE ONES
WHO HAVE BUILT AND MAINTAINED,
UH, TRANSMISSION INFRASTRUCTURE.
WE HAVE A PROCESS NOW. WHERE AS
PROFESSOR WAR I MENTIONED KO
DOES, UM, TENURE PLANNING.
THEY'VE DONE A 20 YEAR OUTLOOK,
AND THEN THEY DO COMPETITIVE
SOLICITATIONS FOR TRANSMISSION
PROJECTS. SO WHAT WE'RE SEEING
IS PRIVATE DEVELOPERS, UM, WHO
HAVE, UH, BECOME STARTED TO
BUILD TRANSMISSION? THAT'S PART
THAT'S ALSO PAID FOR BY
RATEPAYERS, BUT THAT COMPETITION
CAN BE HELPFUL. UM AND I GUESS
TO YOUR QUESTION ABOUT WHETHER
OR NOT I THINK YOUR INITIAL
RESPONSES ARE WE TALKING ABOUT,
UH, YOU KNOW, CHANGES TO THE WAY
THAT RATES ARE FINANCED, BUT
IT'S STILL PASSED ON AS RATES.
ARE WE TALKING ABOUT ALTERNATIVE
FINANCING? I DON'T KNOW. YOU
KNOW WHAT OTHER COMMITTEE
MEMBERS PERSPECTIVE IS I. I
THINK THAT IN ORDER FOR THIS
TRANSITION TO BE TENABLE FOR
CALIFORNIANS AND AFFORDABLE I
THINK WE NEED TO BE TALKING
ABOUT BOTH. UM AND I THINK WE'VE
GOT TO BE REALLY CLEAR EYED, UM
AND HONEST ABOUT THE COST OF OUR
CLIMATE TRANSITION. AND HOW
WE'RE GOING TO FINANCE THAT. UM
AND I THINK YOU KNOW, WE ALL
RECOGNIZE THAT THOSE ARE VITALLY
IMPORTANT AND CRITICAL GOALS. UM
BUT THEY'RE NOT FREE. AND I
THINK THAT TOO OFTEN WE'VE KIND
OF THOUGHT THAT WE COULD SET
THESE GOALS, WAVE MAGIC WAND AND
MAKE IT HAPPEN AND THAT'S NOT
HAPPENING RIGHT NOW. SO I THINK
WE NEED TO BE REALLY HONEST WITH
OURSELVES ABOUT THAT HONEST
ABOUT THOSE TRADEOFFS, UM AND
POTENTIALLY OPEN UP SOME
CONVERSATIONS, WHICH YOU KNOW MR
WIRE TO USE YOUR PHRASE, MAYBE,
OR POLITICALLY UNCOMFORTABLE,
RIGHT? UM BECAUSE THERE'S NOT
THERE'S NÓ EASY ANSWER. IT'S NOT
THAT THERE'S AN EASY ANSWER, AND
WE'RE JUST MISSING IT. I IF I
MAY ADD ONE MORE POINT, UM, IT
WE ARE NOW IMPLEMENTING S¼ B 884
, WHICH IS A REQUIREMENT THAT WE
CONSIDER UTILITIES. UH, A 10
YEAR. WILDFIRE UM, UH,
UNDERGROUND PLAN, AND SO
NORMALLY WE WOULD DO FOUR YEARS
THROUGH GENERAL RAY CASE, BUT,
UM THROUGH S¼ B 884. WE ARE
ACCEPTING APPLICATIONS FROM
UTILITIES FOR 10 YEAR APPROVALS
FOR UNDERGROUND PLANS WHERE WE
HAVE DEVELOPED THE RULES FOR
THAT. PROGRAM WE'RE ALSO WORKING
WITH THE OFFICE OF ENERGY
INFRASTRUCTURE SAFETY. UM Ó E.
I S¼ UH TO, UH, WHO ALSO WILL BE
REVIEWING THESE 10 YEAR PLANS.
SO WE MAKE SURE THAT THE PLANS
AND THE UNDERGROUND IS TARGETED
TO THE MOST RISKY AREAS, BUT AS
PART OF OUR APPROVAL, WE'VE
DIRECTED THE UTILITIES TO BEFORE
THEY COME TO RAPA TO SEEK OTHER
SOURCES OF FUNDING. AND SO
THAT'S BEEN AN IMPORTANT THING
AND SOMETHING THAT WE WILL BE
LOOKING FOR WHEN THEY, UM, FUND
THOSE UNDERGROUND PLANS. OK I'VE
GOT LIKE PAGES OF QUESTIONS, BUT
IN THE INTEREST OF TIME, I WILL
OPEN IT UP TO COMMITTEE MEMBERS,
UM ASSEMBLY MEMBER WOULD THANK
YOU. AND THANK YOU TO YOU TO THE
WITNESSES HERE TODAY AND I'LL
I'LL I'LL I'LL BE BRIEF, WHICH
IS HARD FOR ME, BUT I DO WORK
WORK REAL HARD AT IT. SO, UM
WE'VE HEARD. I THINK, UH,
PRESIDENT REYNOLDS. YOU TALKED,
OR I'VE HEARD VARIETY TIMES
ABOUT INCREASING COSTS OF
TRANSMISSION. AND SO I KNOW
THERE'S A LOT OF FACTORS THAT
THAT PROBABLY GO INTO THAT. UM
I. I DO WANT A QUESTION I'VE
ASKED. ASKED AT LAST. THE
HEARING BEFORE LAST WAS ABOUT,
UH, WHERE WE ARE IN THE, UH 131
Dð HEARING, WHICH IS SUPPOSED TO
HELP STREAMLINE THAT PROCESS. UM
WHEN DO WE EXPECT TO, UH,
CONCLUDE THAT HERE THAT HEARING
AND UH SO THAT WE CAN ACTUALLY
GET POINT AND THEN AS A FOLLOW
UP TO THAT, KNOWING THAT
TRANSMISSION CAN TAKE UP TO A
DECADE TO, UM, TO COMPLETE OR OR
MORE AS WE, UH, WE SAW IN THE
LAST, UM ARE DOES THE èC èC
èC PU SEATS HAVE PLANNED TO, UM
, IMPLEMENT THE 270 DAY TIMELINE
THAT OTHER, UM INTERESTED
PARTIES HAVE AGREED TO, UH, TO
RESOLVE DISPUTES RELATED TO
ENVIRONMENTAL IMPACT REPORTS. UM
SO LET'S SEE THERE. THERE ARE A
COUPLE OF PARTS TO THAT
QUESTION. I'LL MAKE SURE I TRY
TO GET TO ALL OF THEM. SO ON 131
Dð, UM, IT IT IS AN OPEN
PROCEEDING. WE JUST FINISHED, UM
, THE FIRST PHASE OF THAT TO
IMPLEMENT STATUTORY, UH,
DIRECTION, UM, TO DO THE KIND OF
THE FIRST PART OF STREAMLINING
WE'RE NOW IN THE PROCESS OF
LOOKING FOR ADDITIONAL WAYS TO
STREAMLINE. I NEED TO GET YOU
THE DATES OF WE HAVE A SCHEDULE
SET OUT AND SO I CAN FOLLOW UP
WITH YOUR OFFICE ON THAT. IT IS
A PROCEEDING. THAT'S OPEN. NOW
THAT WE'RE ACTIVELY WORKING ON.
WE'RE ALSO, UM, COORDINATING
WITH, UM UH WITH KAISER èC E
èC LOOKING FOR WAYS TO REALLY
TRY TO STREAMLINE AND THINK
ABOUT TRANSMISSION DIFFERENTLY
TO THE EXTENT THAT WE DO
APPROVALS BECAUSE WE KNOW WE'RE
GOING TO HAVE MORE WORK COMING
IN THAN WE TYPICALLY HAVE.
RIGHT. WE NEED TO ACT FASTER.
WE'LL HAVE MORE PROJECTS TO LOOK
AT. UM AND WE DON'T HAVE THE
LUXURY OF TIME SINCE WE NEED TO.
WE NEED TO MOVE FORWARD QUICKLY.
UM AND, UH, WITH RESPECT TO THE
TIMELINE. UM I THINK THAT'S A
JUDICIAL REVIEW SCHEDULE. IS
THAT RIGHT? THE 270 DAYS? YEAH
IT'S YEAH, I THINK SO. YEAH. OUR
DECISIONS, UM, GO DIRECTLY TO
THE SUPREME COURT. AND SO I
THINK THAT WE'RE ON A DIFFERENT
TIMELINE TO START WITH, BUT I
CAN GET YOU THE DETAILS OF THAT
AS WELL. AND I DON'T THINK WE
COULD DO THAT OURSELVES. I THINK
WE WOULD NEED LEGISLATIVE
CHANGES TO MAKE ANY CHANGES TO
THE JUDICIAL REVIEW. THERE WAS A
MULTIPARTY AGREEMENT. UM ON THAT
. I THINK YOU I THINK THE CPUC
èC WAS A PART OF THAT
AGREEMENT. ARE YOU TALKING ABOUT
THE SGC PROCESS TO SELECT
PROJECTS THAT WOULD BE EXPEDITED
? THAT MIGHT BE OK. ALL RIGHT. I
THINK TRANSMISSION PROJECTS
COULD øINTO
UH, I THINK THEY QUALIFY. BUT
YEAH, BECAUSE I BECAUSE IT'S NOT
CLEAR IT. IT'S NOT CLEAR THAT
YOU'RE ADOPTING THAT SO I THAT'S
WHAT I'M ASKING. I THINK THAT'S
A CERTIFIED PROCESS THAT THE
PROJECTS HAVE TO BE CERTIFIED
BY, UH, THE STRATEGIC GROWTH
COUNCIL. AND SOME CLEAN ENERGY
PROJECTS HAVE GONE THROUGH THAT
PROJECT. I DON'T THINK ANY
TRANSMISSION PROJECTS HAVE YET
AND THE REASON AND I AND I HAVE
THIS. THIS IS A FOLLOW UP
COMMENT, AND THEN ONE QUESTION
TO THE, UM AUDITOR. THE UH THE
REASON I KEEP ASKING ABOUT THIS
IS THAT AND WE HEAR ABOUT THE
TIME IT TAKES TO DO THIS, AND SO
THAT TIME TRANSLATES TO MONEY,
WHICH TRANSLATES TO INCREASED
COST TO CONSUMERS, SO THERE ARE
WAYS TO IMPROVE THESE
EFFICIENCIES. UM BABA ASKED, YOU
KNOW, OK, IF WE'RE GONNA WHAT
WHAT ARE WE LOOKING? AS OUR GOAL
IS TO IMPROVE THESE EFFICIENCIES
, BECAUSE HONESTLY, IT 10 YEARS
A DOZEN YEARS DOESN'T REFLECT
THE URGENCY. I THINK WE SHOULD
BE SHOWING, UM AS WE ARE TRYING
TO GET TO A POINT WHERE WE CAN
ACTUALLY MAKE AN IMPACT, UH, IN
OUR CLIMATE GOALS, AND SO, UM,
WHICH ARE VERY IMPORTANT TO ME
AS WELL. SO I'M LOOKING FOR THE
URGENCY AND THAT'S WHAT I'M
LOOKING FOR, IN IN TIMELINES,
AND THAT'S WHY I KEEP PUSHING ON
IT. QUITE FRANKLY. SO THAT'S
JUST THAT'S MORE OF A STATEMENT.
SO THANK YOU, UM TO THE AUDITOR
REAL QUICKLY, UM, 22 LITTLE
THINGS WE'RE SEEING. OBVIOUSLY
OPERATING COST INCREASES. UM SO,
UM, THROUGHOUT THROUGHOUT AND A
LOT OF DIFFERENT FACTORS, HOW
DOES THAT COMPARE TO OTHER
STATES? WHEREAS CALIFORNIA
UNIQUE TO THESE SIGNIFICANT COST
INCREASES FOR OPERATING, UH, THE
DIRECT ANSWER TO YOUR QUESTION
IS WE PRIMARILY FOCUSED ON THE
THREE INVESTOR OWNED UTILITIES.
UH, THAT WE FOCUSED ON DURING OF
THE AUDIT. SO WE DON'T REALLY
LOOK AT OTHER STATES AS PART OF
OUR WORK, OK? AND THEN THE FINAL
FINAL PIECE OF THAT IS THAT, UM
YOU YOU YOUR CHART IS
FASCINATING ABOUT THE, UH,
REALIZED RETURNS AND RATES OF
RETURNS. UM WHEN AND OBVIOUSLY
IT'S DIFFICULT I YEAR TO YEAR TO
PREDICT. YOU KNOW, ONE YEAR, A
COMPANY MIGHT, YOU KNOW, HAVE A
HAVE A GREATER THAN THAN
AUTHORIZED RETURN, AND THEN THE
NEXT YEAR, THEY MIGHT SHOW A
LOSS. BUT WHEN YOU SEE YOU KNOW,
SOME COMPANIES ACTUALLY DOING
WELL AND THEN YOU LOOK AT THEIR
RATES AND THE RATES ARE HIGHER
THAN EVERYBODY ELSE'S AS WELL.
IS THERE NÓ OBLIGATION TO A
REBATE THAT IN IN ANY WAY TO THE
CONSUMER, IF THEY'RE IF THEY'RE
GETTING MORE THAN THEY'RE
AUTHORIZED FOR A RETURN? UM, IS
THERE NÓ OBLIGATION TO REFLECT
THAT IN THE RATES OR OR
SOMETHING TO HELP OFFSET THE
COST FOR CONSUMERS? I MEAN,
THEY'RE DOING WELL, THEY'RE
GETTING EXACT. THEY'RE GETTING
MORE THAN THEY'RE ASKING FOR.
ARE THEY JUST BANKING THAT SO
WHEN WE WERE LOOKING AT THE RATE
OF RETURN PROCESS, IT APPEARED
TO US THAT THE CONCEPT OF RATE
OF RETURN AND EARNING ON, YOU
KNOW THE WEIGHTED AVERAGE COST
OF CAPITAL DEBT AND EQUITY THAT
WAS PRIMARILY A REVENUE SETTING
EXERCISE FOR THE PURPOSE OF A GR
èC CASE. UM, IT'S A SEPARATE
BUT RELATED PROCEEDING, BUT WE
DIDN'T SEE ANY FOLLOW THROUGH ON
THE TAIL END OF THE PROCESS. OK,
WHAT DID THE ACTUALS LOOK LIKE?
AND SO WHAT WE DO IN OUR
RECOMMENDATION. BOTH CPUC AND
CAL ADVOCATES IS THEY NEED TO BE
LOOKING AT WHAT UTILITIES ARE
ACTUALLY EARNING RELATIVE TO THE
AUTHORIZED RATE OF RETURN
BECAUSE OF èC P èC IS
AUTHORIZING CERTAIN RATES AND
THEY CONSISTENTLY BEATING IT.
YEAR AFTER YEAR. IT MAY BE OK,
BUT IT I A MINIMUM DESERVES
INQUIRY ABOUT HOW ARE THEY
ACHIEVING THESE EFFICIENCIES?
AND LET'S MAKE SURE THAT WE'RE
CAPTURING THAT INFORMATION WHEN
CAL ADVOCATES IS APPLYING THE
SAME LEVEL OF SCRUTINY IN THE
FOLLOWING RAY CASE? SO YOU'RE
FINDING IS THAT THAT ISN'T
REALLY HAPPENING. CORRECT. THANK
YOU. A SIMILAR MEMBER, BERNER.
YES SO THANK YOU FOR THE GREAT
Tð UP AS I MEMBER WOULD. UM I
OBVIOUSLY REQUESTED THIS AUDIT.
AND FOR THOSE OF YOU WHO DON'T
KNOW I WAS IN THE MIDDLE OF A
DIVORCE. AND THIS IS THE ONE
THING THAT MY EX HUSBAND ASKED
ME TO DO. MOST PEOPLE ARGUE
ABOUT HOUSES AND CARS. WHATEVER
HE SAID, YOU HAVE TO DO
SOMETHING ABOUT THE UTILITY
BOSS. AND THIS IS WHAT AND ALSO,
UH, NOT JUST ME PERSONALLY.
SORRY I ALWAYS THROW UP MY FUNNY
STORIES. BUT WHEN GAS PRICES
WERE SO HIGH IN CALIFORNIA WE
GOT MORE CALLS INTO MY OFFICE
ABOUT SDG AND E UTILITY AND
WATER PRICES THAN ANY CAUSE
ABOUT GAS PRICES. THIS IS A REAL
COST OF LIVING PROBLEM FOR REAL
CALIFORNIANS. AND SO WHEN I LOOK
SPECIFICALLY AT WHAT, UH, SO
REMEMBER WHAT WAS REFERENCING
PAGE 37 AND THE RATES OF RETURN
FROM S¼ Tð GE. I WANT TO KNOW
WHAT THE SAFEGUARDS ARE FOR èC,
P èC AND CAL ADVOCATES WHO IN
MY MIND SHOULD BE ADVOCATING FOR
LOWER RATES BECAUSE YOU'RE
WATCHING THIS FROM 2006. YOU'RE
WATCHING THIS STEADY INCREASE
EVERY YEAR IN OUR RATES, AND
IT'S UNTENABLE FOR CALIFORNIANS,
NOT JUST LOW INCOME CALIFORNIANS
WHEN WE LOOK AT THE CHART THAT
WE HAVE OF THE NUMBER OF PEOPLE
IN ARREARS. WE'RE NOT TALKING
ABOUT JUST THOSE PEOPLE ANYMORE.
THOSE PEOPLE IN ARREARS FOR MANY
DIFFERENT REASONS. WE'RE TALKING
ABOUT MIDDLE CLASS AND THAT'S
UNDER INVESTING IN OUR FUTURE.
SO MY QUESTION REALLY, FOR THE
èC P èC. AND FOR THE èC
ADVOCATES OFFICE IS WHAT ARE YOU
DOING? THAT YOU'RE NOT CHECKING
WHAT I LOOK AT AND I CALCULATED
IS EVEN IF YOU LOOK AT S¼ G Dð
Dð. THAT'S I'M SAN DIEGO COUNTY.
SO THAT'S THE ONE I'M CONCERNED
ABOUT. BUT YOU LOOK AT IT THE
YEAR OVER YEAR OF ALL THE YEARS
HERE ONLY THREE YEARS DO THEY
NOT MEET THEIR RATE OF RETURN,
AND MOST YEARS IT WAS OVER 1.
THAT THEY WERE UNDER. AND SO I
DO THINK THERE'S A PERVERSE
INCENTIVE. AND AT WHAT POINT
DOES THE èC PU èC
COMMISSIONERS SIT AND WATCH YEAR
AFTER YEAR? THEM OVERESTIMATING
WHAT THEY'RE GONNA DO, SO
THEY'RE INCREASING RATES. AND AT
WHAT POINT DOES CAL ADVOCATES
NOT STEP IN AND SAY PEOPLE CAN'T
PAY THESE RATES? IF I MAY, UH
LET ME JUST START AND SAY THAT
YOU'RE RIGHT. WE SHOULD BE
LOOKING AT THIS ISSUE. THIS VERY
ISSUE AND I DO THINK THAT THE
STATE AUDITORS FRAMING OF THE
ISSUES IS CORRECT. UM BUT I ALSO
WANT TO SAY THAT AND I MENTIONED
IT IN MY PRESENTATION THAT THERE
IS A PROLIFERATION OF MECHANISMS
THAT THE UTILITY CAN USE THAT
WOULD MAKES IT VERY DIFFICULT TO
TRACK AS TO WHETHER THE UTILITY
IS STICKING TO ITS AUTHORIZED
BUDGET. UH AND, UH, I'LL SAY
THAT THOSE ARE CALLED BALANCING
ACCOUNTS. THERE'S A REGULATORY
MECHANISMS THEY ALLOW THE
UTILITY TO RECORD COSTS IN
ACCOUNTS, UM, OUTSIDE OF THE
GENERAL RATE CASE PROCESS NOW
THEY WERE NOT INTENDED TO BE
REGULAR REGULARLY USED
MECHANISMS. AND THEY ARE EVERY
SINGLE ONE OF YOU ONE OF THE
SLIDES THAT I HAVE, AND I CAN'T
REMEMBER WHAT SLIDE NUMBER IT
IS, BUT THERE'S A WATERFALL OF
RED BARS. THOSE ARE ACCOUNTS A
COMBINATION OF BALANCING
ACCOUNTS AND MEMO ACCOUNTS WITH
THE UTILITIES ARE REQUESTING.
RECOVERY ON, YOU KNOW SPECIFIC
ACTIVITIES MOSTLY RELATED TO
WILDFIRE MITIGATION, BUT THOSE
ARE OUTSIDE OF THE GENERAL RAY
CASE PROCESS, AND MOST
CORPORATIONS NEED TO PROPOSE A
BUDGET TO THEIR BOARDS AND STICK
TO IT. HAVING THESE OTHER KINDS
OF MECHANISMS, UH, ALLOWING THE
UTILITY TO REQUEST COST RECOVERY
OUTSIDE OF THE MAJOR BUDGETING
PROCESS MAKES IT VERY DIFFICULT
TO KEEP TABS ON THEM. AND THEN
FOLLOWING UP ON THAT. WHY DIDN'T
YOU AS THE COW ADVOCATES ASK
THEM FOR THE FULL BALANCING
COUNTS AND ALL OF THESE THINGS
BECAUSE THAT WOULD IN MY MIND,
AND I THINK IN A REGULAR
CALIFORNIANS MIND THAT'S YOUR
ROLE IS TO ADVOCATE FOR US TO
HAVE LOWER RATES, RIGHT? THAT'S
IN MY MIND. YOU SHOULD ALWAYS BE
SAYING NÓ DO WE REALLY NEED
THIS? NÓ DO WE REALLY NEED THIS?
NÓ LOOK AT HOW IT'S GONE UP SO
IT SHOULD HAVE TAKEN A STATE
AUDIT REQUESTED BY ME AND MY
COLLEAGUES IN JL. TO GET AT THIS
INFORMATION BECAUSE IT MUST BE
SOMETHING YOU GUYS HAVE BEEN
SEEING. SO I'D LIKE TO EMPHASIZE
THAT OUR FOCUS GIVEN OUR
RESOURCES, OUR FOCUS IS ON
UTILITY REQUEST FOR BALANCING
ACCOUNTS, MEANING WE FOCUS ON
THE ISSUES BEFOREHAND WHERE THE
UTILITY IS REQUESTING AUTHORITY
TO ESTABLISH A BALANCING COUNT.
THAT'S WHERE WE FIGHT MOST
BEFORE THEY GET TO BALANCING
ACCOUNT AND WE ALSO FOCUS ON THE
OTHER REGULATORY MECHANISM,
WHICH IS CALLED A MEMORANDUM
ACCOUNT AND A MEMORANDUM ACCOUNT
IS ANOTHER REGULATORY MECHANISM
WHERE THE UTILITIES CAN RECORD
COSTS, BUT THEY'RE NOT
GUARANTEED RECOVERY. THEY HAVE
TO COME BACK AND THERE NEEDS TO
BE A REASONABLE REVIEW. LOOKING
AT WHETHER THE PROPOSAL MAKES
SENSE. THEY THEY THEY ARE COST
EFFECTIVE, ETCETERA. SO JUST TO
BE VERY CLEAR. UM IF WE HAD THE
RESOURCES, WE WOULD LOOK AT
EVERY SINGLE BALANCING ACCOUNT.
BUT GIVEN OUR RESOURCES WE'RE
GONNA DO. WE'RE GONNA FOCUS OUR
BATTLE ON THE PROPOSALS WHERE
THERE ISN'T YET A BALANCING
ACCOUNT. AND SHOULD THERE BE?
THAT'S WHERE WE'RE WE'RE GONNA
FOCUS. OUR EFFORT ON IT IS
DETERMINING WHETHER THERE SHOULD
BE A BALANCING ACCOUNT WHETHER
THE UTILITY SHOULD GET
GUARANTEED COST RECOVERY. THANK
YOU AND FOR, UM, THE
COMMISSIONER, IF LIKE, IN
ADDITION TO ANSWERING THE OTHER
QUESTIONS, THE ONE THING THAT
ALSO IS, IS IT NOT SUCH A
GLARING THING WHEN YOU READ
REPORTS IN THE NEWSPAPER ABOUT
THE RECORD PROFITS THAT THE I Ó
U S¼ ARE MAKING AND THEN YOU SEE
THE STRUGGLE THAT CALIFORNIANS
HAVE LIKE AS A LEGISLATOR WHO IS
ACCOUNTABLE TO THE PEOPLE. I SEE
THAT AND I HOW DO I EXPLAIN THAT
TO SOMEBODY? LIKE THAT'S YOUR
JOB TO EXPLAIN IT TO SOMEBODY.
SO MAYBE YOU CAN EXPLAIN IT TO
THE PUBLIC RIGHT NOW. YEAH.
THANK YOU. ASSEMBLY MEMBER. AND
NOW YOU'RE ABSOLUTELY RIGHT. UM,
THIS IS A VERY CRITICAL ISSUE,
AND I'LL NOTE THAT A THIRD OF
THE CUSTOMERS IN I Ó U
TERRITORY ARE ON LOW INCOME
PROGRAMS. PEOPLE ARE STRUGGLING.
UM AND, UM, I APPRECIATED THE
PUC. WE APPRECIATED THE FINDINGS
OF THE AUDITOR AND WE HAVE
ACCEPTED ALL OF THEM AND ARE
IMPLEMENTING ALL OF THEM. SO WE
APPRECIATED THE AUDIT AND THE
REPORT. UM WE DO, UH, LOOK AT
SPENDING THROUGH A, UH, RISK
SPEND, UM, ACCOUNTABILITY REPORT
AND WE'RE GOING TO CONTINUE TO
DO THAT, AND WE'LL BE TAKING A
CLOSER LOOK AND COMING UP WITH
NEW MECHANISMS TO, UM MONITOR
AND ADDRESS. UM UH, ANYTHING
THAT WE SEE AS A PROBLEM THE, UH
THE WHAT THE AUDITORS' REPORT
SHOWS. IS THAT THE FORECASTS UM,
THAT THESE ARE GRC FORECASTS AND
IF THE UTILITIES ARE UNDER THE
FORECAST, AND THAT'S WHERE THEY
SHOW, UM THAT THAT THAT THERE'S
AN OVERAGE AND SO WE WILL BE
TAKING A LOOK AT THAT ON THE
BALANCING ACCOUNT ISSUE. UM
DON'T DISAGREE AT ALL WITH THE
PUBLIC ADVOCATES COMMENTS, I'LL
NOTE THAT, UM WE'RE INCREASINGLY
BEING DIRECTED TO USE UM,
MEMORANDUM ACCOUNTS OR BALANCING
ACCOUNTS BY THE LEGISLATURE, AND
MOST RECENTLY, UM, RECEIVED
DIRECTION BECAUSE OF, UH
INCREASED NEED FOR ENG
ORGANIZATION. SO DISTRIBUTION
SYSTEM ENERGIZING. WHY AREN'T
THE UTILITIES SHOWING UP TO
ENERGIZE A NEW CUSTOMERS? IT'S A
VERY BIG PROBLEM WAS NOT A IS
NOT INCORPORATED INTO GR èC S¼.
AND SO, UM BEEN INSTRUCTED TO
ALLOW THE UTILITIES IF THEY
APPLY TO SET UP SOME KIND OF
COST RECOVERY MECHANISM, AND WE
HAVE A PENDING APPLICATION NOW
TO DO THAT. SO THOSE KIND OF
ACCOUNTS UM I AGREE THEY'RE NOT
GOOD FOR RATEPAYERS OF RATES ARE
ELECTRICITY. UM THE COLLECTION
OF SOCIALIZATION OF COSTS
THROUGH ELECTRICITY RATES IS
REGRESSIVE COMPARED TO TAXES. UM
BUT THIS IS THE SYSTEM THAT WE
HAVE AND LOOKING AT THE BASIC
UTILITY SERVICES SUCH ENERGI
ORGANIZATION OF CUSTOMERS. WE'RE
SEEING INCREASING COSTS. UM THE
GOOD THING ABOUT, UM, BALANCING
COUNTS AND, UH, MEMORANDUM
ACCOUNTS IS YOU DON'T HAVE TO
WORRY ABOUT GETTING A FORECAST,
RIGHT? YOU PAY ONLY WHAT IS
SPENT. UM BUT THAT'S NOT IDEAL
WHEN IT'S ON TOP OF EVERYTHING
THAT HAS BEEN FORECAST, SO THERE
ARE DIFFERENT MECHANISMS TO DO
DIFFERENT THINGS. ASSEMBLY
MEMBER HEARTENED THANK YOU,
MADAM CHAIR. UM UH, IT'S VERY
CLEAR FROM THE TESTIMONY AND
FROM EVERYTHING THAT WE'RE
HEARING FROM OUR CONSTITUENTS
THAT THEY'RE ANGRY AND CONFUSED
AND STRUGGLING TO PAY THESE
UTILITY BILLS, AND THEY'RE
REALLY CONFUSED BECAUSE THEY
DON'T HAVE THE INFORMATION THAT
THEY NEED ABOUT WHAT'S HAPPENING
AND WHAT THESE WHAT THESE TRENDS
ARE GOING AND HOW TO HOW TO GET
A HANDLE ON THAT. AND I THINK
STATE AUDITORS REPORT REALLY
CALLS THIS OUT CLEARLY IN SAYING
THAT THAT'S A RESPONSIBILITY OF
THE PUBLIC ADVOCATES AND THE èC
PU èC TO HELP UTILITY CUSTOMERS
UNDERSTAND WHAT'S GOING ON. SO
THAT THEY CAN MAKE BETTER
DECISIONS FOR THEMSELVES. AND
YOUR RESPONSE TO THE AUDIT KIND
OF SAYS THAT'S NOT OUR JOB, AND
I TAKE ISSUE WITH THAT AND
REALLY THINK THAT THAT IS A
FUNDAMENTAL RESPONSIBILITY
BECAUSE YOU ARE THE ONLY
CONSUMER WATCHDOGS IN THE SYSTEM
AND PROVIDING THE INFORMATION
THAT CONSUMERS NEED TO
UNDERSTAND. TO BE ABLE TO DEAL
WITH THIS AT THE FAMILY LEVEL IS
REALLY FUNDAMENTAL TO YOUR JOB,
SO I'D REALLY LIKE TO HEAR MORE
ABOUT WHY IT IS THAT YOU THINK
THAT THAT IT'S NOT YOUR PRIMARY
RESPONSIBILITY AND WHAT YOU CAN
DO TO BETTER ADDRESS THAT ISSUE.
UM CERTAINLY. AND UM, I DON'T
THINK THAT WE MEANT TO
COMMUNICATE THAT THAT IT WASN'T
OUR OUR JOB TO INFORM, UM, THE
PUBLIC. UM IT MAY BE THAT WE SAW
THE UTILITIES AS BETTER. UH UM
UH, THE UTILITIES NEED TO
COMMUNICATE WITH OUR CUSTOMERS,
AND WE SEE PART OF THE
OBLIGATION BEING ON THE
UTILITIES. YOU HAVE THESE
CUSTOMERS THAT YOU SERVE. YOU
NEED TO BE COMMUNICATING THAT
WITH THEM AND BE HONEST WITH
THEM ABOUT WHAT'S HAPPENING WITH
RATES AND SO PART OF OUR PLAN TO
IMPLEMENT THE AUDITORS. FINDINGS
ON COMMUNICATIONS IS TO PROVIDE,
UM REQUIREMENTS FOR THE
UTILITIES TO COMMUNICATE, UH,
RATE INCREASES WHEN THEY'RE
HAPPENING, WHY THEY'RE HAPPENING
. WHAT THE COMPONENTS OF THEIR
THOSE RATE INCREASES ARE WE ALSO
, UM PUBLISH, UH, ANNUAL REPORTS
ON RATES. UM AND SO, UH, WE MAKE
AN EFFORT OF KIND OF, YOU KNOW,
COMPILING EVERYTHING AND PUTTING
IT TOGETHER FOR THE PUBLIC TO
SEE, UM AND, UH, TRYING TO BE AS
CLEAR AS POSSIBLE. I KNOW THE PG
AND E RAPE CASE IS 1000 PAGES
LONG. YOU KNOW, THESE ARE THINGS
THAT ARE NOT EASILY DIGESTIBLE
TO THE PUBLIC AND WE CAN'T
EXPECT PEOPLE TO COME TO OUR
WEBSITE AND PULL UP THE REPORT
AND GO THROUGH ALL OF IT. AND SO
WE WE'VE DONE MORE AND MORE.
WE'VE TO CREATE FACT SHEETS, SO
12 PAGES ON WHAT'S HAPPENING
HERE AND POST THAT ON OUR
WEBSITE. WE ALSO HAVE A, UM, A
PUBLIC. UM UH, BRANCH. UH,
COMMUNICATIONS BRANCH THAT TAKES
, UM ALL CUSTOMER INQUIRIES. AND
SO IF ANYONE IS HAVING A PROBLEM
REACHING THE UTILITY, THEY CAN
COME TO US. WE HAVE BUTTONS ON
OUR WEBSITE, AND WE HAVE FOLKS
WHO ARE AVAILABLE TO ANSWER
QUESTIONS AND PROVIDE
INFORMATION TO THE PUBLIC. SO WE
ARE TRYING. IT'S NOT SOMETHING
HISTORICALLY, THAT THINK THE
COMMISSION HAS, UM, BEEN THAT
GOOD AT OR, YOU KNOW, REALLY HAD
A MAYBE DIDN'T NEED TO AS MUCH
AS NOW. BUT I THINK NOW MORE
THAN EVER, WE NEED TO TALK TO
THE PUBLIC ABOUT WHAT WE'RE
DOING. SO I DEFINITELY TAKE THAT
TO HEART. AND UM, WE'LL, UH,
MAKE AN EFFORT TO CONTINUE TO
IMPROVE THE WAY WE COMMUNICATE.
UH, I WOULD ALSO LIKE TO ADD
THAT THE PUBLIC ETHICS OFFICE
HAS EXPANDED ITS WEBSITE TO
PROVIDE MORE TRANSPARENCY IN
TERMS OF THE POSITIONS WE'RE
TAKING. WHY WE'RE TAKING THEM.
UM HOW MUCH WE'RE ARGUING FOR IN
TERMS OF RATEPAYERS. SAVINGS UH,
WE HAVE BLOGS THAT ARE STAFF ARE
, UM, BLOGS THAT OUR STAFF ARE
ARE WRITING, UH, TO PRESENT THE
IDEAS THAT WE ARE, UH, PROPOSING
BEFORE THE COMMISSION AND IN
OTHER FORUMS, UM, I ALSO WANT
TO, UM, EMPHASIZE THAT WE ARE
AH! MOSTLY COMPLETE IN TERMS OF
ACHIEVING OUR OUR OUR OBJECTIVE
IN, UH, IMPLEMENTING THE
RECOMMENDATIONS FROM THE STATE
AUDITOR. SO WE APPRECIATE THOSE
RECOMMENDATIONS, AND, UH, WE'RE
CLOSE TO COMPLETION. THANK YOU.
I APPRECIATE YOU, UM, ANSWERING
THE QUESTIONS, AND I JUST THINK
THIS IS SOMETHING THAT'S ONLY
GOING TO BECOME MORE CRITICAL AS
TIME GOES ON IS THAT THESE
ISSUES ARE ARE NOT GOING AWAY.
AS WE HEARD THERE. THE TREND
LINES ARE VERY DIFFICULT AND
THIS IS VERY COMPLICATED, AND
IT'S GONNA REQUIRE CONSISTENT
COMMUNICATIONS TO HELP PEOPLE
UNDERSTAND EXACTLY WHAT WE'RE
FACING. VICE CHAIR, PATTERSON.
UH, THANK YOU, MADAM CHAIR AND I
APPRECIATE UH, BEING HERE AND
BEING A AAA PART OF THIS, UM YOU
ARE ALL TALKING ABOUT SOMETHING
THAT IS VERY, VERY COMPLEX.
DIFFICULT TO UNDERSTAND
DIFFICULT TO FIGURE OUT. YOU'RE
TELLING US WHERE THE INCREASES
ARE ARE ARE HAPPENING THERE.
IT'S ALMOST AS IF THEY'RE ON
AUTOPILOT. THEY'RE GONNA HAPPEN.
NÓ MATTER WHAT UM AND THEN WE'RE
TALKING ABOUT, UH, COMMUNICATING
WITH THE GENERAL PUBLIC. YOU
KNOW, YOU'RE COMMUNICATING WITH
THE GENERAL PUBLIC ALREADY. YOU
KNOW WHERE THAT IS? IN THEIR
BILLS. IN THEIR BILLS. AND THE
NOISE IS SO LOUD. WITH RESPECT
TO THE UNAFFORDABILITY, AND YOU
LOOKED AT ALL OF THESE ARREARS.
CASES WHAT DO YOU THINK THE
GENERAL POPULATION THINKS ABOUT
WHAT IS GOING ON HERE? THEY JUST
FEEL LIKE OVER AND OVER AGAIN.
THEY'RE GETTING STUCK. AND WE'RE
CREATING. I THINK AN EXPECTATION
AND AS THE CHAIR MENTIONED ALL
OF THESE, UH, GOALS THAT THE
STATE HAS SET UP ARE GOING TO BE
VERY EXPENSIVE. AND SOMEBODY'S
GONNA HAVE TO PAY. THERE'S BEEN
SUGGESTIONS THAT YOU'RE GOING TO
DO A VARIETY OF DIFFERENT KINDS
OF FINANCING. THE FACT OF THE
MATTER IS THIS IS GOING TO BE
VERY EXPENSIVE. ALL RIGHT, AND
WHETHER YOU GET IT FROM THE FEDS
, WHETHER YOU GET IT FROM SOME
OTHER KIND OF, UH, CAPITAL
INSTRUMENT, WHETHER YOU FIGURE
OUT HOW TO GO TAKE A G GRF FUNDS
AND PARCEL AROUND THE FACT IS,
THE COST DRIVERS OF THIS ARE
JUST GOING TO GO ON AND ON AND
ON. AND SO I THINK THAT THE YOU
KNOW THE FOR ME. THIS IS ABOUT
THE CONSTITUENTS THAT I
REPRESENT IN IN CENTRAL
CALIFORNIA IN A IN A PG AND E
AREA. UH I. I KNOW THAT OTHER
MEMBERS HAVE SAID THEY RECEIVE A
WHOLE LOT OF INFO FROM THEIR
CONSTITUENTS. YOU OUGHT TO SEE
MY INBOX. OK SO WHAT? I'M WHAT
I'M TRYING TO SAY IS, UM THE
UNTIL THE PEOPLE SEE SERIOUS
RELIEF UNTIL THE ESSENTIALLY THE
RATE GOUGING STOPS, OR AT LEAST
FLATTENS, IF NOT COMES DOWN. ANY
COMMUNICATION IS GOING TO BE
BUREAUCRATIC NONSENSE, BLAH,
BLAH, BLAH, BLAH, BLAH BECAUSE
THEY'RE RECEIVING A BILL THAT
SAYS PG AND E OR S¼, Dð, G AND E
IS GONNA IS GONNA HAVE TO.
YOU'RE GONNA HAVE TO, YOU KNOW,
PONY UP. AND SO WHEN I HEAR
ALTERNATIVE WAYS OF FINANCING,
AND YOU KNOW ALL OF THAT THE
BOTTOM LINE IS SOMEBODY'S GONNA
PAY. IF YOU OFFLOAD THE COST OF
THE ASPIRATION WITH RESPECT TO
THE STATE'S PLANS, UH TO THE
GENERAL FUND, OR TO OTHER FUNDS
OVER, YOU KNOW HERE THAT ARE
BEING USED FOR OTHER THINGS. THE
FACT REMAINS THAT SOMEBODY'S
GONNA PAY BECAUSE IF WE'RE GONNA
LIGHTEN OR CHANGE THE FINANCE
MECHANISMS THAT ARE BEING
DISCUSSED HERE. UM AND SOME OF
THAT IS GOING TO END UP BEING
MAYBE THE STATE OF CALIFORNIA.
UM THEN WE'RE GONNA HAVE TO SAY
NÓ TO OTHER THINGS FOR PEOPLE IN
THE STATE OF CALIFORNIA. UH SO
IT MY BIG CONCERN IS THAT THAT
THAT THAT I THINK THE ASPIRATION
IS WAY OUT OVER OUR SKIS? AND I
THINK THAT THE ASPIRATION IS SO
EXPENSIVE AND SO LONG IN COMING
THAT WE'RE GONNA SEE THESE RATE
INCREASES FOR AS FAR OUT AS THE
EYE CAN SEE AND TO SUGGEST THAT
THERE ARE REAL SUBSTANTIAL AND
SIGNIFICANT MECHANISMS TO REDUCE
THE COST. WHEN YOU SEE ALL THE
COST DRIVERS ARE PART OF THE I
Ó U S¼, PUTTING TOGETHER
ELECTRICITY AND SENDING IT OUT.
AND SO I, YOU KNOW, I APPRECIATE
THE FACT THAT WE'RE SITTING
HERE, UH, COMMISERATING ABOUT
THIS. UH, BUT I I'M NOT SURE
THAT I SEE AN END TO THIS. UM,
I'VE BEEN HERE 11 YEARS. THIS IS
MY 12TH YEAR NOW. VICE CHAIR OF
U AND E THAT WHOLE ENTIRE TIME.
AND I HAVE SEEN THE GRID. BECOME
LESS AND LESS RELIABLE. MORE AND
MORE EXPENSIVE. AND RATES THAT
NOBODY WOULD HAVE ENVISIONED 10
YEARS AGO. AND BILLS THAT ARE
REALLY IN MY JUDGMENT,
EXCESSIVE. AND SO IF WE'RE NOT
GOING TO TRY TO CHANGE THE
DIRECTION CHANGED SOME OF THE UH
, REQUIREMENTS THAT LEGISLATION
HAVE PUT FORWARD AH, WE'RE GONNA
TRY TO DECARBONIZE, THE FIFTH
LARGEST ECONOMY IN THE PLANET.
AND WHILE WE'RE DOING THAT,
WE'RE PUTTING MILLIONS OF
CALIFORNIANS INTO POVERTY. AND I
JUST NOT. I'M JUST NOT HEARING
SOLUTIONS HERE THAT MAKE A LOT
OF SENSE BECAUSE THE BOTTOM LINE
IS STATE OF CALIFORNIA WANTS TO
BUY A WHOLE LOT OF STUFF AND DO
A WHOLE LOT OF ASPIRATIONAL
THINGS. THEY'RE GONNA HAVE TO
FIGURE OUT HOW YOU PAY FOR IT.
IF YOU BOND IT, YOU GOTTA YOU
GOTTA PAY THE INTEREST. IF YOU
BORROW IT, YOU GOTTA PAY THE
INTEREST. IF THE RATEPAYERS HAVE
TO PICK UP, IT'S GONNA SHOW UP
ON THEIR ON THEIR BILLS. SO YOU
TALK ABOUT ALTERNATIVE
INSTRUMENTS OF FINANCE. FINANCE
INSTRUMENTS. COME WITH INTEREST.
AND COME WITH PAYBACK. AND
SOMEBODY'S GONNA HAVE TO PAY FOR
THAT. AND VICE CHAIR. PATTERSON
I APOLOGIZE FOR INTERRUPTING,
BUT WE ONLY HAVE, UH, THE PUC
PRESIDENT HERE FOR FIVE MORE
MINUTES. SO DID YOU WANT HER TO
RESPOND? TO THAT. WELL, I MEAN,
ISN'T ANYBODY ELSE ON THIS PANEL
, FRUSTRATED THAT WE'RE HEARING
ALL OF THE BEER BUREAUCRATIC
LANGUAGE WE'RE HEARING ABOUT IN
AUDIT AND ALL OF THAT. AND
EVERYTHING JUST SEEMS TO BE ON
AUTOPILOT. AND THE I THINK
THAT'S I HONESTLY THINK THAT
THAT'S THAT'S WHY WE'RE HERE IS
TO TRY TO STOP THAT AUTOPILOT
AND DO EVERYTHING IN OUR POWER
TO RESPOND TO THE CONCERNS OF
YOUR CONSTITUENTS. THE CONCERNS
OF AS IN MY MEMBER BERNERS
CONSTITUENTS THE CONCERNS OF ALL
OF OUR CONSTITUENTS, UM WHO ARE
ARE FEELING AN INCREDIBLE BURDEN
EVERY TIME THEY OPEN THEIR
BILLS, SO THAT'S THAT'S WHY
WE'RE HERE AND LOOK FORWARD TO
PARTNERING WITH YOU SO THAT WE
CAN ACTUALLY FIND REAL
SOLUTIONS. BEN THIS COST CURVE
AND KEEP TRYING TO FIND ANSWERS
TO HOW YOU'RE GONNA FINANCE ALL
THIS TO THE BOTTOM LINE IS ALL
THIS IS GONNA HAVE TO BE PAID
FOR SOMEBODY, EITHER THE STATE
IS GOING TO HAVE TO PAY FOR IT.
YOU'RE GONNA HAVE TO BORROW THE
MONEY. YOU'RE GONNA HAVE TO BOND
THE MONEY. YOU CAN'T DO THIS FOR
NOTHING. AND IF YOU PUT A BIG
PRICE TAG ON SOME BIG ASPIRATION
ABOUT ELECTRIFICATION AND YOU
PUT MILLIONS OF CALIFORNIANS
INTO POVERTY. I'M SORRY. I JUST
THINK THE ASPIRATION IS
MISGUIDED. AND UNTIL WE READJUST
THE ASPIRATION, WE'RE NOT GOING
TO BE ABLE TO READJUST THE PRICE
TAG AND THE BURDEN THAT WE'RE
ASKING OUR RATEPAYERS TO PAY.
THANK YOU, UM, ASSEMBLY MEMBER
CALLED TO RUN. YES. THANK YOU,
UM WELL, I APPRECIATE YOU BEING
HERE AND SINCE WE WERE TALKING
ABOUT BALANCING ACCOUNTS. I HAVE
A QUESTION FOR THE PUBLIC
ADVOCATES. UM AS OF DECEMBER,
2021. THE MAJOR UTILITIES WERE
COLLECTIVELY TRACKING ROUGHLY
ABOUT $11 BILLION IN UNCOLLECTED
COST IN THEIR BALANCING
ACCOUNTS. AND SO WE KNOW THAT
THIS COULD RESULT IN HIGHER, UH,
RATES FOR OUR CONSTITUENTS. BUT
BY THE END OF 2022 PUBLIC
ADVOCATES HAD, I THINK REVIEWED,
MAYBE 18. UM OF THE TOTAL
BALANCES. AND SO I KNOW YOU
MENTIONED THAT THERE'S A
RESOURCE ISSUE. BUT WHAT PROCESS
ARE YOU ENGAGING IN TO IMPROVE
THE REVIEW OF THESE ACCOUNTS?
AND YEAH, IF YOU COULD JUST
SPEAK TO THAT, AND I AM SO SORRY
TO INTERRUPT, BUT, UM, CAN WE
PAUSE ON THAT QUESTION AND JUST
SEE IF ANYONE ELSE HAS A
QUESTION? UH, FOR PRESIDENT
REYNOLDS OR THE AUDITOR BEFORE
THEY'VE GOT TO LEAVE, UM,
ASSEMBLY MEMBER WAS NEXT IN OUR
QUEUE. IS THAT A QUESTION FOR
OK, WE'LL COME. WE'RE GONNA COME
BACK TO THAT ONE AND THEN
ASSEMBLY MEMBER TING. AND CHIAO.
OK PERFECT. AN ASSEMBLY MEMBER,
REYES, AND THERE WE GO. I FEEL
LIKE AN AUCTIONEER. THANK YOU,
MADAM CHAIR. UM I JUST WANT TO
JUMP OFF ON MY COLLEAGUE FROM
FRESNO'S, UH, POINTS. I MEAN,
222 THINGS RIGHT? I'M I'M JUST
LOOKING AT. UM MADAM PRESIDENT,
YOU'RE THE CHART REGARDING THE
UTILITY OPERATING COSTS REVENUE
REQUIREMENTS JUST ACCORDING TO
JUST LOOKING AT YOUR OWN CHART
HERE BETWEEN 2016 2021 AND I
COULD BE MISREADING IT, BUT IT
LOOKED LIKE THE REVENUE
REQUIREMENTS ARE RE RELATIVELY
FLAT, BUT YET AT THE SAME TIME
DURING THAT TIME, 2016 2021,
ACCORDING TO THE PUBLIC ADVOCATE
CHART, THE RATES ARE GOING UP
SIGNIFICANTLY. UM SO I JUST
WANNA UNDERSTAND YOU KNOW IF THE
REVENUE REQUIREMENTS ARE
RELATIVELY FLAT, WHY THE RATES
ARE GOING UP? THE OTHER PIECE OF
IT IS, YOU KNOW, WE APPRECIATE
YOU BEING HERE TALKING ABOUT
WHAT THE ISSUES ARE CAN CAN YOU
SHARE WITH US? SORT OF UM WHAT
YOU WOULD ADVISE US DO YOU? DO
YOU NEED GREATER AUTHORITY FROM
US. WHAT DO YOU NEED TO, UH,
TAKE A GREATER ROLE TO HELP
REDUCE THIS COST? BECAUSE THE
CHALLENGE FOR US IS, YOU KNOW
YOU YOU'RE SET UP LIKE A QUASI
JUDICIAL OPERATIONS. YOU TAKE
ALL BOTH SIDES ALL SIDES TRYING
TO GET INFORMATION AND YOU'RE
TRYING TO COPE WITH THE PRODUCT
RIGHT NOW. WE DON'T YOU KNOW, AS
MY COLLEAGUES AND PROFESSOR,
IT'S VERY, VERY COMPLEX, VERY
COMPLICATED. A LOT OF A LOT OF
INFORMATION, SO WE OBVIOUSLY ARE
NOT EQUIPPED TO HANDLE THAT,
RIGHT? WHAT WE DO NEED TO KNOW
IS YOU KNOW WHAT? WHAT ARE YOU
SUGGESTING THAT NEEDS TO BE DONE
TO SORT OF LOWER THIS? WE GOT A
CLEAR IDEA OF WHAT THE PROBLEMS
ARE. BUT IT WASN'T VERY CLEAR
FROM FROM YOUR VANTAGE POINT.
WHAT THE SOLUTIONS SHOULD BE OK,
SURE. AND THE FIRST QUESTION IS
ON THE CHART THAT MAYBE IT'S THE
WAY THAT IT THE, UM, ESCALATION
ISN'T VERY CLEAR FROM THE CHART.
I THINK, PARTLY IN 2024. THERE
WAS A BIG INCREASE, ESPECIALLY
FOR PG AND E, WHICH ISN'T
REFLECTED ON THE CHART. UM AND
I'LL ASK THE PUBLIC ADVOCATE. I
THINK OUR CHURCH ARE CONSISTENT,
SO IT MIGHT JUST BE THE
PERSPECTIVE OF THE CHART. UM WE
CAN GIVE YOU THE ACTUAL NUMBERS,
TOO, BUT I ALSO I THINK THAT
2024 INCREASE FROM THE GENERAL
RATE CASE. NOT IN THERE, AND THE
MEMORANDUM ACCOUNTS FOR WELFARE
HARDENING ARE STARTING TO HIT
RATES. NOW THAT I DON'T THINK
ARE REFLECTED IN THE CHART, AT
LEAST NOT NÓ. I UNDERSTAND. I
UNDERSTAND WHY WHY BETWEEN 16 TO
21 WHEN THINGS LOOK FAIRLY FLAT.
BETWEEN THOSE YEARS WHY THE
RATES ARE GOING UP, RIGHT? SO
CAUSE THERE WAS A REVENUE
REQUIREMENTS ARE IS IT BECAUSE
THEY'RE THE RATES ARE GOING UP
BECAUSE IT'S FOR FUTURE REVENUE
REQUIREMENTS. IT, THEY SHOULD
REFLECT THE INCREASE IN RATES
THOSE SO THE REVENUE REQUIREMENT
SHOULD REFLECT INCREASE IN RATES
. RATES HAVE BEEN RAISED,
RISING, UM THEY THEY STARTED TO
RISE MORE QUICKLY NOW,
ESPECIALLY IN 2024. THEY HAVE
BEEN RISING. JUST LOOKING FROM
YOUR OWN CHART. IT LOOKS LIKE
IT. THERE'S A SLIGHT INCREASE
FROM 16 TO 18. THEN THEY COME
DOWN IN 19. THEY GO UP A LITTLE
BIT, BUT THEY'RE PRETTY FLAT,
AND THAT'S NOT REFLECTIVE OF
THE, UM YEAH. SO THE
REQUIREMENTS FLAT. I'M NOT SURE
WHY THE RATES ARE GOING UP. YOU
CAN ANSWER THAT. LIKE, WHY DON'T
WE HOLD OFF WHAT WE HOLD OFF AND
THAT THE PRESIDENT ANSWER SO
THAT SHE CAN, YOU KNOW, ANSWER
THE OTHER QUESTIONS, AND WE CAN
COME BACK TO THAT FROM THE
ADVOCATES SIDE. OK, AND THEN YOU
ASK, ALSO FOR IT KIND OF IDEAS.
IN A SENSE, I THINK, UM, YOU
KNOW, ONE THING TO THINK ABOUT
IS JUST THE PROCESS TO MAKE SURE
THAT AS WE'RE PROCURING NEW
RESOURCES, AND CALIFORNIA IS
LOOKING AT CLEAN RESOURCES TO
MEET INCREASING LOAD THAT WE ALL
SUPPORT EFFORTS TO DO IT IN THE
MOST COST EFFECTIVE WAY POSSIBLE
, AND WE HAVE, UM, IN PARTICULAR
THE COMMUNITY CHOICE.
AGGREGATORS ARE DOING A LOT OF
PROCUREMENT, AND THEY OF THE
COMPETITIVE SOLICITATIONS OUT
FOR BATTERY STORAGE PROJECTS,
HYBRID PROJECTS, SOLAR AND
STORAGE AND WIND AND WE HAVE RE
OFFSHORE WIND RESOURCES. SO WE
TRY TO PUT IN PLACE PROCESSES
THAT ENCOURAGE COMPETITION AND
COST EFFECTIVENESS IN THE CHOICE
OF THE PORTFOLIO THAT WE NEED
FOR RELIABILITY AND TO MEET OUR
INCREASING LOAD, SO I THINK YOU
KNOW, SUPPORT FOR THAT PROCESS
THAT REALLY HELPS TO CONTROL
COSTS. KNOWING THAT WE DO NEED
MORE RESOURCES IN THE FUTURE. UM
AND THESE THE SOLAR PROJECTS
PROJECTS. UM THEY ARE COST
COMPETITIVE. THEY COME DOWN IN
PRICE. WE STILL HAVE LONG TERM
CON CONTRACTS THAT CALIFORNIA
HAS ENTERED INTO THAT HELPED TO
DRIVE TO BUILD THE MARKET AND
DRIVE PRICES DOWN. SO
CALIFORNIANS ARE PAYING FOR THAT
. BUT THE FUTURE IS BETTER. THE
FUTURE CONTRACTS ARE CHEAPER AND
THEY WILL HELP BRING COSTS DOWN.
THE OTHER POINT IS RESPONDING TO
THE IMPACTS OF CLIMATE CHANGE IS
EXPENSIVE, AND PART OF THAT IS
GOING TO BE FELT BY THE
UTILITIES BECAUSE IT INVOLVES
THEIR WORK. AND SO ANYTHING THAT
WE CAN DO. TO MITIGATE CLIMATE
CHANGE WHILE ALSO HAVING TO
RESPOND TO THAT. I, IT HELPS
WITH, UM WITH PREVENTION OF
FURTHER CAUSE. SO I APPRECIATE
IT. S¼ L, A MEMBER, CHAPA. UM SO
I. I WAS JUST CURIOUS. IF UM
PRESIDENT REYNOLDS, YOU COULD
RESPOND TO PROFESSOR JURA'S
SUGGESTIONS AND THE SUGGESTIONS
FROM OTHERS HERE TODAY AROUND
WAYS TO REDUCE COSTS. WHETHER
IT'S YOU KNOW, THE FIVE POINTS
MORE AND BETTER WILDFIRE
MITIGATION ADDRESSING THE POWER
STORAGE FOR THEM CUSTOMERS, UM
AND YOU KNOW THE BALANCING
ACCOUNTS AND REALLY KIND OF
TRYING TO DIAL DOWN ON THOSE BUT
WHAT ARE LIKE WHAT ARE YOUR
REACTIONS TO SOME OF THE IDEAS
THAT HAVE BEEN BROUGHT FORWARD
TODAY? AND WHAT DO YOU THINK
COULD MAKE SENSE TO REALLY MAKE
AN IMPACT OF BRINGING, UM YOU
KNOW, BRINGING IN THE COST DOWN
THE CLIMATE CREDIT, YOU KNOW,
THE BE KIND OF SHIFTED TO LOWER
INCOME FOLKS. THOSE IDEAS THAT
WERE BROUGHT FORWARD TODAY. I
JUST WOULD LOVE TO HEAR YOUR
THOUGHTS. I AM SUPPORTIVE OF THE
IDEAS, I. I THINK THEY'RE ALL
GOOD ONES. I THINK YOU KNOW JUST
TO TALK ABOUT THE CLIMATE CREDIT
AND SHIFTING IT TO LOW INCOME
CUSTOMERS AND I. I DON'T THINK
THAT WE I'M NOT SURE IF THAT'S
IN STATUTE THAT ALLOCATION OR IF
WE COULD CHANGE IT. UM, BUT, UM
THE CONCEPT. ORIGINALLY AS I
UNDERSTAND IT, IT WAS TO THAT
THAT CLI CLIMATE CREDIT WOULD BE
USED BY CUSTOMERS FOR ENERGY
EFFICIENCY AND OTHER MECHANISMS
TO REDUCE LOAD AND SO USE. USE
THIS CLIMATE CREDIT TO PAY FOR
OTHER THINGS. I THINK MOST
PEOPLE ARE USING IT JUST THEY'RE
HAPPY. THEIR BILL ISN'T AS HIGH
AND THEY YOU KNOW, ALREADY
STRUGGLING, BUT THAT WAS THE
CONCEPT OF EVERYBODY SHOULD HAVE
FUNDING TO REDUCE, UH, LOAD AND
DO THINGS THAT HELP THE SYSTEM.
UM AND SO WE DO AS I MENTIONED
IN MY OPENING STATEMENT. WE ARE
TRYING TO TARGET SUBSIDIES TO
LOWER INCOME CUSTOMERS. UM MAKES
IT YOU KNOW, WE STILL HAVE TO
KEEP IN MIND MIDDLE INCOME
CALIFORNIANS AND THE COST OF
LIVING INCREASING OVERALL, BUT I
THINK IN GENERAL, THAT'S A GOOD
PLACE TO FOCUS. THOSE CUSTOMERS
WHO NEED IT MOST. UM THE IDEA
ABOUT STORAGE FOR EXISTING
CUSTOMERS. UM THE I PROFESSOR
WAR IS RIGHT. THE LEGACY COSTS
OF M CUSTOMERS IS LARGE. UM I
HAD 6 BILLION PER YEAR AND IT
APPARENTLY IT'S HIGHER NOW AT
6.5 BILLION PER YEAR PER YEAR,
UM, AND UM AND SO IT WOULD BE
INTERESTING TO TAKE A LOOK AT
STORAGE. THE LEGISLATURE DID
APPROVE FUNDING FOR STORAGE AT
EXISTING, UM, FOR EXISTING SOLAR
CUSTOMERS TARGETED TOWARDS LOW
INCOME CUSTOMERS. AND THAT'S THE
630 MILLION. UM THAT WAS
RECENTLY APPROVED AND WE JUST
ISSUED A DECISION AND OUR, UM,
SELF GENERATION. IN A PROGRAM,
UH, PRECEDING THE SJP PROCEEDING
TO ALLOCATE THOSE FUNDS THE
FIRST TRANCHE AND THAT INCLUDES
PUBLICLY OWNED UTILITIES AS WELL
. SO UM, UH, THAT THE FUNDING
WILL BE FOCUSED ON STORAGE OR
SOLAR PLUS STORAGE FOR LOW
INCOME CUSTOMERS. UM AND THEN
WITH RESPECT TO BATTERY USE, AND
, UM AND THINKING ABOUT HOW TO
USE A, UM TO USE BATTERIES WHEN
WE NEED THEM THE MOST FOR THOSE
HEAT EVENTS WE HAVE. THAT'S
SOMETHING THAT WE'RE LOOKING AT,
TOO, INCLUDING EMERGENCY
PROGRAMS THAT HELP WITH, UH LOAD
SHIFTING AND ANY TYPE OF
GENERATION THAT'S AVAILABLE FOR
EMERGENCIES, SO DEFINITELY A LOT
OF WORK TO DO THERE AND
EXPLORATION. WE'D NEED TO LOOK
AT COSTS AND YOU KNOW AND HOW
THOSE THE COST OF THE BENEFIT
AND THEN THE COSTS THAT ARE PAID
BY RATEPAYERS IN DESIGNING ANY
PROGRAM. LIKE THAT. AND I KNOW,
UM YOU KNOW, THE COSTS AROUND
WILDFIRE MITIGATION HAVE BEEN
LARGE UNDERGROUND IN IS VERY
EXPENSIVE. AND SO, UM, ON THE
IDEA OF KIND OF BEING STRATEGIC,
IT SOUNDS LIKE YOU'RE DOING SOME
OF THAT. ANALYSIS NOW ABOUT
MAKING SURE THAT IT'S STRATEGIC
IN TERMS OF WHERE THE WILDFIRE
MITIGATION IS HAPPENING, AND
WAYS TO BRING DOWN THE COST OF
THAT. WE ARE, UM AND IT'S UM
IT'S A WORK IN PROGRESS. UM IN
THE UTILITIES ARE ALL UM, UH,
BEING, UH, YOU KNOW, IF THEY
THEMSELVES WITH OUR OVERSIGHT,
AND ALSO WITH, UM, WELFARE
SAFETY, UH, THE OFFICE OF
WELFARE SAFETY Ó E. I S¼
THEY'RE OVERSEEING, UM, AN
EFFORT TO GET THE UTILITIES TO
BE MORE TARGETED IN RISK
REDUCTION ACTIVITIES. SO ARE YOU
GOING TO THE MOST RISKY PLACES
ARE YOU USING THE MOST EFFECTIVE
MEASURES WE HAVE STAFF? THAT
ALSO, UM DOES THAT KIND OF
EVALUATION. WE DID IT AS PART OF
OUR GR èC CASE. UM WE RECEIVED
A TESTIMONY FROM MANY PARTIES
ABOUT IDEAS ABOUT THE BEST
MITIGATION MEASURES AND TOOK
THAT INTO ACCOUNT THROUGH THE
WELFARE MITIGATION PLAN PROCESS
THAT'S MEANT TO CONTINUALLY
APPROVE IMPROVE THE RISK
REDUCTION THAT ALL THE UTILITIES
DO. AND JUST LAST QUESTION. UM
AND I, YOU KNOW, I. I SHARE MY
COLLEAGUE'S CONCERNS. WE ALL GOT
THE SAME PHONE CALLS, UM AT OUR
OFFICE, TOO, AND PEOPLE REALLY
ARE STRUGGLING WITH THIS, AND I
THINK WE HAVE TO FIGURE THIS OUT
. ONE OF THE IDEAS THAT WAS
BROUGHT TO OUR OFFICE, UM BY THE
PUBLIC ADVOCATES WHEN WE HAD A
MEETING. WAS AROUND DIFFERENT
WAYS THAT UTILITIES MAY HAVE A
LITTLE TOO MUCH FLEXIBILITY AND
KIND OF PADDING THE BOOKS, UM,
FOR LACK OF A BETTER TERM. UM
YOU KNOW, FOR EXAMPLE, IF
THERE'S TRUCKS THAT HAVEN'T BEEN
USED FOR YEARS, BUT THEY'RE
STILL BEING CHARGED AS CURRENTLY
BEING USED OR ARE THERE WAYS
LIKE WHAT IS KIND OF THE
OVERSIGHT OR, UM YOU KNOW, OR OR
KIND OF, YOU KNOW. ARE THERE
WAYS FOR YOU TO REALLY DIG INTO
ARE ALL OF THESE COSTS REAL, YOU
KNOW, OR ARE SOME OF THEM JUST
KIND OF CARRIED OVER FROM THE
YEAR BEFORE, AS THIS IS AN
ANNUAL COST THAT WE HAVE, AND
THEY COULD ACTUALLY BE. THOSE
TRUCKS THAT ARE NOT USED COULD
BE WRITTEN OFF AND OFF THE BOOKS
. UM ARE THERE WAYS IN WHICH
THERE CAN BE A LITTLE MORE
SCRUTINY ON WHAT'S INCLUDED IN
THE IN THE COSTS? WE KNOW. YOU
KNOW, STUFF LIKE THAT HAPPENS
ALL THE TIME, RIGHT? AND SO HOW
CAN WE FIND WAYS TO REALLY BRING
THOSE COSTS DOWN? UM THAT'S A
GOOD QUESTION. WE DO DO
OVERSIGHT AND INSPECTIONS ON
THINGS LIKE ARE YOU? UM I ARE.
ARE YOU BEING EFFICIENT IN THE
WAY, YOU EX? UH UM, INSPECT YOUR
INFRASTRUCTURE AND HAVE YOU DONE
THE INSPECTIONS? YOU SAID YOU'RE
GOING TO DO IN ORDER FOR SAFETY.
FOR THINGS LIKE YOU KNOW YOUR
OPERATIONS AND USE OF TRUCKS. UM
I'LL HAVE TO SEE IF THERE'S A
WAY THAT WE PROVIDE OVERSIGHT OF
THAT, MAINLY, IT IS LOOKING AT
THE END OF THE YEAR WHETHER
EXPENDITURES HAVE BEEN MADE, AND
WE EXPECT THE UTILITIES, UM TO
MANAGE THEIR SYSTEMS EFFICIENTLY
. UM IF, UH, THE AND THEN USE
EACH GENERAL RATE CASE AS A WAY
TO GET INFORMATION FROM PARTIES
LIKE THE PUBLIC ADVOCATE'S
OFFICE ON TELL US WHAT
INEFFICIENCIES YOU SEE, AND WE
TAKE THAT INTO ACCOUNT. UM AND
SO THAT'S THE OPPORTUNITY TO
HAVE INFORMATION ON YOU KNOW,
ARE THERE BETTER WAYS TO DO THIS
ARE THE UTILITIES NOT, UM, BEING
EFFICIENT IN THE WAY THAT THEY
MANAGE THEIR OPERATIONS? WHETHER
IT'S TRUCKS OR, UM, INSPECTIONS
ARE, UH, OTHER TYPES OF IT
SYSTEMS. UM AND WE CAN ALSO DO
INFORMATION REQUESTS AND SO WE
CAN ASK ABOUT PRETTY MUCH
ANYTHING THAT THEY DO FOR THEIR
OPERATIONS. SO WE DO HAVE THE
ABILITY TO DO THAT AND COULD DO
IT EITHER AS PART OF A GRC OR
OFF CYCLE. ASSEMBLY MEMBER
REYES. THANK YOU, MADAM. CHAIR
PRESIDENT REYNOLDS. IT'S GOOD TO
SEE YOU. I WANTED TO ASK A
QUESTION SPECIFICALLY ABOUT THE
UNDERGROUND. UM THE BACKGROUND
PAPER CITES THE THAT LAST YEAR,
THE èC PU èC APPROVED $13.5
BILLION PER PG AND E 2020 THREE
REVENUE REQUIREMENT THAT WAS
ALMOST AN 11% INCREASE COMPARED
TO THE PREVIOUS YEAR. MAKING
THEM THE MOST EXPENSIVE POWER
PROVIDER IN CALIFORNIA. THE
REASON GIVEN BY THE COMMISSION
WAS INFLATION AND ELECTRIC LINE
UNDERGROUND. UM THE COST
DIFFERENCE BETWEEN UNDERGROUND
THE LINES IT 5 MILLION PER MILE
FOR, UH FOR EDISON AND FOUR
POINT THREE MILLION FOR PG AND E
. BUT THE DIFFERENCE BETWEEN
THAT AND OTHER MEASURES SUCH AS
FAST TRIP WHICH COSTS 5600 MILES
FOR PG AND E ARE TREMENDOUS. MY
QUESTION IS GIVEN THAT THERE ARE
SIGNIFICANT COST DIFFERENCES
BETWEEN WILDFIRE MITIGATION
MEASURES. WHAT IS THE COMMISSION
DOING TO CONTROL FOR THE HIGH
COST OF UNDERGROUND VERSUS MORE
EFFECTIVE APPROACHES, SUCH AS
VEGETATION, MANAGEMENT COVERED
CONDUCTORS OR OPERATIONAL
SETTINGS LIKE VÆ TRIPP? UM THANK
YOU FOR THE QUESTION. AND UM,
THE IN THE GENERAL RAY CASE, THE
, UM, THE COMMISSION LOOKED AT A
RANGE OF MITIGATION MEASURES
THAT WERE PROPOSED TO REACH A
RISK REDUCTION REDUCTION METRICS
. AND UM, I THINK THAT AND THE
PUBLIC ADVOCATE SIDE THE THERE
WAS MORE. UM UH COVERED
CONDUCTOR SUGGESTED PGE HAD
PROPOSED MORE UNDERGROUND IN THE
COMMISSION ENDED UP SOMEWHERE IN
BETWEEN. UM AND, UM CONTINUE TO,
UM, TO MONITOR EFFECTIVENESS
WHEN YOU THINK ABOUT, UH FAST
TRIP FAST TRIP IS EFFECTIVE AND
IT HAS BEEN SHOWN. PG HAS
STARTED TO USE IT AND STARTED TO
MONITOR ITS, UM, SUCCESS. IT HAS
SHOWN A REDUCTION IN IGNITIONS.
IT DOES HAVE AN IMPACT ON
RATEPAYERS BECAUSE WHEN THE LINE
IS TRIPPED, THE POWER GOES OUT.
UM AND SO, FROM THAT PERSPECTIVE
THERE IT IT IS NOT WITHOUT
IMPACT, SO IT'S LOWER COST BUT
HIGHER IMPACT ON CUSTOMERS. FOR
VEGETATION MANAGEMENT.
VEGETATION MANAGEMENT IS WILL BE
DONE. UH UH, WITH NÓ END INTO
THE FUTURE, UM, UNLESS WE'RE
ABLE TO FIND DIFFERENT
MECHANISMS TO STRENGTHEN THE
SYSTEM, UM, UNDERGROUND CAN BE
PERMANENT IF WE'RE ABLE TO DO
IT, AND SO ALL OF THESE MEASURES
HAVE BENEFITS AND DRAWBACKS, SO
I THINK IT'S A MATTER OF
CONTINUING TO MONITOR THE
UTILITIES TO MAKE SURE THEY'RE
DOING THE ACHIEVING THE RISK
REDUCTION METRIC THAT WE WANT
THEM TO ACHIEVE AND CONTINUING.
TO DRIVE COSTS DOWN. UM FOR ALL
OF THESE MEASURES, UM AND USE
THEM THE MOST EFFECTIVE WAY
POSSIBLE. WE DO HAVE, UM, THE
OFFICE OF ENERGY INFRASTRUCTURE
SAFETY LOOKING AT THESE
QUESTIONS AS WELL, AND THEY DO
OVERSIGHT AND REPORTING OF ALL
OF THE UTILITIES, WELFARE
MITIGATION PLANS. UM, AND THAT'S
SOMETHING THAT WE LOOK AT. ALSO
IN TERMS OF FINDING THE BEST WAY
TO REDUCE UTILITY CAUSED
IGNITIONS. SO IT'S A GREAT
QUESTION AND A AND A DIFFICULT
ANALYSIS. AND I THINK IT GOES TO
THE HEART OF WHAT WE'RE TRYING
TO FIGURE OUT IS THAT SOMETHING
THAT IS COST EFFECTIVE, LOWER
RISK, BUT STILL, WE HAVE TO BE
CONCERNED ABOUT EVERYTHING THAT
HAS BEEN TALKED ABOUT, AND THAT
IS THE CALLS FROM OUR FROM OUR
CONSTITUENTS. IT IT. IT'S
UNTENABLE NOW TO IT'S
UNSUSTAINABLE TO EXPECT OUR
CONSTITUENTS TO EXPECT THE USERS
TO CONTINUE TO PAY INCREASED
RATES. ANOTHER QUESTION THAT
SEEMS THAT A PORTION OF RATE
COSTS FROM TRANSMISSION
DISTRIBUTION. THAT COMES FROM
TRANSMISSION DISTRIBUTION AND
WILDFIRE MITIGATION UPDATES.
SOME OF THESE SEEM DIFFICULT TO
MINIMIZE, BUT HOW MUCH EQUITY IS
RETURNED, MAYBE A WAY OF
LOWERING COSTS. SETTING
REASONABLE RETURNS ON EQUITY HAS
BEEN IDENTIFIED AS A WAY TO
IMPROVE RATE AFFORDABILITY. HOW
WILL THE COMMISSION ADDRESS IT
THIS YEAR? THE COMMISSION HAS,
UM, PERIODIC COST OF CAPITAL
PROCEEDINGS WHERE IT ATTEMPTS TO
DRIVE DOWN THE COST OF CAPITAL
AND CONSIDERS WHAT, UM, IS
EXPECTED TO ATTRACT CAPITAL. SO
THE UTILITIES FINANCE THEIR
INFRASTRUCTURE PROJECTS THROUGH
EQUITY AND DEBT. IN ORDER TO
ATTRACT CAPITAL. THEY NEED TO
HAVE A CERTAIN RATE OF RETURN.
UM OUR, UH, UTILITIES HAVE BEEN
AFFECTED BY WILDFIRE RISK AND
LIABILITY RISK. UM, BUT WE HAVE
BEEN ABLE TO GET THE COST OF
CAPITAL DOWN. OVER TIME, AND WE
HOPE TO CONTINUE TO DO THAT. OK?
THANK YOU. THANK YOU, MADAM
CHAIR, ALL RIGHT. ASSEMBLY
MEMBER, CONNOLLY. THANK YOU,
CHAIR AND TO ALL THE
PARTICIPANTS, UM, PROBABLY
RETREADING A LITTLE BIT OF
GROUND AT THIS POINT, SO WE'LL
TRY TO MINIMIZE THAT. BUT
DEFINITELY WANTED TO REITERATE
THE BIG PICTURE ABOUT, UM, THE
IMPACTS THAT, UM REALLY THESE
UNTENABLE RAY LEVELS ARE HAVING
ON OUR CONSTITUENTS. ON UTILITY
CUSTOMERS AND TAKING IT FROM A
NORTHERN CALIFORNIA LANDS. UH,
COULD NOT HELP AND NOTE THE
RECENT HEADLINE OF PG AND E
REPORTING MORE THAN $2.2 BILLION
IN PROFITS IN 2023 AND INCREASE
OF ABOUT 25% FROM 2022.
OBVIOUSLY IN AND WE'RE TALKING
ABOUT IT TODAY. IT'S AN ONGOING
DISCUSSION AROUND INCREASES IN
LEGITIMATE COSTS BEING PASSED ON
TO RATEPAYERS. VIS A VIS, UM,
SOMETHING WE NEED TO CONTINUE TO
LOOK AT, BUT, UM, ARE ARE
SOMEWHAT EXPLAINED BY UM SOME
OTHER EFFORTS WE'RE DOING, BUT
PLEASE, YOU KNOW, REALLY, WE
JUST WANT AN EXPLANATION. AS TO
WHY PGE PROFITS ARE INCREASING
BY A FULL QUARTER YEAR OVER YEAR
AT THE SAME TIME, THAT ENERGY
RATES CALIFORNIANS, UH, ARE
PAYING OUR SPIKING SO THAT'S
JUST A DIFFERENT WAY OF ASKING
OR DEMANDING. UH ANSWERS. UM
THAT YOU'VE HEARD. I THINK
ACROSS THE DÍAS AND CERTAINLY
FROM THE PUBLIC. I DON'T KNOW IF
YOU HAVE ANYTHING TO ADD AT THIS
POINT, BUT, UM, I WANTED TO GET
THAT OUT ON THE RECORD AS WELL.
I'M A SIMILAR, UM, ISSUE AND GET
TO SEE THAT IT'S VIRTUALLY ON
EVERYONE'S MIND IS, UM ARE KIND
OF COST APPROACHES THAT WE'RE
USING ON ONE HAND, WE KNOW THAT
AND I'M GLAD TO SEE US Dð, G AND
E HERE, FOR EXAMPLE, UM, ONE
STRATEGY CALLS FOR APPROXIMATELY
1500 MILES OF UNDERGROUND, UH,
BETWEEN 2022 AND 2032. BUT
THAT'S AN APPROXIMATELY THREE
MILLION DOLLARS PER MILE FOR
UNDERGROUND. SO UM, THAT IS A
TREMENDOUS COST. UH, TO RAY
PEARS. SO AGAIN, FOR, UM
DISCUSSION PURPOSES COULD USING
A COMBINATION OF OTHER
APPROACHES AND A COST EFFECTIVE
WAY. MAKE A DIFFERENCE IN
WILDFIRE RISK MITIGATION WHILE
AVOIDING SOME OF THE, UM COST
ASSOCIATED WITH SOME OF THE MORE
EXPENSIVE SOLUTIONS SO
ADDITIONALLY JUST WANTED TO, UH,
ADD MY VOICE TO THAT. QUESTION
UH, FOR, UH, PRESIDENT REYNOLDS
AND PERHAPS, PROFESSOR WARRA, UM
HOW ARE WE EVALUATING THE NEED
FOR COSTLY NEW TRANSMISSION
COMPARED TO OTHER APPROACHES
LIKE GRID ENHANCING TECHNOLOGIES
TO BETTER LEVERAGE EXISTING
LINES OR INCREASING DISTRIBUTED
GENERATION. UM PROFESSOR. YOU
UH, TESTIMONY, UH, TALKED ABOUT
ROOFTOP SOLAR. UM CUSTOMER SIDE.
UM SOLUTIONS ARE A BIG PART OF
WHAT WE WANNA DO. AND UM, IN
EFFECT COULD RESULT IN CAUSE
SAVINGS IF IT REDUCES THE NEED
FOR EXPENSIVE TRANSMISSION
PROJECTS IN CERTAIN INSTANCES,
BUT HAS THERE BEEN A DISCUSSION
OR A EVALUATION OF, UH, COST
BENEFIT OR OPPORTUNITY? COST
AROUND? UM EXPENSIVE NEW
TRANSMISSION COMPARED TO OTHER
APPROACHES. SURE I'LL START. UM
JUST TO, UM FOR BACKGROUND. SO
FOR INSTANCE, MARINE CLINT
MARINE CLEAN ENERGY. YOUR UH IN
YOUR DISTRICT, UM, ASSEMBLY
MEMBER PUTS TOGETHER AN
INTEGRATED RESOURCES PLAN, WHICH
ESSENTIALLY IS LEAST COST BEST
FIT PROCUREMENT, INCLUDING
TRANSMISSION COSTS, AND SO, UM
EACH LOAD SERVING ENTITY WILL
LOOK AT WHAT IT NEEDS TO COVER
ITS PROPORTION OF THE LOAD AND
PLANNING AHEAD FOR FORECASTS OF
INCREASED LOAD. UM AND THEN PUTS
TOGETHER A PROPOSAL OF WHAT WHAT
DOES IT LOOK LIKE NOW FOR SHORT
TERM PROCUREMENT, AND WHAT DO WE
NEED? OVER THE LONG TERM? THOSE
PLANS ALL ARE, UM, UH, COMPILED
AND RUN FOR RELIABILITY. UM AND
THEN, UH, CENTO FOR TRANSMISSION
PLANNING. UM KAISER, THEN DOES
UH UH, COST EFFECTIVENESS. UM
AND HAS A COST COMPETITIVENESS
COMPONENT BECAUSE IT DOES
SOLICITATIONS FOR TRANSMISSION
SOLUTIONS THAT ARE NEEDED TO
ACCOMMODATE THE BUILD OUT, AND,
UM, ONE OF THE POTENTIAL
SOLUTIONS IS GRID ENHANCING
TECHNOLOGY. UM IT HAS OK, SO HAS
SEEN SOME RESPONSES THAT INCLUDE
NEW TYPES OF TECHNOLOGIES TO BE
MORE EFFICIENT. THEY WORK IN
SOME PLACES, AND THEY DON'T WORK
IN OTHER PLACES. UM AND, UM,
RECON DURING SOMETIMES WORK, SO
THERE ARE OR THERE ARE VARIETY
OF OPTIONS AND USING THE A
COMPETITIVE PROCESS, THE LEAST
COST SOLUTIONS WILL COME UP. AND
SO IT IS A VERY IMPORTANT ASPECT
OF, UH, THE PLANNING FOR THE
FUTURE THAT WE DO. WE DON'T
REGULATE GENERATORS, SO
GENERATORS ARE NOT PART OF MOST
GENERATION IS DONE OUTSIDE OF
UTILITIES. THEY'RE NOT RATE RE
REGULATED. WE DON'T SEE THEIR
BOOKS. AND SO WE NEED
COMPETITION WE NEED YOU KNOW
THESE SOLICITATIONS TO ENSURE
THAT WE'RE GETTING THE COST, UM,
SOLUTIONS. THE NEW TECHNOLOGY IS
REALLY EXCITING, AND I THINK
IT'S YOU KNOW, GREAT TO SEE THAT
BUILD AND TRY TO GET THE MOST
OUT OF THE EXISTING SYSTEM THAT
WE CAN. SO I APPRECIATE THE
QUESTION. UH, TO SWIM MORE. UM,
THE BACKGROUND DOCUMENT ALSO
CITES A 43% INCREASE IN
DISTRIBUTION COSTS FROM 2020
THROUGH 2023. WHAT IS DRIVING
THAT RAPID INCREASE? UM, IS IT
THE UTILITIES DECIDING ON THE
SCALE OF THESE DISTRIBUTION
INVESTMENTS? UM ARE THE COSTS
SIGNED OFF ON BY èC P èC. UM,
AND IF SO, HAS THERE BEEN ANY
PUSHBACK? ON THOSE COSTS AND DO
WE EXPECT DISTRIBUTION COSTS TO
CONTINUE TO INCREASE AT THAT
PACE? WE'D LIKE TO SEE THE CARS
CONTAINED IF POSSIBLE. ANOTHER
GREAT QUESTION. SO THE, UM IN
THE COSTS INCREASES THAT WE'VE
WE'RE SEEING NOW MOSTLY RELATED
TO WILDFIRE, UM, MITIGATION, SO
THERE'S DISTRIBUTION SYSTEM
COSTS LARGE COMPONENT OF THAT AS
WELL FOR MITIGATION AND IN PG
AND E CASE THEY'RE CATCHING UP
IN IN RATES. SO IF YOU LOOK AT
THE SAME REPORT THAT YOU'VE SEEN
FROM S¼, DG AND EPGE WAS
ACTUALLY SIGNIFICANTLY UNDER IN
COLLECTING FOR A NUMBER YEARS.
IT'S NOW COLLECTING THOSE COSTS
THROUGH OUR PROCESS THROUGH
MEMORANDUM ACCOUNTS THAT TAKE A
WHILE FOR US TO REVIEW AND
SCRUTINIZE GET INFORMATION FOR
PUBLIC ADVOCATES ACCOUNT. WE
DON'T WE DON'T APPROVE
EVERYTHING, SO THEY HAVE TO
ESSENTIALLY NOT RECOVER FOR SOME
OF THE COSTS THAT THEY'VE SPENT
FOR SOME PORTION OF THESE, UM
COSTS, BUT A LOT OF THEM ARE
NECESSARY FOR WELFARE MITIGATION
. UM AND SO THAT'S WHERE A LARGE
PART OF THE INCREASE IS THAT
WE'RE SEEING NOW ARE I DO
ANTICIPATE SEEING INCREASES FOR,
UM OTHER TYPES OF DISTRIBUTION
SYSTEM UPGRADES AND, FOR
INSTANCE, UM, ENERGIZING REQUEST
. UM AND WE TALKED A LITTLE BIT
ABOUT THAT. WE DO HAVE A REQUEST
FROM PG AND E TO INCREASE COSTS
FOR SYSTEM UPGRADES NEEDED FOR
NEW ENG ORGANIZATION. THE
DISTRIBUTION SYSTEM IS, UH AT
CAPACITY IN MANY PLACES, AND WE
ARE SEEING SIGNIFICANT DELAYS IN
ENERGI ORGANIZATION, UM, WHICH
WERE ALSO ADDRESSING AND HAS
GIVEN US DIRECTION TO REALLY
LOOK HARD. AT WHAT TIMELINES WE
SHOULD EXPECT THE UTILITIES TO
MEET FOR THIS BASIC SERVICE THAT
THEY PROVIDE. UM BUT SOME, UH,
CAPACITY CONSTRAINTS INVOLVE
UPGRADES TO, UM SUBSTATIONS,
THINGS THAT INVOLVE PERMITTING
PROCESSES THAT DO TAKE TIME. SO
WE'LL BE LOOKING ALL OF THAT,
AND AT ALL OF THAT WE'LL
APPRECIATE INFORMATION FROM
PARTIES TO, UM, TO MAKE SURE
THAT WE'RE, UH UM MINIMIZING
COSTS AS MUCH AS POSSIBLE. ALL
RIGHT. THANK YOU. AND UM, THANK
YOU FOR JOINING US. PRESIDENT
REYNOLDS. I BELIEVE YOU'VE GOT,
UH, SOME SUBJECT MATTER EXPERTS
THAT CAN JOIN US ON THE DÍAS. IF
UM, MEMBERS HAVE ADDITIONAL
QUESTIONS ONCE YOU HAVE TO STEP
OUT, DIRECTOR RACHEL PETERSON IS
HERE FOR ANY QUESTIONS AND THANK
YOU VERY MUCH. CHAIR AND
COMMITTEE MEMBERS LOOK FORWARD
TO FOLLOWING UP WITH YOU ON A
NUMBER OF THESE TOPICS. THANKS
OK, UH, WHAT WE'LL DO IS TAKE,
UM, THE QUESTIONS THAT ASSEMBLY
MEMBER CALLED YOUR OWN AND HAD
FOR THE ADVOCATE. THEN WE WILL
HEAR. OUR REMAINING PANELISTS.
THANK YOU SO MUCH FOR YOUR
PATIENCE, UM, AND DIG INTO
ADDITIONAL QUESTIONS. SO, UH,
ASSEMBLY MEMBER CULTURE. GO
AHEAD, I. I BELIEVE YOU WERE
ASKING ABOUT WHAT WE WERE DOING
TO, UH, REVIEW. UH BALANCING
ACCOUNTS BASICALLY, UM, SO LET
ME JUST SAY THAT WE UM, WE
PRIORITIZE OUR REVIEW ON
BALANCING ACCOUNTS, UH, AGAIN,
GIVEN OUR RESOURCES, SO WE'RE
GOING TO LOOK AT BALANCING
ACCOUNTS THAT HAVE THE HIGHEST
AMOUNTS IN THEM. UM THEY'RE
THEY'RE, FOR EXAMPLE, THERE'S A
PURCHASE GAS ACCOUNT. THAT'S A
BALANCING ACCOUNT THAT CONTAINS
MORE THAN 50% OF THE COSTS THAT
ARE COME UNDER REVIEW FOR THE
COMMISSION BY A GAS COMPANY. SO
WE'RE GONNA LOOK AT THAT ACCOUNT
BEFORE ANY OTHER ACCOUNT. UM,
AND THAT'S HOW WE HAVE TO
PRIORITIZE OUR EFFORTS. SO I
ALSO WANNA SAY, UM, BALANCE
ACCOUNTS, IS THEY THEY THERE
COULD BE HUNDREDS OF LINE ITEMS
IN A BALANCING ACCOUNT AND SO
SIFTING THROUGH THAT INFORMATION
IS LABORIOUS. UM, SO THAT'S WHY
MY EMPHASIS ON RESOURCES IT IT'S
LIKE LOOKING FOR A NEEDLE IN A
HAYSTACK. UM IT IT IT TAKES A
LONG TIME. I MEAN, I HAVE BEEN
AN AUDITOR. I'VE I'VE DONE
AUDITING I. I KNOW THE WORK. IT
IS, UM, VERY CHALLENGING. AND
THEN YOU KNOW, WE HAVE TO ASK
UTILITY FOR THE INFORMATION.
THEY HAVEN'T PROVIDED ENOUGH
INFORMATION TO REVIEW AND THAT
TAKES TIME. SO UM, ALL THIS IS
TO SAY THAT WE DO PRIORITIZE OUR
EFFORTS BASED ON THE RESOURCES
THAT WE HAVE. ASSEMBLY MEMBERS
WERE GOOD AFTERNOON. UH, THIS IS
A QUESTION FOR, UH DEPUTY
DIRECTOR, SARA ZAWA. UM SO I
HEAR A LOT FROM MY CONSTITUENTS
CONCERNS ABOUT THE, UH NA M
PROGRAM AND ROOFTOP SOLAR. UH,
SOME FOLKS WORRIED THAT, UM,
THAT THE INCENTIVES EMBEDDED IN
THE RATE STRUCTURE ARE GONNA GO
AWAY, UM, AND UNFAIRLY, YOU
KNOW, AND REDUCE NECESSARY
INCENTIVES FOR DISTRIBUTED SOLAR
. AND THEN FOLKS ON THE OTHER
SIDE WORRIED THAT, UM, THAT
FOLKS WITHOUT ROOFTOP SOLAR ARE
NOT REALLY FOR UNFAIRLY
BURDENED. UM, YOU THE PUBLIC
ADVOCATE'S OFFICE RELEASED AN
UPDATED ANALYSIS, CITING AN
ESTIMATED IN 2024 COST SHIFT OF
ABOUT $6.5 BILLION THAT NON
SOLAR CUSTOMERS PAY TO SUBSIDIZE
ROOFTOP SOLAR CUSTOMERS. I WAS
WONDERING IF YOU COULD TALK A
LITTLE BIT ABOUT HOW MUCH YOU
THINK THE CPC'S CURRENT RATE
REFORM EFFORTS ARE CHANGING THAT
$6.5 BILLION ESTIMATE ON AN
ONGOING ON A GOING FORWARD
BASIS. THANK YOU FOR THAT
QUESTION. THE $6.5 BILLION
ALREADY TAKES INTO CONSIDERATION
. THE UM THE REFORMS ON THE
DRIFT TOP SOLAR PROGRAM. SO UM,
THAT'S THAT'S UNFORTUNATE. WE DO
BELIEVE THAT THE COMMISSION'S
DECISION LAST YEAR WAS VERY
HELPFUL IN TERMS OF, UM
DECREASING THE COST SHIFT. BUT
THERE IS MORE TO BE DONE. AND
I'M SPECIFICALLY REFERRING TO
THOSE èC. I THINK, UH UH, A WAR
I REFERRED TO, UM, LEGACY NUMB
CUSTOMERS, UH, CUSTOMERS WHO GOT
INTO THE PROGRAM EARLY ON, UM
THEY ARE STILL ENJOYING, UH, A
LOT OF INCENTIVES. UM AND ALSO
THEY THEY THE PAYOFF FOR THEIR
INVESTMENTS. ARE IT SOMETIMES 3
TO 4 YEARS? THAT'S QUITE A GREAT
PAYOFF AND UNDER THAT WE'VE
PROPOSED. WE'RE LOOKING AT 7 TO
8 YEARS, WHICH IS STILL PRETTY
GOOD AND I. I ALSO WANT TO
EMPHASIZE THAT THE PUBLIC
ADVOCATE'S OFFICE SEES A
VALUABLE ROLE FOR ROOFTOP SOLAR.
BUT WE THINK THOSE INCENTIVES
UM, ARE JUST TOO BURDENSOME
RIGHT NOW. THANK YOU. ALL RIGHT.
AND THEN ASSEMBLY MEMBER TING. I
THINK YOU HAD ANOTHER, UH, QUICK
QUESTION. OH, IT WAS JUST COMING
BACK TO THAT QUESTION THAT YOU
WERE ABLE TO. YOU SAID YOU COULD
ANSWER SO I, BUT I CUT YOU OFF.
YEAH, ACTUALLY, THIS IS SOMEWHAT
RELATED TO WHAT WE WERE JUST
TALKING ABOUT. UM SO, UM, AT
LEAST MORE RECENTLY, UH, UTILITY
. WHAT WE'RE FINDING IS THAT
UTILITY SPEND IS LOWER THAN THE
ACTUAL RATE THIS THAT YOU'RE
SEEING. SO UM, WHICH DOES RAISE
QUESTIONS, AND, UH, EARLIER IN
MY PRESENTATION, I POINTED TO
TWO REASONS THE FIRST HAS TO DO
WITH UM, SUBSIDY PROGRAMS LIKE
ROOFTOP SOLAR, WHERE CUSTOMERS
WHO ARE NOT ABLE TO PARTICIPATE
IN THE PROGRAM ARE BEARING MORE
OF THE COST BURDEN AND SO THEIR
RATES THE RATES ARE HIGHER. THE
BILLS ARE HIGHER. UM AND THE
OTHER, UH REASON IS THAT, UM
THERE ARE COST AND EFFECTIVE
PROGRAMS THAT RAPIERS ARE PAYING
FOR, AND WE'RE SUGGESTING TO
ELIMINATE THOSE FROM, UH, RATES
NÓ. WE'RE NOT SUGGESTING THAT
THEY'RE NOT VALUABLE PROGRAMS.
BUT WE'RE SAYING THAT PERHAPS
THEY SHOULD BE FUNDED A
DIFFERENT WAY, NOT THROUGH
ELECTRIC. RATE. BUT THEN IF
THEY'RE NOT, UM IF THEY DON'T
NEED THAT RATE INCREASE. WHY DO
THE RATE INCREASES? KEEP GETTING
APPROVED? MAYBE I'M ASKING THAT
QUESTION. INCORRECTLY, I GUESS,
UM I WE ARE AT THE PUBLIC
ADVOCATES OFFICE IS TRYING TO
POINT OUT WHERE PROGRAMS ARE NOT
COST EFFECTIVE. WE'VE I THINK
HAVE A LONG TRACK RECORD OF
POINTING THOSE ISSUES OUT. UM
AND WE WILL CONTINUE TO AND
ADVOCATE FOR ELIMINATING
ELIMINATING THEM FROM THE RIGHT.
GOT IT. SO YOU'RE SO YOU'RE SO
YOU'RE SAYING IT'S BECAUSE OF
SOME OF THESE PROGRAMS BEING
EMBEDDED IN THE RATE IS THAT
SORT OF WHAT YOU PROGRAMS THAT
ARE NOT COST EFFECTIVE AND ALSO
DON'T HELP TO ACHIEVE THE
STATE'S ENERGY POLICY. AND THEN
DO YOU HAVE A LIST OF SOME OF
THESE? I I'M SURE YOU'VE
HIGHLIGHTED THEM. SO MAYBE YOU
COULD GIVE US IN THE
PRESENTATION IN VERY TINY PRINT
BECAUSE YOU COULDN'T ACTUALLY
FIT IT ON ONE PAGE MY READING
GLASSES HERE, BUT I'M HAPPY TO
PROVIDE THAT INFORMATION TO YOU
IN A MORE READABLE FORMAT,
RIGHT? BUT COULD YOU JUST JUST
SINCE WE'RE HERE? MAYBE SAY ONE
OR TWO JUST TO KIND OF JOG ON.
THERE'S A LOT OF ENERGY
EFFICIENCY PROGRAMS, FRANKLY,
THAT ARE NOT COST EFFECTIVE. UH,
SOME DEMAND RESPONSE. ARE ALSO
NOT COST EFFECTIVE. FRANKLY WE
WOULD LIKE TO SEE AN EVALUATION
OF THESE PROGRAMS
COMPREHENSIVELY AND ALSO TO MAKE
SURE THAT THESE PROGRAMS ARE
ACHIEVING THE STATE'S ENERGIZING
GOALS AND CLIMATE GOALS. YEAH I
CAN AGREE WITH HIM. I KNOW WITH
ONE PART OF ENERGY EFFICIENCY
MONEY I'VE BEEN LOOKING AT FOR
YEARS. OFTEN TIMES. IT JUST SORT
OF JUST SITS THERE. SO THE RATE
THE RATE PAYERS PAY INTO IT. IT
JUST SITS THERE TRYING TO GET
THE COMMISSION OR THE UTILITIES
TO MOVE. THE MONS SEEMS
IMPOSSIBLE. THEN WHEN WE TRY TO
MOVE IT. THEY GET VERY OFFENDED.
SO IT'S JUST SORT OF, UM, II. I
UNDERSTAND WHAT YOU'RE SAYING.
SO IF THAT THAT'S SOMETHING YOU
COULD PROVIDE TO US IN A LIST
THAT IS LEGIBLE, UH IT'S NOT
YOUR EYESIGHT, PHIL. IT REALLY
IS THAT TINY. IT'S NOT. I AGREE
WITH MY READING GLASSES. THEY'RE
VERY HARD TO READ. I'D BE HAPPY
TO PROVIDE THAT INFORMATION TO
YOU. THANK YOU. OK SO WITH THAT,
UM WE ARE GOING TO GO AHEAD AND
TURN TO OUR, UH, REMAINING
PANELISTS FOR THEIR COMMENTS AND
APPRECIATE YOUR PATIENCE. UM WE
ARE GOING TO HEAR FROM ADAM
PIERCE, WHO'S THE VICE PRESIDENT
OF ENERGY PROCUREMENT AND RATES
FROM SAN DIEGO GAS AND ELECTRIC.
AND UM, I, I WOULD SAY, I THINK
IT IF AS PART OF YOUR COMMENTS,
I THINK IT WOULD BE REALLY
HELPFUL FOR YOU TO ADDRESS THE
QUESTION THAT ASSEMBLY MEMBER
BERNER AND ASSEMBLY MEMBER
CONNOLLY RAISED, WHICH IS THAT
WE'RE WATCHING THIS SPLIT SCREEN
PLAY OUT WHERE ON THE AND WE'RE
LOOKING AT SKYROCKETING RATES
AND ON THE OTHER. WE'RE READING
NEWS STORIES ABOUT RECORD
PROFITS FOR THE I Ó U. SO IF
YOU CUT IT AS PART OF YOUR
COMMENTS, ADDRESS THAT AND, UH
HELP US UNDERSTAND HOW THAT'S
POSSIBLE. DEFINITELY AND THANK
YOU, UH MADAM CHAIR AND MEMBERS
OF THE ASSEMBLY REALLY
APPRECIATE YOU ALL PUTTING THIS
IMPORTANT? UH, UH, HEARING ON
TODAY. IT'S A VERY IMPORTANT
TOPIC HERE AT S¼, Dð G AND E N
ONE THAT WE TAKE VERY SERIOUSLY
AND AFFORDABILITY IS REALLY AT
THE TOP OF MIND AS WE'RE
THINKING ABOUT PROVIDING SAFE
AND RELIABLE. FOR OUR CUSTOMERS
AS WELL AS HELPING THE STATE
MEET ITS CLIMATE GOALS. SO I
THOUGHT I WOULD WALK THROUGH A
FEW SLIDES WITH YOU ALL TODAY
AND JUST HIGHLIGHT A FEW THINGS
FIRST LOOKING AT IF WE CAN GO TO
THE NEXT SLIDE, PLEASE. I DON'T
KNOW IF UH, WHAT SOME OF THE
RATE IMPACTS WE'VE BEEN SEEING
OVER THE LAST FEW YEARS AND I
THOUGHT I'D START WITH WHAT
MAKES UP OUR OUR RATES TODAY. AS
YOU SAW FROM SOME OF THE OTHER
PRESENTATIONS EARLIER, WE SAW
ABOUT A 14% DECREASE IN OUR
SYSTEM. AVERAGE RATE. UH AS OF
THREE 1 2024. UM AND IT'S REALLY
COMPOSED OF THREE MAIN MAIN
BUCKETS HERE THAT I'LL TALK
ABOUT HERE ON THE SLIDE. YOU
COULD SEE REALLY THE CORE OF OUR
BUSINESS. THE TRANSMISSION AND
DISTRIBUTION RATES MAKE UP JUST
UNDER 50% OF THAT AVERAGE RATE.
SO THIS IS THINGS LIKE, UM,
SUBSTATIONS POLES, WIRES,
BRINGING ELECTRICITY INTO THE
SAN DIEGO REGION AND INTO OUR
BUSINESS AND OUR HOMES. THE NEXT
BUCKET YOU'LL SEE HERE IS STATE
MANDATES THAT THAT TEAL BUCKET
AND THAT'S REALLY DRIVEN BY BY
TWO BIGGER ONES ARE, UH, PUBLIC
PURPOSE PROGRAMS OR PPP AND OUR
RENEWABLE PORTFOLIO STANDARDS.
UH, THOSE MAKE UP JUST UNDER
ABOUT 20% OR SO OF OUR OUR
AVERAGE RATE, AND THERE'S A FEW
OTHER, UH, RELIABILITY IN IN
OTHER STATE MANDATES THAT ARE
INCLUDED IN THAT AND THAT MAKES
UP JUST UNDER 25% OF OUR CURRENT
AVERAGE RATES TODAY. IN THE LAST
PIECE YOU COULD SEE HERE IS ON
THE COMMODITY SIDE AND THERE'S
TWO PIECES. I WANTED TO
HIGHLIGHT THERE ON ON COMMODITY,
ONE OF WHICH I THINK WE'VE
TALKED ABOUT BEFORE, BUT IN THE
STATE OF CALIFORNIA ELECTRIC
UTILITIES CANNOT EARN ANY RETURN
ON THE SALE OF ELECTRICITY, UH,
TO ITS CONSUM TO ITS CONSUMERS,
SO TO THE EXTENT WE'RE BUYING AN
ELECTRON IN THE MARKET FOR A
DOLLAR, THAT SAME DOLLAR IS IN
PASS ALONG TO OUR CUSTOMERS, AND
THOSE COSTS ARE TRACKED, AND
THEN THEY'RE CHEW UP, UH, AT THE
END OF EACH YEAR AND GO TO RATE
THE FOLLOWING YEAR. THE OTHER
THING THAT'S A LITTLE MORE
UNIQUE TO S¼ Dð G AND E SERVICE
TERRITORY. IS THAT ABOUT 80% OF
OUR CUSTOMERS IN SAN DIEGO
COUNTY ARE ARE CURRENTLY GETTING
THE SERVICE FROM ANOTHER
PROVIDER, MOST NOTABLY THE TWO
COMMUNITY CHOICE AGGREGATORS IN
OUR SERVICE TERRITORY. MOVING TO
THE NEXT SLIDE. WE WANT TO
EXPAND THIS A LITTLE BIT MORE
AND TAKE A ABOUT A TWO DECADE OR
SO. LOOK AT AT WHAT THE RATE
TRAJECTORY HAS SEEN, UH, FOR SAN
DIEGO'S AND OTHERS ACROSS THE
STATE. AND REALLY STARTING IN IN
2007 IT. IT'S NÓ SURPRISE TO
ANYONE, UM SAN DIEGO COUNTY IN
PARTICULAR. UH OUR SERVICE
TERRITORY HAS A HISTORY OF
WILDFIRES. UH, WE HAVE ABOUT
4100 SQUARE MILE SERVICE
TERRITORY. ROUGHLY TWO THIRDS OF
THAT I IS COVERED IN ELEVATED
HIGH FIRE THREAT DISTRICTS AND
SO AFTER THE WILDFIRES OF 2007,
WE REALLY MADE A CONCERTED
EFFORT AND CONSCIOUS EFFORT AS
AS A COMPANY THAT THAT WASN'T
GONNA HAPPEN AGAIN. AND REALLY
OVER THE LAST TWO DECADES, WE'VE
BEEN ACROSS OUR BACK COUNTRY,
HIRING METEOROLOGISTS PUTTING
CAMERAS UP, UH, LOOKING AT OTHER
WAYS OF PREDICTIVE MODELING TO
HELP DESIGN OUR SYSTEM TO BE
ABLE TO STAND THIS EXTREME
WEATHER THAT WE'RE SEEING. AND
WE'RE HAPPY TO SAY SINCE THOSE
2007 WILDFIRES WE HAVE NOT SEEN
A CATASTROPHIC UTILITY CAUSED
WILDFIRE IN SAN DIEGO AND OVER
THE SAME TIME PERIOD 18 YEARS IN
A ROW. SAN DIEGO GAS AND
ELECTRIC HAS BEEN RECOGNIZED AS
THE MOST RELIABLE UTILITY IN THE
WEST, SOMETHING WE'RE VERY, VERY
PROUD OF FOR OUR CONSTITUENTS
AND OUR CUSTOMERS. MOVING OVER
TO THE SLIDE. YOU COULD SEE THE
NEXT THING I'VE CALLED OUT HERE
IS, UH OH, I'M SORRY. WE'RE
STILL ON THE SAME SLIDE.
DECLINING SALES. THIS GETS TO A
LITTLE BIT OF WHAT ASSEMBLY
MEMBER TING WAS HIGHLIGHTING AND
LOOKING AT REVENUE REQUIREMENTS
STAYING FLAT, BUT RATES GOING UP
. SO IF YOU THINK THE MAJORITY
OF, UH THE UTILITIES COST ARE
FIXED, THOSE REALLY OUTSIDE OF
THAT ELECTRIC GENERATION AND
WHAT WE'VE SEEN AT LEAST AT S¼,
Tð, G AND E FOR ABOUT 2014 TO
2021 ABOUT A 2% OR SO ANNUAL
DECREASE IN OUR AVERAGE SALES.
SO EVEN IF WE DIDN'T SPEND
ANOTHER DOLLAR, WHICH WE KNEW WE
WERE, UH, HARDENING OUR SYSTEM
FOR WILDFIRE. UH, WE RATES
INCREASE ABOUT 2% SO THAT'S THE
PHENOMENON. YOU'RE SEEING A BIT
THERE WITH THOSE FIXED COSTS
BEING RECOVERED OVER AAA SMALLER
BASE. COULD COULD YOU COULD YOU
RESTATE THAT AGAIN? YOU SAID
IT'S ONE MORE TIME, PLEASE. SO
THE MAJORITY OF OUR COST SORT OF
OUTSIDE OF THE ELECTRIC
GENERATION IS RELATED TO FIXED
COST SO THOSE DON'T CHANGE AS
SALES CHANGE. SO WHAT WE'VE SEEN
FROM 2014 TO 2021, ESPECIALLY IN
S¼ Dð GE SERVICE TERRITORY AS
THINGS LIKE ROOFTOP, SOLAR AND
ENERGY EFFICIENCY CONTINUE TO
MAKE ITS WAY INTO OUR SERVICE
TERRITORY. WE'VE SEEN THOSE
SALES DECLINE PRETTY REGULARLY
ON AVERAGE, SO YOU'RE SEEING THE
SAME FIXED COST BEING ABSORBED
BY FEWER CAUSING THE RATES TO
ULTIMATELY INCREASE AND BE
BESIDES, JUST, YOU KNOW THE
POLLS. THE INFRASTRUCTURE, WHICH
OBVIOUSLY FIXED COSTS, IS, IS IT
ARE YOU TALKING ABOUT LABOR AS
WELL OR YEAH, THIS IS THINGS
LIKE POLES, WIRES, SUBSTATION.
THEY STATE MANDATES THAT WE
TALKED ABOUT THINGS THAT AREN'T
DEPENDENT ON THE ACTUAL USE OF
ELECTRICITY. OK THANK YOU. AND
SO TO PUT IT IN PERSPECTIVE, S¼
Dð GE. ON AVERAGE THEY'RE
BUNDLED CUSTOMERS USE ABOUT 400
KILOWATT HOURS A MONTH. THE
NATIONAL AVERAGE IS ROUGHLY
DOUBLE THAT SO IF YOU TOOK OUR
SAME REVENUE REQUIREMENT AND PUT
IT ONE OF THOSE AVERAGE SERVICE
TERRITORIES ACROSS THE U S¼ ARE
33 CENT RATE WOULD CUT IN HALF
AND SO AGAIN. I THINK THAT'S
WHAT WE'VE TALKED A LITTLE BIT
TODAY ABOUT WHAT WE CAN DO
AROUND ENCOURAGING
ELECTRIFICATION AROUND THE STATE
HAVING CLEAN, YOU KNOW, VEHICLES
, ELECTRIC SPACE HEATING
ELECTRIC WATER HEATING. ALL
THOSE THINGS ARE GONNA USE A
MORE ELECTRICITY. AND AS WE HAVE
MORE ELECTRICITY, WE'RE GONNA
HAVE MORE, UH, ELECTRONS TO
SPREAD THOSE COSTS ACROSS MOVING
ON. UM WE HAVE, UH, ROOFTOPS ALL
AROUND HERE, AND I'LL GET TO
THAT ON THE NEXT SLIDE BUT
REALLY WANTED TO HIGHLIGHT HERE
IS REALLY THE PROLIFERATION OF
ROOFTOP SOLAR. WHAT WE'RE SEEING
IN OUR SERVICE TERRITORY IN 2006
ABOUT 0.3% OF OUR CUSTOMERS HAD
ROOFTOP SOLAR RESIDENTIAL
CUSTOMERS HAD ROOFTOP SOLAR THAT
HAD GROWN TO ABOUT 5% BY 2015.
UH, AND BY 2017 18. WE'D SEEN IT
DOUBLE TO 10% AND NOW, UH, WE'VE
SEEN A DOUBLE AGAIN TO WELL TO
ABOUT 24 OR 20 3% RIGHT NOW
TODAY, SO AGAIN, REALLY, REALLY
LARGE PROLIFERATION OF ROOFTOPS.
SOLAR THAT'S HELPING CONTRIBUTE
TO SOME OF THAT SALES PHENOMENA
THAT THAT I JUST TALKED ABOUT.
AND THE LAST THING THAT I WANTED
TO HIGHLIGHT ON THIS CHART WAS,
UM FROM 2021 TO 2020 THREE. I
THINK THE STATE AUDITOR TALKED A
LITTLE BIT ABOUT THIS, BUT WE
REALLY SAW A LOT OF VOLATILITY
IN THE COMMODITY MARKETS AS WE
SAW IN NATURAL GAS PRICES REALLY
RAMPING UP, UH, DUE TO A LOT OF
FACTORS, WHETHER STORAGE, UH,
PIPELINE CONSTRAINTS COMING INTO
SOUTHERN CALIFORNIA, SO AS THOSE
NATURAL GAS COSTS INCREASE, SO
DID THE POWER PRICE. SO BETWEEN
2021 AND 2023. OUR AVERAGE RATES
WENT UP ABOUT 12. CENTS NINE OF
THAT 12 CENTS. WAS RELATED TO
OUR COMMODITY RATES. SO YOU
COULD SEE TODAY WHERE WE'RE JUST
AT, UH, JUST OVER 30. THREE
CENTS, UH, A LITTLE BIT BELOW PG
AND E AT AT 36.6 AND A LITTLE
BIT ABOVE, UM S¼ EE AT 27.2. AND
THE LAST THING THAT I'D POINT
OUT IS IF YOU LOOK AT ON THE TOP
LEFT OF THIS CHART, YOU COULD
SEE THE TYPICAL RESIDENTIAL BILL
FOR OUR CUSTOMERS. YOU CAN SEE
S¼ Dð G AND E HAS THE LOWEST
BILLS OF THE THREE UH LARGE
ELECTRIC CONE UTILITIES IN IN
CALIFORNIA. SO MOVING TO THE
NEXT SLIDE. I KNOW I MENTIONED I
TALK A LITTLE BIT ABOUT, UH, THE
COST SHIFT, AND WE'VE HEARD A
LOT ABOUT THE 6.5 BILLION
STATEWIDE THAT THE PUBLIC
ADVOCATE'S OFFICE JUST RECENTLY
PUBLISHED, SO WHAT WE DID IS WE
ACTUALLY LOOKED AT THIS
SPECIFICALLY IN S¼, Dð, G AND E
SERVICE TERRITORY OF THE LAST
DECADE. AND WHAT WE'VE SEEN IS
WE TRY TO PUT THIS IN IN REAL
CUSTOMER DOLLARS AND REAL IMPACT
OF THOSE THOSE ROUGHLY 80% OF
OUR CUSTOMERS THAT DON'T HAVE
ROOFTOP SOLAR TODAY. AND YOU
COULD SEE BACK IN 2013. THE CAR
SHIFT THAT THAT NON SOLAR
CUSTOMERS WERE PAYING ON AN
ANNUAL BASIS WAS ABOUT $20 A
YEAR. WHAT WE SAW NOW AT THE END
OF 2023 THAT'S GONE UP TO $450 A
YEAR. AND JUST TO PUT THIS INTO
PERSPECTIVE, WE LOOKED AT THE
STATE COST SHIFT OF THE $6.5
BILLION ACROSS. UH AND COMPARE
THAT TO THE SUBSIDY FOR THE CARE
PROGRAM ARE LOW INCOME DISCOUNT
PROGRAM IN CALIFORNIA. THE
SUBSIDY FOR ROOFTOP SOLAR IS
OVER THREE TIMES THAT OF THE
SUBSIDY FOR LOW INCOME PROGRAMS
WITH ROUGHLY HALF THE CUSTOMERS.
SO AGAIN, YOU KNOW, WE AGREE
WITH EXACTLY WHAT PUBLIC
ADVOCATE'S OFFICE SAID THAT
SOLAR IS GOING TO BE A BIG PART
OF OUR ENERGY FUTURE AS
ELECTRIFICATION COMES IN MORE
ENERGY IS NEEDED, BUT WE NEED TO
MAKE SURE THAT THOSE CUSTOMERS
THAT CAN'T AFFORD IT ARE AREN'T
ALLOWED TO OR CAN'T PUT ROOFTOP
SOLAR ON THE ROOF AREN'T THE
ONES PAYING FOR IT? SO AS WE
LOOK TO THE FUTURE WANTED TO
HIGHLIGHT SOME OF THE CHALLENGES
THAT THAT WE'VE WE'VE TALKED
ABOUT TODAY, AND I DON'T THINK
ANY OF THOSE ARE ARE ANY, UH,
NEWS TO ANYBODY AS WE'VE HAD
THIS DISCUSSION TODAY, BUT IF WE
GO TO THE NEXT SLIDE, PLEASE SO
EXTREME WEATHER IS NOT GOING
AWAY. WE'VE SEEN, YOU KNOW 2020
2021 BE SOME OF THE WORST FIRE
SEASONS WE'VE SEEN ON RECORD
WE'VE SEEN WARMER AND WARMER
SUMMERS, UH, INCREASED AIR
CONDITIONING LOAD FOR OUR
CUSTOMERS IN SAN DIEGO. UH, IN
2020 THREE, WE ACTUALLY SAW A
TROPICAL STORM COME THROUGH SAN
DIEGO COUNTY. IT WAS LUCKILY
MUCH, UH, MILDER THAN ORIGINALLY
ANTICIPATED, BUT STILL 80 MILE
AN HOUR WINDS GOING ACROSS OUR
BACK COUNTRY, SO MAKING SURE OUR
SYSTEM IS RESILIENT AND RELIABLE
AND PROVIDING THAT ELECTRICITY
TO OUR CUSTOMERS WHEN THEY NEED
IT MOST IS GONNA BE PARAMOUNT
FOR US IN THE FUTURE. STATE
CLIMATE POLICY. WE TALKED ABOUT
ELECTRIFICATION BEING A BIG
DRIVER OF THAT E VÆ S¼ BY 2035
HEAT PUMP WATER HEATERS BY 2030.
THESE ARE ALL GONNA INCREASE
USAGE AND LOAD ON THE GRID. SO
MAKING SURE THAT GRID IS READY
AND ABLE TO HANDLE THAT IS GONNA
BE A NECESSARY INVESTMENT THAT
WE'RE GONNA HAVE TO LOOK FOR AND
CHALLENGE THAT WE HAVE TO
MANAGE. IN HIGH VOLUMETRIC
RATES. WE KNOW THAT RATES IN
CALIFORNIA ARE TOO HIGH, AND WE
NEED TO LOOK AT SOLUTIONS WHAT
WE WERE TALKING ABOUT TODAY TO
HELP REDUCE THOSE RATES AND AS
WE'RE THINKING ABOUT THE
AFFORDABILITY CHALLENGES IT'S
CAUSING. TODAY IT'S ALL IT'S
ALSO CREATING A DISINCENTIVE FOR
US TO ELECTRIFY THOSE
TECHNOLOGIES THAT WE'RE GONNA
NEED TO IMPLEMENT AND ACTUALLY
GO FASTER THAN WE'VE HAD OVER
THE LAST SEVERAL DECADES TO MEET
OUR CLIMATE GOALS. SO AS WE
THINK ABOUT HOW HOW CAN WE DO
THIS AND PUTTING LOOKING IT
THROUGH THE UTILITY LENS? I
THINK FIRST AND FOREMOST, WE
HAVE TO CONTINUE TO ENSURE WE'RE
OPERATING AS EFFICIENTLY
EFFECTIVELY AS POSSIBLE. YOU'LL
SEE ON THE NEXT SLIDE. THE AUTO
REPORT ACTUALLY LOOKED AT THE
OPERATING COSTS OVER THE LAST
FEW GENERAL RAPE CASE CYCLES AND
YOU COULD SEE THAT, UM OVER THE
LAST 9 TO 10 YEARS. THOSE 38 Kò
CYCLES. WE'VE GONE UP ABOUT 6%
PER YEAR. EXCUSE ME, 6% TOTAL
LITTLE UNDER 1% PER YEAR ON
AVERAGE ON OPERATING COST, BUT
WE NEED TO CONTINUE TO DO BETTER
LEVERAGING THINGS LIKE
AUTOMATION AND OTHER
TECHNOLOGIES TO CONTINUE TO HELP
. UH, MAKE SURE WE'RE PROVIDING
SAFE AND AFFORDABLE SERVICE. I
THINK NEXT. WE TALKED A LITTLE
BIT ABOUT THAT. BUT SUPPORTING
RESIDENTIAL RATE REFORM TO HELP
PROVIDE ADDITIONAL BILL.
STABILITY UH, AND AVOID THOSE,
UH, PRICE SPIKES THAT WE SEE, UH
IN THE SUMMER MONTHS WHEN, WHEN,
UM, USAGE DOUBLES DUE TO AIR
CONDITIONING LOAD. PURSUING
SECURITIZATION OF SOME OF THESE
WILDFIRE COSTS TO HELP EXTEND
THE REPAYMENT OF THOSE COSTS AND
AVOID SOME OF THE BILL SHOCKS
FOR OUR CUSTOMERS AND REALLY
HAVE SOME BENEFITS FOR OUR LOW
INCOME CUSTOMERS AS WELL,
CONTINUING THE DISCUSSIONS. I
KNOW THE LAST FEW YEARS WE
SPONSORED LEGISLATION AROUND
LOOKING AT PPP THOSE PUBLIC
PURPOSE PROGRAM COST AND
POTENTIALLY TAKING THOSE OUT OF
RATES. UH LAST YEAR, UH, THOSE
WERE NEARLY $500 MILLION WORTH
OF COST IN OUR RATES. UH, TAKING
THOSE OUT WOULD HAVE SAVED OUR
ANNUAL CUSTOMER ABOUT $120 OR SO
A YEAR. SO A REAL COST SAVING SO
AGAIN. I KNOW, UM THAT HAD BEEN
HELD IN APPROPRIATIONS THE LAST
FEW YEARS, AND I THINK IT'S
STILL WORTHWHILE GOING THROUGH
AND LOOKING AT, YOU KNOW, MAYBE
TAKING A MORE SORT OF THOUGHTFUL
APPROACH IN LOOKING AT SOME OF
THE PROGRAMS THAT ARE LISTED ON
ON THAT SLIDE THAT POTENTIALLY
ARE NOW NÓ LONGER, EFFECTIVE AND
POTENTIALLY NEED TO BE SUNSET OR
OR PULLED OUT OF RATES. AND LAST
, BUT NOT LEAST, YOU KNOW,
WANTING TO LOOK AT OTHER DOLLARS
AVAILABLE, UH, FEDERAL DOLLARS
SUCH AS I èC IIJ A. WE APPLIED
FOR $100 MILLION OF WILDFIRE
COST RECOVERY, UH, IN TRIBAL
LAND SO AGAIN, LOOKING AT ALL
FUNDS AVAILABLE BECAUSE WE KNOW
THERE'S A LOT TO DO AND IT CAN'T
ALL BE DONE ON THE BACKS OF OUR
RATEPAYERS. IN THE LAST SLIDE,
UH, ONE TO HIGHLIGHT AGAIN, UH,
FROM THE AUDIT REPORT. UH, I
TALKED A LITTLE BIT ABOUT THE Ó
AND M ALREADY. BUT JUST LOOKING
AT, UH THE OTHER REPORT
HIGHLIGHTED A LOT OF THE THINGS
WE'VE BEEN SAYING OVER THE LAST
SEVERAL YEARS OF THINGS THAT ARE
CAUSING UPWARD PRESSURE ON RATES
THAN ENERGY METERING. WILDFIRE
COST COST OF NATURAL GAS. THESE
PUBLIC PURPOSE PROGRAM COSTS, UM
DECLINING SALES, SO AGAIN REALLY
APPRECIATE APPRECIATIVE OF THE
AUDITOR, AND THE WORK THAT
THEY'VE DONE ON THAT. SO THANK
YOU FOR THE TIME AND I
DEFINITELY LOOK FORWARD TO YOUR
QUESTIONS AND DISCUSSION.
ALRIGHT. AND WE WILL, UH, HEAR
FROM OUR OTHER TWO PANELISTS AND
THEN COME BACK TO YOU FOR
QUESTIONS. BUT I, I DO WANT YOU
TO ADDRESS THE QUESTION THAT'S
ALREADY BEEN ASKED, UM HOW DO
YOU JUSTIFY SKYROCKETING RATES
ALONGSIDE RECORD PROFITS? WOULD
YOU LIKE ME TO DO IT NOW? OK SO
AFFORDABILITY, AS I SAID,
REMAINS CONTINUES TO BE TOP OF
MIND. WE KNOW THAT WITH THE COST
OF GOODS AND SERVICES GOING UP
ACROSS THE BOARD, UH, GASOLINE,
GROCERIES, HOUSING, EVERYTHING
IS BECOMING MORE EXPENSIVE,
ESPECIALLY IN SAN DIEGO, WHICH
IS ONE OF THE MOST EXPENSIVE
PLACES TO LIVE. UH, SO MAKING
SURE OUR CUSTOMERS ARE HEARING
FROM US EARLY AND OFTEN ABOUT
THOSE RATE CHANGES AND SO THAT
THEY CAN UM, PLAN ACCORDINGLY IS
IMPORTANT, MAKING SURE THEY ARE
TAKING ADVANTAGE OF THE LOW
INCOME PROGRAMS THE, UH,
NEIGHBOR TO NEIGHBOR PROGRAM
THAT WE'RE ABLE TO DOUBLE LAST
YEAR, MAKING SURE THAT THEY ARE
AWARE OF ALL THOSE IS EXTREMELY
IMPORTANT. BUT BUT LOOKING AT
WHAT OUR RESPONSIBILITY IS AS
WELL FOR OUR RATEPAYERS IS
CONTINUING TO MAKE SURE THEY ARE
HAVING SAFE AND RELIABLE SERVICE
FOR OUR CUSTOMERS, AND THAT
REQUIRES CONTINUED INVESTMENT IN
OUR SYSTEM. I'M VERY PROUD OF
THE FACT THAT WE HAVEN'T HAD A
WILDFIRE IN IN OVER 16 YEARS.
I'M PROUD OF THE FACT THAT WE'VE
HAD THE MOST RELIABLE ELECTRIC
UTILITY, UH OVER THE LAST 18
YEARS. SO CONTINUE TO MAKE THAT
INVESTMENT, UM IN ENSURING THAT
WE'RE HAVING A FINANCIALLY
HEALTHY UTILITY ALSO HELPS
ATTRACT THAT CAPITAL NEEDED AT
THE LOWEST COST TO BE ABLE TO
INVEST IN THAT IN THAT
INFRASTRUCTURE THAT IS NEEDED
FOR OUR CUSTOMERS NOT ONLY TO
MAINTAIN THEIR SAFETY BUT ALSO
TO MAINTAIN THE CLIMATE POLICIES
THAT WE ALL NEED. AS WE WORK
TOWARDS OUR GOALS OF 2045. GOT
IT. AND UM, I THINK YOU KNOW, I
CERTAINLY RECOGNIZE I THINK YOU
KNOW, WE ALL CERTAINLY RECOGNIZE
THAT UTILITIES NEED TO, UH, HAVE
A GOOD RATE OF RETURN IN ORDER
TO ATTRACT THAT INVESTMENT AND
CERTAINLY IN ORDER TO ATTRACT
THAT INVESTMENT AT A REASONABLE
RATE. I THINK THAT, UM PROFITS
THAT GO UP AND THIS WAS YOU. I
THINK IT WAS SOMEONE ELSE
PROFITS THAT GO 79% OVER A TWO
YEAR PERIOD. REALLY? UM SEEMS
EXCESSIVE AND I DON'T YOU KNOW,
I WOULD JUST OFFER THAT, UM,
CAUSE I THINK AS WE LOOK AT WAYS
TO DECREASE RATES WE DON'T WANNA
GET IN A SITUATION WHERE YOU
HAVE ARE, YOU KNOW CUSTOMERS
ACCUSING YOU OF PRICE GOUGING,
UM, IN ORDER TO MAKE RECORD
PROFITS, CUZ, THEN WE END UP IN
A SITUATION THAT, UM IS DAMAGING
FOR EVERYONE AND UNRAVELS VERY
QUICKLY. NÓ. I APPRECIATE THE
COMMENT AND YOU KNOW, AGAIN,
SOMETHING THAT WE TAKE EXTREMELY
SERIOUS AND AFFORDABILITY IS TOP
OF MIND BECAUSE WE KNOW OUR
CUSTOMERS ARE STRUGGLING. OK
THANK YOU. UM AND YEAH, WE'LL
COME BACK FOR MORE QUESTIONS
FROM THE COMMITTEE AND WE'RE
GOING TO TURN TO, UH MATTHEW
FRIEDMAN, WHO IS JOINING US FROM
THE UTILITY REFORM NETWORK.
THANK YOU FOR BEING HERE. THANK
YOU, MADAM CHAIR MEMBERS OF THE
COMMITTEE. UM MY NAME IS MATT
FRIEDMAN. I'M A STAFF ATTORNEY
WITH THE UTILITY REFORM NETWORK
OR TURN FOR 50 YEARS TURN, HAS
BEEN FIGHTING FOR LOWER BILLS
AND RATES TO HOLD UTILITIES
ACCOUNTABLE AND TO PROTECT
CONSUMERS. AND FOR THE LAST 25
YEARS I'VE BEEN EMPLOYED BY TURN
FIGHTING IN THE TRENCHES BOTH AT
THE PU èC. AND HERE IN THIS
BUILDING, UM, ON THESE VERY SAME
ISSUES. UM MY FIRST SLIDE THAT
I'D LIKE TO TAKE A LOOK AT LOOKS
VERY SIMILAR TO MANY OF THE
SLIDES. YOU'VE SEEN WHAT'S
DIFFERENT ABOUT MY SLIDE. YOU
HAVEN'T SEEN ALREADY THAT SHOWS
HISTORIC RATES. THESE ARE THE
UNCOUNTED RESIDENTIAL RATES. SO
WHAT YOU'VE BEEN SEEING IN THE
OTHER SLIDES ARE BLENDED AVERAGE
RATES. THIS IS THE RATE THAT
CUSTOMERS THAT ARE NOT
RESIDENTIAL CUSTOMERS NOT ON THE
CARE DISCOUNT PROGRAM ARE
LOOKING AT, UM AND THE TRENDS
GET A LITTLE BIT MORE STARK.
I'LL JUST POINT OUT A COUPLE
THINGS WHICH WILL REINFORCE
EVERYTHING YOU'VE ALREADY HEARD
TODAY. UM PG AND E. SINCE 2019
FOR THESE CUSTOMERS, RATES HAVE
MORE THAN DOUBLED. SINCE 2022 UP
53% LAST YEAR ALONE, A 30 3%
RATE INCREASE IN A SINGLE YEAR.
TRENDS ARE SCARY. THEY'RE
UNACCEPTABLE. UM AND WE NEED TO
DO THINGS DIFFERENTLY TO BEND
THAT CURVE AND I AGREE WITH THE
OTHER PANELISTS REGARDING THE
DRIVERS OF SPENDING, BUT WE HAVE
A COUPLE OTHER IDEAS ABOUT
THINGS WE MIGHT DO TO HAVE
DIFFERENT RESULTS IN THE FUTURE.
SO NEXT SLIDE, PLEASE. THIS
SHOWS THE PERCENT OF CUSTOMERS
THAT ARE IN ARREARAGES ON PAYING
THEIR BILL BASICALLY LATE IN
PAYING THEIR BILL THAT ARE
RUNNING UP BALANCES WITH THE
UTILITY. AND YOU HEARD, I THINK
ONE OF THE, UH, PRESENTERS
MENTIONED THAT ONE IN FIVE
CUSTOMERS ARE BEHIND ON THEIR
BILLS. BUT IF YOU LOOK AT LOW
INCOME CUSTOMERS, IT'S MORE LIKE
ONE IN THREE UM, AND THE TOTAL
AMOUNT OF ARREARAGES UM I LOOKED
AT THE LATEST DATA. THIS IS FROM
JANUARY OF 2024, WHICH IS PRETTY
RECENT IS ONE IN ONE AND THREE
QUARTER BILLION DOLLARS. FOR THE
THREE I Ó U S¼. THAT'S THE
AMOUNT THAT PEOPLE ARE BEHIND ON
THEIR BILLS. AND OF THAT AMOUNT
A LITTLE OVER 40% IS OWED BY LOW
INCOME CARE CUSTOMERS. UM AND
LOW INCOME CUSTOMERS ARE MUCH
MORE LIKELY TO BE LAID ON THEIR
BILLS THAN NON LOW INCOME
CUSTOMERS. THAT'S WHAT THIS
CHART SHOWS NEXT SLIDE, PLEASE.
ONE OF THE PHENOMENA THAT HASN'T
REALLY GOTTEN MUCH ATTENTION IS
THE DIFFERENCE BETWEEN CUSTOMERS
WHO LIVE IN COASTAL AREAS VERSUS
INLAND AREAS. THIS CHART SHOWS
AVERAGE BILLS FOR A CARE
CUSTOMER LIVING IN A COASTAL
ZONE VERSUS A HOT INLAND ZONE OF
THE THREE MAJOR INVESTOR OWNED
UTILITIES. SO WHAT YOU NOTICE IS
PRETTY STARK, WHICH IS IN THE
SUMMER TIME LOW INCOME CUSTOMERS
LIVING IN HOT AREAS ARE PAYING
BILLS THAT SOMETIMES ARE 3 TO 4
TIMES. THE BILL OF THEIR
COUNTERPARTS LIVING IN A COASTAL
ZONE. I GUESS THIS ISN'T
SURPRISING, BUT WE DON'T TALK
ABOUT IT MUCH, UM, AND WHY IT
MATTERS IS BECAUSE CUSTOMERS IN
HOT INLAND AREAS ARE FACING MUCH
LARGER BURDENS IN TERMS OF THE
BILLS THAT THEY PAY, AND THEY'RE
ALSO MUCH MORE SUSCEPTIBLE TO
BILL SPIKES. WHEN THERE ARE HEAT
WAVES COMING THROUGH. UM SO
THESE CORRELATIONS ARE ALSO
SIMILAR FOR NON CARE CUSTOMERS.
UM BUT THE CARE CUSTOMER EXAMPLE
IS STARK. AND OF COURSE, THE
REASON THAT WE'RE SEEING HIGH
SUMMER BILLS IS AIR
CONDITIONING. NOW HIS AIR
CONDITIONING A LUXURY. IS IT A
WASTEFUL USE OF ELECTRICITY WHEN
IT'S OVER 100 DEGREES OUTSIDE. I
DON'T THINK SO. I THINK IT'S A
LIFE OF IT'S A NECESSITY.
BASICALLY IT'S A BASIC HUMAN
RIGHT FOR PEOPLE TO BE ABLE TO
HAVE, UH, A BE ABLE TO HAVE A
COMFORTABLE INTERIOR SPACE THAT
SUPPORTS THEIR ABILITY TO LIVE.
AND SO WE NEED TO THINK ABOUT
HOW ALL OF OUR CHOICES AFFECT
CUSTOMERS IN THE HOT ZONES, WHO
TYPICALLY PAY HIGHER AVERAGE
BILLS AND SPECIFICALLY, MUCH
HIGHER BILLS IN THE SUMMERTIME.
SO NEXT SLIDE, PLEASE. THIS GETS
TO, UM, ANOTHER EXTREMELY
CONTROVERSIAL TOPIC, WHICH I
KNOW YOU'VE HEARD A LOT ABOUT
WHICH IS INCOME. GRADUATED
RESIDENTIAL FIXED CHARGES. WHY
WOULD WE DO THIS? WELL UM, I CAN
TELL YOU THAT, UM, MY
ORGANIZATION SPENT A LONG TIME,
UM, OPPOSING ANY RESIDENTIAL
FIXED CHARGE. AND IF YOU HAD
BEEN IN THIS EXACT SAME HEARING
ROOM ABOUT A DECADE AGO, YOU
WOULD HAVE PROBABLY SEEN ME A
LITTLE BIT YOUNGER, UM, MAKING
AN ARGUMENT AGAINST FIXED
CHARGES. UM, AND WE SPENT A LOT
OF TIME ARGUING AGAINST
RESIDENTIAL FIXED CHARGES HERE.
AT THE PU èC. UM SO WHY HAVE WE
CHANGED OUR VIEWS ON THIS? WHY
IS TURN IN A DIFFERENT POSTURE
TODAY THAN WE WERE 10 YEARS AGO.
WELL, IT'S BECAUSE OF CHANGED
CIRCUMSTANCES. THE WORLD IS VERY
DIFFERENT NOW THAN IT WAS BACK
IN 2012, OR 2013 RATES HAVE
SKYROCKETED. I DON'T NEED TO
MAKE THAT POINT ANYMORE. WE'VE
ALL TALKED ABOUT IT ALREADY. UM
AND EXISTING RATE LEVELS PROVIDE
PLENTY OF INCENTIVES FOR ENERGY
EFFICIENCY AND CONSERVATION. THE
TWO ISSUES THAT WE HAD THAT THAT
WERE REALLY DRIVING. OUR
OPPOSITION TO FIX CHARGES
HISTORICALLY WERE IMPACTS ON
ENERGY EFFICIENCY AND
CONSERVATION AND IMPACTS ON LOW
INCOME CUSTOMERS. WELL, RATES
ARE SO HIGH NOW I THINK WE'RE AT
PUNISH LEVELS. WE'RE NOT REALLY
CONCERNED THAT RATES AREN'T
PROVIDING ENOUGH OF AN INCENTIVE
FOR PEOPLE TO REDUCE THEIR USAGE
AND NONE OF THE FIXED CHARGE.
PROPOSALS UNDER CONSIDERATION
WOULD MATERIALLY CHANGE THAT
INCENTIVE. UM A DECADE AGO. OUR
TOP PRIORITIES WERE CONSERVATION
AND EFFICIENCY. TODAY WE'RE
TALKING ABOUT ELECTRIFICATION.
IT'S A TOTAL PARADIGM SHIFT.
WE'RE NOT TALKING ABOUT HOW TO
DESIGN A RATE STRUCTURE THAT IS
PLACING ITS TOP PRIORITY ON
REDUCING USAGE BUT DESIGNING A
RATE STRUCTURE THAT IS TRYING TO
RATIONALIZE THE WAY PEOPLE USE
ELECTRICITY AND TO PROMOTE
EFFICIENT ELECTRICITY USAGE,
INCLUDING SWITCHING FROM NATURAL
GAS AND GASOLINE TO ELECTRICITY.
ADDITIONALLY A MUCH GREATER
PORTION OF THE COSTS AND RATES
ARE NÓ LONGER TIED TO CUSTOMER
USAGE. AS YOU'VE HEARD, UM,
WE'RE SEEING A REAL DELINKING OF
WHAT THE UTILITIES ARE SPENDING
MONEY ON AND ANY RELATIONSHIP
BETWEEN HOW MUCH BETWEEN THAT
AND WHAT CUSTOMERS ARE USING. UM
AND THEN WE'VE SEEN DRAMATIC
GROWTH IN NET METERING, WHICH IS
ALSO BEEN DISCUSSED. I'LL ALSO
POINT OUT THAT THE DATA FOR 2023
SHOWS THAT IT WAS THE BIGGEST
YEAR ON RECORD FOR CUSTOMER
APPLICATIONS FOR ROOFTOP SOLAR.
UM APPLICATIONS WERE UP 32% IN
TERMS OF THE NUMBER OF CUSTOMERS
APPLYING IN 23. VERSUS 2022, SO
WE HAVE A VERY LARGE POPULATION
OF SOLAR CUSTOMERS, AND WE NEED
TO RATIONALIZE OUR RATE DESIGN
TO MAKE SURE THAT THE NEXT WAVE
OF ROOFTOP SOLAR AND STORAGE
ADOPTION DOESN'T DRIVE MUCH
HIGHER RATES FOR EVERYBODY ELSE,
AND WE NEED RATES THAT ARE GOING
TO ENCOURAGE AND ACCOMMODATE
MUCH HIGHER PENETRATION LEVELS
WITHOUT BREAKING THE BANK. AND
THEN FINALLY, WE HAVE AN
OPPORTUNITY NOW TO INCOME.
DIFFERENTIATE THESE CHARGES. WE
ALWAYS HAVE HAD INCOME
DIFFERENTIATED RATES. THERE'S A
LOT OF INCOME DIFFERENTIATION IN
THE WAY PEOPLE PAY FOR SERVICES
IN A PLACE LIKE CALIFORNIA, SO
IT'S AN OPPORTUNITY TO LOOK AT
HOW WE FAIRLY SPREAD THE BURDEN
FOR SOME OF THESE SOCIAL POLICY
AND FIXED GRID COSTS. THAT
REALLY AREN'T RELATED TO USAGE.
UM WE ALSO THINK THAT AN INCOME
GRADUATED FIXED CHARGE CAN
PROMOTE EQUITY BY REDUCING BILLS
FOR LOW INCOME CUSTOMERS
PROMOTING ELECTRIFICATION, UM
AND BETTER WHINING. THE USAGE
RATES THAT ARE THAT ARE
APPLICABLE WITH THE ACTUAL COSTS
THAT ARE INCURRED TO SERVE THAT
CUSTOMER. FINALLY I'LL JUST SAY
THIS THE FIXED CHARGE. CONTRARY
TO WHAT YOU MIGHT HAVE HEARD.
IT'S NOT A TAX AND IT DOESN'T
HAVE ANY IMPACT ON UTILITY
PROFITS. IT IS NOT A VEHICLE TO
INCREASE THE AMOUNT OF MONEY THE
UTILITIES GET TO COLLECT. IF IT
WAS ANY OF THOSE THREE THINGS WE
WOULD BE DEAD SET OPPOSED TO
THIS PROPOSAL. UM AND SO WITH
THE OTHER CONSUMER GROUPS, SO
YOU NEED TO UNDERSTAND THAT RATE
DESIGN IS A ZERO SUM GAME YOU
GIVE TO ONE CUSTOMER YOU TAKE
FROM ANOTHER CUSTOMER. YOU TAKE
MONEY OUT OF A FIXED CHARGE, AND
IT BECOMES A REDUCTION IN BASED
RATES. NEXT SLIDE, PLEASE. SO
WHAT OTHER AFFORDABILITY
PROPOSALS DO WE HAVE? WELL, WE
HAVE A PACKAGE OF IDEAS. A
RATEPAYER RELIEF ACT. UM, THAT
WOULD HAVE A SEVERAL COMPONENTS
FIRST. UM WE WANT UTILITIES TO
IDENTIFY, APPLY FOR AND INCLUDE
NON RATEPAYER FUNDING STREAMS IN
THEIR SPENDING PLANS. THIS SOUND
FAMILIAR. YOU'RE HEARING IT FROM
MULTIPLE PEOPLE TODAY, UM, TO BE
ABLE TO FIND OTHER WAYS TO
FINANCE, WILDFIRE MITIGATION AND
CLIMATE INITIATIVES. SECOND WE
WANT TO MAKE SURE UTILITIES ARE
REQUIRED TO USE THE MOST COST
EFFECTIVE MEASURES TO ACHIEVE
THE GREATEST GRID BENEFITS AT
LOWEST COST. COST TO RATEPAYERS.
UM THE UTILITIES ARE NOT
MOTIVATED TO FIND THE LEAST COST
SOLUTIONS. THIS IS THE NOT SO
TUR NOT SO SECRET TRUTH RIGHT
UTILITIES ARE MOTIVATED. THEIR
PRIMARY BUSINESS IS TO INCREASE
THEIR PROFITS FOR THEIR
SHAREHOLDERS, AND THAT IS A
RESULT OF INCREASED CAPITAL
INVESTMENT IN RATE BASED ASSETS
ON THEIR SYSTEM. SO WHEN THERE'S
A CHOICE BETWEEN A CHEAPER
ALTERNATIVE AND A MORE EXPENSIVE
ALTERNATIVE THAT INVOLVES HIGHER
UTILITY CAPITAL INVESTMENT, THE
UTILITIES ALMOST ALWAYS CHOOSE
THE HIGHER COST ONE. WE NEED TO
FORCE THEM TO MAKE DIFFERENT
CHOICES. THIRD WE NEED TO
ESTABLISH BENCHMARKS BASED ON
THE EXISTING PU èC BILL
AFFORDABILITY METRICS THAT ARE
INTEGRATED INTO THE EVALUATION
OF UTILITY SPENDING PLANS. UM
WHEN A SPENDING PLAN IS SIMPLY
GOING TO BREAK THE BANK AND
BECOME UNAFFORDABLE THAT NEEDS
TO BE SOMETHING THAT THE PU èC
ACTUALLY USES TO MAKE A DECISION
NOT SIMPLY TAKES NOTE OF WHEN
THEY MAKE THEIR DECISION, WHICH
IS WHAT IT HAPPENS TODAY. UM AND
IF THAT DOESN'T WORK, WE SUPPORT
A CAP ON FUTURE RATE INCREASES
THAT WOULD BE TIED TO THE SOCIAL
SECURITY COST OF LIVING
ADJUSTMENT. MIGHT SOUND RADICAL,
BUT MAYBE RADICAL SOLUTIONS ARE
WHAT ARE NEEDED. UM THE SECOND
CATEGORY IS USING EXTERNAL
FUNDING TO REDUCE RATES. AND WE
TALKED ABOUT THAT, TOO. UM, WE,
UM, WERE SUPPORTIVE OF THE
CLIMATE EQUITY TRUST PROPOSAL
THAT WAS IN SENATOR LAIRD'S BILL
TWO YEARS AGO. S¼ B 120. WE'RE
HOPING IT'S GOING TO MAKE A
RESER. UH, IT'S GOING TO MAKE A
REAPPEARANCE THIS YEAR. IT'S A
LONG TERM MECHANISM AND
STRUCTURE FOR CHANNELING SOURCES
OF EXTERNAL FUNDING TO COVER
COSTS UNRELATED TO THE PROVISION
OF ELECTRICITY SERVICES THAT
WOULD OTHERWISE BE RECOVERED IN
RATES. UM SOURCES OF MONEY, UH,
CAP AND TRADE FUNDS CLIMATE BOND
IF WE IF WE COME UP WITH ONE AND
FEDERAL SUPPORT AS WELL, UM, THE
NEXT CATEGORY IS ALTERNATIVE
FINANCING AND OWNERSHIP OPTIONS.
THERE'S BEEN A LOT OF TALK. I'M
VERY HAPPY TO SEE EVERYBODY
TALKING ABOUT FINANCING HERE.
IT'S A NOT A VERY EXCITING TOPIC
NORMALLY. UM, BUT THE THING TO
UNDERSTAND IS THAT UTILITIES ARE
A VERY EXPENSIVE WAY TO FINANCE
INVESTMENTS IN INFRASTRUCTURE.
UM EVERYBODY KNOWS THAT INTEREST
RATES ALSO HAVE GONE UP. UM, IF
YOU'VE TAKEN OUT A HOME MORTGAGE
RECENTLY, UM, YOU'VE NOTICE
THOSE RATES HAVE SKYROCKETED.
THAT'S ALSO TRUE. FOR A VARIETY
OF INFRASTRUCTURE INVESTMENTS
THAT WE'RE SEEING. AND THAT'S
WHY THERE WAS, UH, I THINK ONE
OF THE PANELISTS TALKED ABOUT
THE FACT THAT THESE HIGHER COSTS
ARE DRIVING UP RATES FOR CLEAN
ENERGY PROJECTS. THIS IS OF
CONCERN. WE NEED TO THINK ABOUT
WAYS TO MAKE, UM AVAILABLE LOW
INTEREST FINANCING THAT TAKES
AVA THAT TAKES ADVANTAGE OF THE
STATE'S BORROWING CAPACITY AND
ITS ABILITY TO ISSUE TAX EXEMPT
DEBT, UM, TO PROVIDE MEANINGFUL
REDUCTIONS IN THE COST PAID BY
RATEPAYERS. AND JUST LET ME GIVE
YOU AN EXAMPLE. UM IF YOU
SUBSTITUTED THE STATE'S COST OF
DEBT FOR WHAT IT COST THE
UTILITY TO INVEST IN, SAY, A
LARGE TRANSMISSION PROJECT. WHAT
WOULD BE THE SAVINGS TO
RATEPAYERS JUST FROM THAT
SAVINGS IN THE FINANCING COST,
ASSUMING THE STATE DIDN'T KICK
IN $1 OF SUBSIDY, BUT JUST WE
PIGGYBACKED ON THE STATE'S LOWER
COST OF BORROWING. IT'S ABOUT A
30% SAVINGS TO RATEPAYERS. NET
NET. NOT ON THE COST OF CAPITAL,
BUT ON THE TOTAL MONEY THAT
CUSTOMERS WOULD PAY OVER TIME.
THERE ARE HUGE SAVINGS. ONE
THING THAT PEOPLE ALSO DON'T
KNOW IS THAT WHEN THE UTILITIES
COLLECT A DOLLAR IN PROFIT THAT
IS AUTHORIZED BY THE PU èC,
THEY COLLECT AN ADDITIONAL
USUALLY 40 TO 50 CENTS ON TOP OF
THAT DOLLAR TO PAY FOR THE TAXES
ON THEIR PROFIT, SO TO GIVE THE
UTILITY A DOLLAR FOR PG AND E,
FOR EXAMPLE, YOU HAVE TO GIVE.
UH YOU HAVE TO PAY A DOLLAR 42
TO GET A DOLLAR INTO PG AND E
SHAREHOLDERS' POCKETS. THERE'S A
CHEAPER WAY AND WE NEED TO THINK
ABOUT OPTIONS FOR USING STATE
FINANCING THAT WOULD NOT PUT
TAXPAYERS ON THE HOOK BUT COULD
TAKE ADVANTAGE OF THE STATE'S
CAPACITY. TO GET MONEY AT A
CHEAPER RATE, GIVEN THE HUGE
AMOUNT OF INVESTMENT THAT'S
NEEDED IN THIS SYSTEM. UM AND
EVEN A MORE AMBITIOUS PROPOSAL,
SENATOR BECKER HAD A BILL S¼ B
1032 BACK IN 2022 TO ESTABLISH
AN INFRASTRUCTURE AUTHORITY
WHERE THE STATE COULD FINANCE
AND OWN SOME OF THESE ASSETS AT
ITS MUCH LOWER COST OF CAPITAL.
UM, FINALLY, UM LOW INCOME
CUSTOMER BILL RELIEF. I TALKED
ABOUT THE INCOME GRADUATED FIXED
CHARGE, WHICH, BY THE WAY, WOULD
PRODUCE LOWER BILLS FOR LOW
INCOME CUSTOMERS ACROSS THE
STATE. UM, WE ALSO WERE
INTERESTED IN LOOKING AT
INCREASING THE DISCOUNT FOR CARE
CUSTOMERS OF GAS. UH COMPANIES,
SO NATURAL GAS SERVICE RIGHT NOW
. THAT DISCOUNT IS 20% WE THINK
IT COULD BE INCREASED TO MATCH
THE 30 TO 35% DISCOUNT THAT'S ON
THE ELECTRIC SIDE. UM THERE'S
ALSO I'LL JUST PUT IN A PLUG FOR
COMMUNITY SOLAR IMPLEMENTATION.
ONE OF YOUR COLLEAGUES, ASSEMBLY
MEMBER WARD HAD A GREAT BILL
THAT WE SUPPORTED LAST YEAR A B
20 THREE 16 TO MAKE AVAILABLE
LOW COST COMMUNITY SHARED SOLAR.
UM, WHICH WOULD BE MUCH CHEAPER
THAN ROOFTOP SOLAR. UM
UNFORTUNATELY, THE PUC ISSUED A
PROPOSED DECISION JUST ON MONDAY
THAT ESSENTIALLY GUTS THAT BILL
AND DECLINES TO IMPLEMENT IT AND
WOULD INSTEAD ADOPT A PRETTY
MEANINGLESS ALTERNATIVE PROGRAM.
SO THAT'S A PRETTY DISAPPOINTING
OUTCOME. UM, A BUNCH OF US ARE
NOT DONE FIGHTING ON THAT. BUT
THAT'S A MISSED OPPORTUNITY AND
THEN FINALLY STRENGTHENING
DISCONNECTION PROTECTIONS FOR
CUSTOMERS WHO ARE BEHIND ON
THEIR BILLS. SO I JUST PUT OUT A
LARGE MENU. IF FOLKS ARE
INTERESTED, WE'RE HAPPY TO TALK
MORE ABOUT THIS, AND I
APPRECIATE THE OPPORTUNITY TO
SHARE SOME OF MY THOUGHTS TODAY.
WONDERFUL THANK YOU. YES I THINK
WE APPRECIATE THE LARGE MENU.
LET'S GET, UM AND I'LL I'LL NOTE
IT'S FOUR, WHICH WAS THE
OFFICIAL I THINK PUBLISHED ANY
TIME OF OUR HEARING. WE ARE
GOING TO, UM, TO CARRY ON. I
KNOW THAT THERE'S A NUMBER OF
QUESTIONS THAT I AND OTHER
COMMITTEE MEMBERS HAVE. SO
HOPEFULLY OUR PANELISTS ARE ABLE
TO STICK AROUND. UM WITH THAT
WE'LL HEAR FROM STEPHANIE DOYLE,
WHO IS THE CALIFORNIA STATE
AFFAIRS DIRECTOR FOR THE SOLAR
ENERGY INDUSTRIES ASSOCIATION.
THANK YOU CHAIR AND THANK YOU
MEMBERS. I WILL TRY TO BE QUICK
WITH MY COMMENTS. WE CAN GET TO
QUESTIONS. UH, THANKS FOR
INVITING ME TO SPEAK TODAY ON
THE FUTURE TRENDS AND
OPPORTUNITIES. CALIFORNIA HAS TO
ADDRESS ITS AFFORDABILITY ISSUES
. I'M STEPHANIE DOYLE. I'M THE
CALIFORNIA DIRECTOR FOR THE
SOLAR ENERGY INDUSTRIES
ASSOCIATION, WHERE THE NATIONAL
TRADE ASSOCIATION FOR THE SOLAR
AND STORAGE INDUSTRY
REPRESENTING OVER 1200 COMPANIES
FROM UTILITY SCALE. DISTRIBUTED
GENERATION MANUFACTURING,
RECYCLING AND EVERYTHING IN
BETWEEN. UM SO SOLAR AND STORAGE
CAN AND DOES CONTRIBUTE TO
AFFORDABILITY, PROVIDED OUR
STATE REDUCES BARRIERS TO
DEPLOYMENT AND INCENTIVIZES
TECHNOLOGY AND RATES ALONGSIDE
TO ENSURE PROJECTS PROVIDE THE
MOST BENEFIT TO THE GRID. THE
STATE OF CALIFORNIA IN ITS MOST
RECENT PREFERRED, UH, SYSTEM
PLAN, AS PART OF THE INTEGRATED
RESOURCES PLAN SHOWS THAT 14.8
GIGAWATTS OF SOLAR BY 2030 57.5
GIGAWATTS BY 2045. ARE NEEDED TO
MEET OUR CLEAN ENERGY GOALS. TO
DO THIS. WE'RE GONNA NEED A
DIVERSE PORTFOLIO OF SOLAR
RESOURCES, INCLUDING UTILITY
SCALE COMMUNITY AND ROOFTOP
DIVERSITY OF THE MARKET WILL
HELP REDUCE COSTS BY ALLOWING
THE RIGHT RESOURCE TO BE APPLIED
TO THE RIGHT NEED. WITH PASSAGE
OF THE INFLATION REDUCTION ACT.
THE STATE ALSO HAS BILLIONS OF
DOLLARS IN FUNDING AVAILABLE TO
TAP IN DUE TO REDUCED COSTS. WE
CAN ACHIEVE OUR GOALS AND KEEP
COSTS DOWN, BUT WE WILL NEED TO
FIX THE WAY WE PLAN AND DEPLOY
THE TECHNOLOGY PROCESSES AND
RATE DESIGN TO DO SO. NEXT
SLIDE, PLEASE. UM SO, HOWEVER
CLEAN ENERGY DEPLOYMENT, UH,
CANNOT PROVIDE BENEFITS TO
REPAIRS IF THE GRID AND THE GRID
IF IT CANNOT BE DEPLOYED IN A
COST EFFECTIVE WAY. CALIFORNIA
IS CURRENTLY FACING EXTREME
TIMELINE. DELAYS FOR PROJECTS
FROM UTILITY SCALE ALL THE WAY
DOWN TO RESIDENTIAL SYSTEMS ON
THE UTILITY SCALE SIDE PROJECTS
CONTINUE TO FACE DELAYS DUE TO
LONG INTERCONNECTION QUEUES AND
NEW AND UPGRADED TRANSMISSION
LAGGING FAR BEHIND OUR NEEDED
CAPACITY FOR CLEAN ENERGY
PROJECTS, TIME EQUALS RISK
EQUALS MONEY AND INCREASINGLY
DIFFICULT TIMELINES UPWARDS OF 8
TO 10. IN SOME CASES ARE
CREATING A BACKLOG OF DELAYS AND
CANCELLATIONS OF PROJECTS. WE
CAN ADDRESS THESE LONG TIME
LINES WITH GRID ENHANCING
TECHNOLOGIES, IMPROVING
INTERCONNECTION PROCESSES AND
ENSURING PERMITTING AND SING
HAPPEN ON REASONABLE TIMELINES
THAT PROVIDE CERTAINTY TO
DEVELOPERS AND FINANCIERS. ON
THE RESIDENTIAL AND COMMERCIAL
SIDE THROUGH S¼ B 410
LEGISLATION THAT WAS PASSED LAST
YEAR. WE HOPE TO SEE REASONABLE,
ENERGIZING TIMELINES THAT HOLD
THE I Ó U S¼ ACCOUNTABLE WHEN
THOSE TIMELINES ARE NOT MET,
ENABLING MORE LOAD TO CONNECT TO
THE GRID WILL HELP SPREAD THE
COST FOR RATEPAYERS AND PUT
DOWNWARD PRESSURE ON OUR RATES.
NEXT SLIDE, PLEASE. ANOTHER
OPPORTUNITY FOR REDUCTION IN
COST RATE PAIRS COMES FROM
BROADENING THE MARKET ACROSS THE
WEST CALIFORNIA PARTICIPATES IN
THE WESTERN ENERGY IMBALANCE
MARKET, WHICH HAS ALREADY
REDUCED COSTS FOR CALIFORNIA BY
$888 MILLION SINCE 2014 BASED ON
THE SUCCESS OF THE WEIM, THE
EXTENDED DAY AHEAD MARKET WAS
CREATED TO BE A VOLUNTARY DAY
AHEAD ELECTRICITY MARKET
DESIGNED TO DELIVER SIGNIFICANT
RELIABILITY, ECONOMIC AND
ENVIRONMENTAL BENEFITS,
CONTINUING ON THOSE PROVEN
MODELS SUPPORTING A WESTERN. I
S¼ Ó WILL ENABLE EVEN MORE
EFFICIENCY AND SHARING OF
RESOURCES AND REDUCED COSTS BY
ELIMINATING REDUNDANCIES IN
NEEDED CAPACITY AND TRANSMISSION
ACROSS OUR NEIGHBORING STATES.
NEXT SLIDE, PLEASE. AND THEN ON
THE DISTRIBUTED RESOURCES SIDE,
THE CONTINUED GROWTH OF VIRTUAL
POWER PLANTS AND DEMAND RESPONSE
PROGRAMS THAT PAY CUSTOMERS
DIRECTLY FOR REDUCING ENERGY USE
WHEN THE GRID IS CONSTRAINED CAN
REDUCE COST FOR RATEPAYERS BY
TAPPING INTO CUSTOMER INVESTMENT
AND REDUCING PRESSURE ON PEAK
LOAD A LEADING DRIVER FOR
INCREASED RATES BY UTILITIES. B
P'S USE SOFTWARE TO AGGREGATE
THE OUTPUT OF HUNDREDS OR
THOUSANDS OF SMALL SCALE SOLAR
AND BATTERY SYSTEMS TO ACT LIKE
POWER PLANTS AND CAN DEFER HIGH
COST UPGRADES AND CAPEX SUCH AS
GENERATION AND TRANSMISSION AND
DISTRIBUTION LINES. Dð PP S¼ CAN
ALSO BE SCALED UP QUICKLY, SINCE
THEY RELY ON ALREADY EXISTING
SYSTEMS ON THE GRID. CALIFORNIA
ALREADY HAS IN PLACE MANY
SMALLER PROGRAMS TO SUPPORT
THESE TYPES OF SYSTEMS. BUT BY
SCALING THESE UP, WE CAN REALLY
TAP INTO RESOURCES THAT ARE
ALREADY ON THE GRID, AGGREGATE
THEM AND LEVERAGE THEM TO REDUCE
FUTURE UTILITY ASSET BUILD OUT
THAT LEADS TO THOSE INCREASED
RATES. FINALLY LOAD FLEXIBILITY
WILL BE CRITICAL TO THE
SUCCESSFUL TRANSITION TO AN
ELECTORATE OF ECONOMY THAT HAS
RUN ON CLEAN ENERGY RESOURCES.
WE NEED TIME OF USE RATES,
DYNAMIC PRICING AND OTHER
FLEXIBLE RATE STRUCTURES READILY
AVAILABLE FOR CUSTOMERS IN ORDER
TO MEET NEW LOADS, RESPOND TO
SYSTEM CONDITIONS AND PROVIDE
RESILIENCE AND RELIABILITY TO
INDIVIDUAL CUSTOMERS AND THE
GRID. FLEXIBLE RATE STRUCTURES
CAN GO A LONG WAY IN ENCOURAGING
ELECTRIFICATION PROVIDED THEY
ARE COMPLEMENTED WITH UPFRONT
INCENTIVES FOR THOSE WHO CANNOT
AFFORD Dð ER S¼, AS WELL AS
PROTECTIONS FOR THOSE WHO CANNOT
RESPOND TO TIME OF USE RATES.
ENSURING THOSE WHO CAN MAKE THE
TRANSITION TO ELECTRIFY OR
INCENTIVIZED TO DO SO, WHILE
ALSO ENSURING THAT THOSE LEAST
ABLE TO AFFORD THE TRANSITION
ARE HELPED AND PROTECTED THROUGH
SPECIFIC RATE STRUCTURES, HIGH
UPFRONT INCENTIVES AND DIRECT
ASSISTANCE PROGRAMS ARE NEEDED.
OUR PROCESS IS TO APPROVE NEW
PROGRAMS AND RATES IN THE IOU
ARE NOTORIOUSLY SLOW AND ONCE
APPROVED, THEY'RE OFTEN SUBJECT
TO DELAYED IMPLEMENTATION BY THE
SAME IO IMPLEMENTING THESE RATE
STRUCTURES IN A THOUGHTFUL AND
TIMELY WAY CAN GO A LONG WAY TO
REDUCING OUR COSTS. I WOULD LIKE
TO CLOSE WITH A REMINDER THAT
SLOWING DOWN THE TRANSITION TO
RENEWABLES MEANS COMMUNITIES
LIVING NEAR DIRTY GAS SPEAKER
PLANTS WILL CONTINUE TO BE
EXPOSED TO HARMFUL AIR POLLUTION
AND CARBON DIOXIDE. WE NEED TO
ENSURE AFFORDABILITY AS WE MAKE
THIS TRANSITION, PARTICULARLY
FOR THOSE LEAST ABLE TO AFFORD
IT, BUT WE CANNOT FORGET THAT
SLOWING DOWN. DECARBONIZATION IS
ALSO NOT AN EQUITABLE SOLUTION.
KEEPING FOSSIL FUEL PLANTS
ONLINE IS ALREADY COSTING US
BILLIONS, BOTH DIRECTLY THROUGH
PAYMENTS TO UTILITIES TO KEEP
THEM RUNNING AND FROM THE
CLIMATE IMPACTS THEY CONTINUE TO
CAUSE. CALIFORNIA CANNOT AFFORD
TO IGNORE OUR AFFORDABILITY
CRISIS OR OUR CLIMATE CRISIS AND
SOLUTIONS EXIST FOR BOTH. THANK
YOU. ALL RIGHT WITH THAT. WE'LL
OPEN IT UP FOR ANOTHER ROUND OF
QUESTIONS FROM COMMITTEE
MEMBERS. SOME MEMBER TING THANKS
, MADAM CHAIR, SO I WANTED TO GO
BACK TO MR FRIEDMAN. UM YOU YOU
HAD TALKED ABOUT, UH FIXED
CHARGE. GIVE A SENSE OF HOW? HOW
LARGE OR WHAT KIND OF FIXED
CHARGE YOU WOULD BE. UH SORT OF
INTERESTED IN IT. AND I DON'T
KNOW MAYBE THIS THIS IS
OVERSIMPLIFYING IT, BUT IS THERE
A WAY TO, UH, WOULD THEY PUT PUT
IN YOUR MIND WITH THE FIXED
CHARGE APPLIED TO THE FIXED COST
THAT, UM UH, OUR SDG AND
REPRESENTATIVE TALKED ABOUT SURE
. UM THANK YOU FOR THE QUESTION.
I APPRECIATE IT. UM WELL TURN.
HèA HAS ITS OWN FIXED CHARGE
PROPOSAL IN THE PU èC
PROCEEDING. MOSTLY WHAT I THINK
MEMBERS HERE HAVE BEEN HEARING
ABOUT IS THE UTILITY PROPOSALS,
WHICH WE ARE NOT SUPPORTIVE OF,
UM, TURN HAS A PROPOSAL THAT WE
PARTNERED WITH THE NATURAL
RESOURCES DEFENSE COUNCIL, AND
OUR PROPOSAL IS VERY SIMILAR TO
WHAT THE PUBLIC ADVOCATES HAS
PUT INTO THE PRECEDING WHICH
WOULD BE A $5 CHARGE FOR LOW
INCOME CUSTOMERS AND A $30
CHARGE FOR NON LOW INCOME
CUSTOMERS. THAT'S WHERE WE
BELIEVE THE APPROPRIATE STARTING
POINT, IS IT IT ENDS UP WITH A
BLENDED COST OF ABOUT 20 THREE
50 A MONTH WHICH, BY THE WAY, IS
ABOUT THE SAME CHARGE THAT THE
SACRAMENTO MUNICIPAL UTILITY
DISTRICT HAS FOR ITS CUSTOMERS.
ITS FIXED CHARGE, UM THE UTILITY
CHARGES ARE ARE MUCH HIGHER
WE'RE ABOUT. WE'RE BASICALLY THE
TWEENER IN THE PRECEDING BETWEEN
THE UTILITIES AND THE SOLAR
INDUSTRY. UM SO WE THINK THAT'S
THE PART. THAT MAKES SENSE. UM,
IN TERMS OF THE COSTS THAT YOU
COLLECT. THROUGH THAT TYPE OF A
FIXED CHARGE OR SORT OF WHERE DO
YOU NEED THE LEVELS TO BE? I'LL
JUST GIVE YOU SOME BENCHMARKS.
IF YOU JUST WANNA COLLECT THE
COST OF A CUSTOMER CONNECTING TO
THE SYSTEM, MEANING LIKE THE
SERVICE DROP AND THE TRANSFORMER
AND THE METER, SO LITERALLY THE
HARDWARE THAT A CUSTOMER NEEDS
TO BE A CUSTOMER. YOU'RE AT
ABOUT 10 BUCKS RIGHT THERE A
MONTH IF YOU WANT TO INCLUDE
PUBLIC PURPOSE COSTS AND LOW
INCOME DISCOUNTS. YOU'RE IN THE
$20 TO $25 RANGE IF YOU WANT TO
INCLUDE A FRACTION OF
DISTRIBUTION COSTS. LET'S JUST
SAY 25% WHICH WOULD INCLUDE SOME
, BUT NOT ALL THE WILDFIRE COSTS
. YOU'RE IN THE MID $30 RANGE.
AND IF YOU WANNA GO TO INCLUDE
MORE OF THOSE COSTS THEN YOU END
UP PROBABLY IN THE 40 TO $50
RANGE. THAT'S KIND OF WAYS TO
THINK ABOUT. WHAT DO YOU WANT TO
INCLUDE IN THE FIXED CHARGE?
WE'RE NOT GETTING INTO ANYTHING
LIKE GENERATION OR PURCHASE
POWER OR ANYTHING OF THAT TYPE.
SO WE THINK THAT'S A GOOD PLACE
TO START. UM WE THINK IT WILL
HELP DAMPEN VOLATILITY. UM, AND
IT WOULD REDUCE BILLS FOR LOW
INCOME CUSTOMERS ACROSS THE
STATE IN EVERY CLIMATE AREA. AND
HOW WOULD THAT HOW WOULD THAT
$30 FIXED CHARGE FOR NON CARE
CUSTOMERS IMPACT. UH, THEIR
RATES. LET'S SAY IT WOULD REDUCE
THEIR USAGE BASED RATES. I THINK
THE NUMBER THAT WE HAVE IS
SOMETHING LIKE IT'S ABOUT FIVE
CENTS A KILOWATT HOUR FOUR OR
FIVE CENTS. UH, IT DEPENDS BY
UTILITY. SO UM EVERY DOLLAR THAT
WOULD BE COLLECTED THROUGH A
FIXED CHARGE COMES OUT OF THE
USAGE CHARGE, SO IT'S NOT AN
INCREMENT. IT'S JUST A
REORGANIZATION OF HOW THE COSTS
ARE COLLECTED AND HOW CUSTOMERS
ARE AFFECTED WOULD DEPEND UPON
THEIR USAGE AND PARTICULARLY
AVERAGE USAGE WITHIN EACH
CLIMATE AREA. RATES ARE KIND OF
DIVIDED UP USING THE BASELINE
SYSTEM INTO DIFFERENT CLIMATE
ZONES ACROSS THE STATE, SO
HIGHER USAGE CUSTOMERS WITHIN
EACH GIVEN AREA, UM, WOULD TEND
TO FARE BETTER LOW IS USED,
LOWER USAGE WOULD TEND TO FARE
LESS WELL, BUT THE NET IMPACT WE
ESTIMATE IN THE RANGE OF ABOUT
YOU KNOW, IT COULD BE LIKE 5 TO
7 BUCKS A MONTH FOR A NON LOW
INCOME CUSTOMER. UM BUT NOBODY'S
THE AVERAGE. EVERYBODY IS THEIR
OWN UNIQUE CUSTOMER. AND ANY
CUSTOMER THAT WANTS TO ELECTRIFY
, OF COURSE, ENDS UP BEING A
BIGGER CONSUMER. UM SO WHAT?
WHAT CUSTOMERS MIGHT SEE THEIR
THEIR OVERALL BECAUSE I MEAN THE
YOU KNOW THESE, THESE DEBATES
ARE ALL FINE. BUT AT THE END OF
THE DAY, THE CUSTOMER JUST SEES
ONE NUMBER, WHICH IS WHAT
THEY'RE PAYING THE UTILITY AND
THAT'S ALL THEY CARE ABOUT. SO
WHAT? YOU KNOW WHAT WHICH
CUSTOMERS COULD ACTUALLY SEE
THEIR BILLS GO UP AND WHAT
CUSTOMERS WOULD ACTUALLY SEE
SOME SOME RELIEF, I GUESS, UM
WELL, ON AVERAGE, THE LOWEST
USAGE CUSTOMERS WOULD SEE THEIR
BILLS GO UP, BUT THEY START FROM
A LOWER BASE. THEY HAVE LOWER
BILLS TO BEGIN WITH THE HIGHEST
USAGE. CUSTOMERS HAVE THE
HIGHEST BILLS TO BEGIN WITH, UM
THEY WOULD SEE THE MOST RELIEF
CUSTOMERS WHO LIVE IN THE HOT
INLAND ZONES THAT ARE FACING
EXTREME BILLS IN THE SUMMER
WOULD SEE MORE RELIEF BUT LOW
INCOME CUSTOMERS ACROSS ALL
CLIMATE AREAS WOULD SEE LOWER
BILLS BECAUSE THE WAY WE'RE
SETTING IT UP IS A MUCH LOWER
CHARGE FOR LOW INCOME CUSTOMERS.
$5 THAT'S OUR PROPOSAL AND $30
FOR NON LOW INCOME, AND THE
STATUTE ACTUALLY REQUIRES THAT
THE AVERAGE LOW INCOME CUSTOMER
IN EVERY PART OF THE STATE SEE
BENEFITS. SO IN ESSENCE, YOU'RE
TRYING TO INCREASE THE FLOOR OF
THAT COST, BUT ALSO TRY TO BRING
THAT CEILING. YEAH, THAT WOULD
BE ONE WAY TO SAY IT. YEAH, I
MEAN, THESE. THESE ARE ALL HARD
CHOICES. THERE'S NÓ FREE MONEY
HERE THAT YOU'RE THAT WE HAVE
AVAILABLE TO US IN THIS
EXERCISE. IT'S JUST A QUESTION
OF REALLOCATING. UM HOW WE PAY
FOR THESE SYSTEM COSTS AND WHY
ARE YOU OK NOW, WITH THIS TYPE
OF CHARGE THAT THAT YOU WEREN'T
SAY, 10 YEARS AGO, YOU'D
MENTIONED IT A LITTLE BIT. BUT
MAYBE YOU COULD BE A LITTLE MORE
SPECIFIC? SURE WELL, THE MUCH
HIGHER RATES THAT WE'RE SEEING
NOW. I MEAN, WE'VE WE'RE PAST
THE BOILING POINT. IN TERMS OF
THE IMPACT ON CUSTOMERS. UM THE
FACT THAT YOU'RE ALL GETTING
CALLS RIGHT NOW FROM YOUR
DISTRICTS FROM MAD CONSTITUENTS
THAT WASN'T HAPPENING 10 YEARS
AGO, PEOPLE ARE FURIOUS WITH
WHAT'S GOING ON, AND PEOPLE
ESPECIALLY WHO LIVE IN HOTTER
AREAS ARE GONNA SEE BILLS THIS
SUMMER THAT ARE GONNA MAKE THEIR
EYES FALL OUT OF THEIR HEAD.
RIGHT AS YOU SEE. THESE HEAT
WAVES. UM SO WE'RE RECOGNIZING
THE FACT THAT WE NEED TO DO
SOMETHING TO DEAL WITH
VOLATILITY OF THE BILLS. WE'VE
GOT PLENTY OF INCENTIVES FOR
CONSERVATION, WHICH AGAIN WAS
OUR NUMBER ONE ISSUE 1012 YEARS
AGO WAS LIKE WE CAN'T WE CAN'T
JEOPARDIZE ENERGY EFFICIENCY OR
CONSERVATION. WE SUPPORT ENERGY
EFFICIENCY AND CONSERVATION. BUT
IS THERE ANY PRICE THAT'S TOO
HIGH? THERE IS A PRICE THAT'S
TOO HIGH LIKE THERE'S A THERE'S
A LEVEL AT WHICH YOU'RE NOT
INCENTIVIZING. YOU'RE JUST
PUNISHING. UM I THINK THAT THE
GROWTH OF DISTRIBUTED RESOURCES
AND THE FRACTION OF CUSTOMERS
THAT ARE NOW ADOPTING BEHIND THE
METER TECHNOLOGIES AND THE
GROWTH IN MICRO GRIDS MEANS WE
HAVE TO THINK OF A BETTER WAY TO
ASSIGN COSTS ACROSS ALL
CUSTOMERS. UM THIS IS A GAME
CHANGER. YOU KNOW WHEN, WHEN
WE'RE LOOKING AT THE FRACTION OF
CUSTOMERS THAT HAVE ADOPTED
THESE TECHNOLOGIES, AND I THINK,
AS S¼ Tð GE POINTED OUT THAT
THERE WERE VERY FEW BEFORE, AND
PG AND E HAS ALMOST 20% OF ITS
NON LOW INCOME RESIDENTIAL
CUSTOMERS RIGHT NOW THAT ARE
HAVE ROOFTOP SOLAR, SO WE HAVE
TO THINK ABOUT A WAY TO
RATIONALIZE THIS. AND THEN THE
OTHER THING IS THE INCOME.
GRADUATED ELEMENT ALLOWS US TO
USE THIS CHARGE TO PROVIDE
SPECIFIC DISCOUNTS TO LOW INCOME
CUSTOMERS, AND THAT'S WHAT WE'RE
REALLY INTERESTED IN, IS MOVING
THE NEEDLE ALSO FOR THE LOW
INCOME CUSTOMER GROUP. IN ANY
YOU DIDN'T MENTION ANY OF YOUR
POSS DEMAND RESPONSE, DO YOU?
UH, IS THAT DO YOU HAVE SOME
THOUGHTS ON MOSTLY BECAUSE I
DON'T WORK ON DEMAND RESPONSE
PERSONALLY, NOT BECAUSE I DON'T
THINK IT'S AN IMPORTANT ISSUE.
OK, THANK YOU. THANK YOU FOR
YOUR CANDOR. UM AND I WOULD JUST
SAY ON THE FIXED RATE DEBATE
THAT I CONTINUES TO RAGE AND WE
WILL BE HEARING A NUMBER OF
BILLS RELATED TO THAT HAVING
ADDITIONAL CONVERSATIONS. UM, ON
THAT TOPIC AS A COMMITTEE,
CERTAINLY, UM, I THINK FROM MY
PERSPECTIVE, IF A FIGHT ABOUT
HOW WE REALLOCATE SO THE PIE IS
WAY TOO BIG AND GROWING IN A WAY
THAT WE WE'VE ALL ACKNOWLEDGED
IS UNTENABLE. A FIGHT ABOUT HOW
WE CHANGE THE TO THOSE SLICES
OBSCURES THE FACT THAT WHAT WE
REALLY NEED TO BE TALKING ABOUT
IS HOW DO WE SHRINK THAT PIE? UM
ALL RIGHT, MISTRESS BURR. SORRY
TO GET BACK TO ROOFTOP SOLAR
AGAIN. UM, BUT YOU KNOW, I. I
ASSUME THAT IMPLICIT IN THE
VIEWS THAT YOU EXPRESSED AND
THAT MR PEARCE EXPRESSES THE
FACT THAT WE'VE GOT RATES
INCREASING SO THE NEED FOR
INCENTIVES BASED ON THE RATE
STRUCTURE ARE DECLINING. UH IN
TERMS OF HAVING MORE
DISTRIBUTION OF ROOFTOP SOLAR
OUT IN THE COMMUNITY. I ASSUME
THAT'S SOME OF WHAT'S HAPPENING.
I GUESS THE FOLLOW ON QUESTION I
HAD IS, UM IF WE DIDN'T HAVE
THIS ADDITIONAL $6.5 BILLION
EMBEDDED IN THE STRUCTURE AND
WE'RE RELYING ON THE EXISTING
RATE STRUCTURES. WHAT IS THE
ROUGH? UH, NUMBER OF TIME PERIOD
THAT WE WOULD NEED FOR SOMEONE
TO RECOUP THEIR INVESTMENT.
THAT'S ONE QUESTION. AND THEN
THE SECOND QUESTION I HAD FOR
ALL OF YOU BECAUSE I'VE GOT TO
LEAVE QUICK SOON IS, UM WHO IN
CALIFORNIA STATE GOVERNMENT IS
RESPONSIBLE FOR AND LOOKING AT
THE EXTENT TO WHICH THERE IS
FEDERAL FUNDING AVAILABLE TO
SUBSIDIZE ROOFTOP, SOLAR AND
SORT OF AGGREGATE FOR CUSTOMERS.
UM IS THAT BEING DONE? WELL UM
OR OR AT ALL I GUESS, AND I JUST
WANTED TO SEE IF ANY OF YOU
HAVE, UH UH. PERSPECTIVE ON
THAT. NÓ THANK YOU. ASSEMBLY
MEMBER FOR THE QUESTION AND, UM,
LOOKING AT THE SPECIFIC ROOFTOP
SOLAR QUESTION, UH, THERE WAS A
PRETTY EXTENSIVE PROCEEDING AT
THE èC P èC, UH, A YEAR OR SO
AGO THAT LOOKED AT REALLOCATING
HOW, UM EXCESS GENERATION FROM
ROOFTOP SOLAR WAS ACTUALLY, UH,
GOING TO BE IMPLEMENTED HERE,
AND WE ACTUALLY IMPLEMENTED THAT
IN IN DECEMBER OF 2023. AND WHAT
THAT ACTUALLY DOES, IS IT? IT
LOOKS AT THE AVOIDED COST OR OR
WHAT'S THE ACTUAL VALUE THAT
SOLAR PROVIDING TO THE SYSTEM
LARGELY DRIVEN BY THE GENERATION
? THAT IS OFFSET, AND SO NOW
THAT TARIFF HAS BEEN DELINKED
FROM THE RESIDENTIAL RATE AND
NOW IS BASED ON THAT MARKET RATE
AGAIN, SO THAT THAT WAS ONE
PIECE OF THE PUZZLE. I THINK
WE'RE LOOKING AT THE OTHER PIECE
THROUGH, UH, THE ONGOING
PROCEEDING AROUND THE
RESIDENTIAL FIXED CHARGE, AND I
THINK THAT'S ANOTHER PIECE TO
ULTIMATELY HELP SOLVE THAT. THAT
$450 ANNUAL UH, BILL COST SHIFT
THAT YOU SAW REGARD TO YOUR YOUR
QUESTION AROUND WHAT WE'RE
SEEING IN TERMS OF PAYBACKS IF
THIS WERE ALL TO BE FIXED, BASED
ON SOME OF THE ANALYSIS THAT WE
HAVE DONE, SORT OF ON OUR FIRST
VERSION PROPOSAL, WE ARE SEEING
PAYBACKS WITH SYSTEMS PAIRED
WITH STORAGE AROUND THAT SIX
YEAR OR SO. TIME RANGE, UH, IN
SOLAR STAND ALONE JUST UNDER
NINE YEARS. AND IF YOU RECALL
BACK IN THE PRECEDING THE
COMMISSION REALLY LOOKED AT THAT
NINE YEAR HORIZON IS SORT OF
THAT THAT CEILING OF WHAT THEY
WERE TRYING TO STAY UNDER. SO
EVEN UNDER THE RATE REFORM
PROPOSAL WE'RE LOOKING AT RIGHT
NOW. AT LEAST S¼ Dð G Dð FIRST
VERSION. WE'VE WE'VE LOOKED AT A
FEW NUMBERS THAT THEY'RE STILL
BILL SAVINGS FOR THOSE CUSTOMERS
TO INCENTIVIZE THAT IT'S JUST
NOT BURDENING THE OTHER
CUSTOMERS AS MUCH AS THEY HAVE.
I JUST WANT TO MAKE A POINT
ABOUT THAT, UM THOSE WERE THE
NUMBERS THAT WERE FROM THE
PRECEDING THAT WAS DECIDED IN
DECEMBER. SINCE THEN THERE'S
BEEN SOME ISSUES WITH
IMPLEMENTATION THAT HAS COME UP.
UM, THAT WE'VE SEEN BASING. IT
HAS TO DO WITH THE WAY THAT THE
GENERATION AND DELIVERY CREDITS
ARE SPLIT, UM, FOR CUSTOMERS ON
THEIR BILLS THAT WE THINK IS
ACTUALLY GONNA MAKE THOSE
TIMELINES A LOT LONGER, UNLESS
THAT IS ADDRESSED TO GET US BACK
TO THE NUMBERS THAT WE HAD ALL
AGREED ON IN THE PROCEEDING, SO
WE'RE TRYING TO LOOK INTO FIXES
FOR THAT, BUT, UM, I WOULD JUST
CALL OUT THAT THOSE NUMBERS MAY
BE LONGER BASED ON THE FACT THAT
THIS WONKY IMPLEMENTATION ISSUE
HAS COME UP IN THE AFTER THE
PROCEEDING WAS SORT OF SLIPPED
IN AT THE END. AND SIT IN MORE
INFORMATION ON THAT, AND I'D BE
HAPPY TO FOLLOW UP. I WOULD ALSO
TO THE QUESTION ABOUT THE IRA. I
CAN ONLY SPEAK ON THE COMMUNITY
SOLAR SIDE OF THINGS. BUT GO BIZ
HAS BEEN, UM, RUNNING THE
APPLICATION FOR SOLAR FOR ALL.
I'M NOT SURE ABOUT THE REST. AND
AN ASSEMBLY MEMBER. JUST ON THAT
POINT. UM I THINK IT'S A HUGE
MISSED OPPORTUNITY FOR THE STATE
NOT TO BE PRIORITIZING THESE
FEDERAL DOLLARS AND WHAT I'M
SEEING IS MOSTLY CHAOTIC EFFORTS
RATHER THAN ORGANIZED EFFORTS,
AND THE PU èC SAYS TO THE
UTILITIES GO FIND ALL THE
FEDERAL MONEY YOU CAN. UTILITIES
ARE ONLY MODESTLY MOTIVATED TO
FIND FEDERAL MONEY, ESPECIALLY
IF IT OFFSETS THEIR CAPITAL
INVESTMENT, SO THEY'RE
INTERESTED, BUT THEY MIGHT NOT
ALSO BE THE BEST ENTITIES TO BE
IN CHARGE OF THAT SEARCH
PROCESS. I THINK THE
ADMINISTRATION SHOULD HAVE
SOMEBODY ON POINT WHOSE JOB IT
IS EVERY DAY TO WAKE UP AND
THINK ABOUT. HOW CAN I GET MORE
FEDERAL DOLLARS TO SUPPORT
CALIFORNIA? BECAUSE THE ADOPTION
THE ENACTMENT OF THE INFLATION
REDUCTION ACT AND THE
INFRASTRUCTURE ACT? ARE ONCE IN
A GENERATION OPPORTUNITIES FOR
US TO GET SUPPORT FROM THE
FEDERAL GOVERNMENT FOR OUR STATE
, CLEAN ENERGY PRIORITIES, AND
WE SHOULD BE ENTIRELY FOCUSED ON
GETTING MAXIMUM VALUE FROM THE
FEDERAL GOVERNMENT. I'M NOT
SEEING IT. YEAH, I. I JUST WANNA
SAY I MEAN, I, I AGREE WITH THAT
. I MEAN, I. I HEAR THINGS THAT
ARE HAPPENING IN OTHER STATES
AND I'M NOT HEARING ABOUT
SIMILAR KINDS OF EFFORTS IN
CALIFORNIA YET AND SO WE THAT
WAS THE REASON WHY I ASKED THE
QUESTION. SO THANK YOU FOR THAT.
YEAH. APPRECIATE THE QUESTION,
UM AND AGAIN APPRECIATE.
APPRECIATE YOUR RESPONSE. UH I
THINK CERTAINLY, AT THIS MOMENT
WE RECOGNIZE WE HAVE SOME
UNPRECEDENTED CHALLENGES. IT'S
ALSO AN UNPRECEDENTED
OPPORTUNITY WITH THE HUNDREDS OF
BILLIONS OF DOLLARS THAT ARE ON
THE TABLE, SO WE CERTAINLY NEED
TO DO EVERYTHING IN OUR POWER TO
BRING AS MANY OF THOSE DOLLARS
TO CALIFORNIA AS POSSIBLE. AND I
THINK IT'S THE ONLY WAY THAT WE
ACTUALLY, UM CAN DELIVER ON OUR
ON OUR CALLS IN A WAY THAT IS
ACTUALLY COST EFFECTIVE. SO I
REMEMBER HER. UM MR WARE. YOU
PREVIOUSLY SERVED AS A WILDFIRE
COMMISSIONER AND ALSO ON THE
CALIFORNIA CATASTROPHE COUNCIL.
AND I AM SORRY TO INTERRUPT YOU,
UH, AS MY MEMBER HEART, UM,
WE'RE JUST GONNA LET UH, OUR
EXECUTIVE DIRECTOR FROM THE P
èC HAS A RESPONSE TO THAT
QUESTION BEFORE ASSEMBLY MEMBERS
OF BUR LEAVE. SHE HAS A SHE'S
RUSHED UP TO ANSWER YOUR
QUESTION. THANK YOU, CHAIR. I
APPRECIATE IT. RACHEL PETERSON,
EXECUTIVE DIRECTOR OF THE èC PU
èC, AND WE'RE ALSO AS YOU'RE
HEADED OUT THE DOOR. WE'RE HAPPY
TO FOLLOW UP WITH YOUR OFFICE.
I'M HAPPY. CORRECT THE RECORD.
THERE IS, IN FACT, A MAJOR STATE
EFFORT GOING ON TO PULL IN AS
MANY FEDERAL DOLLARS AS POSSIBLE
GO BIZ IS THE LEAD AND A NUMBER
OF AGENCIES HAVE BEEN VERY
ACTIVE IN PURSUING FEDERAL
DOLLARS. UM WE HAVE NOT SEEN
UNALLOYED SUCCESS, BUT WE HAVE
SEEN SOME SUCCESS. AND IN FACT,
THE èC P èC IS IN CHARGE OF
THE SOLAR FOR ALL APPLICATION,
AND WE ARE ANTICIPATING A
RESPONSE ON THAT SOMEWHERE IN
THE NEXT MONTH, VERY HAPPY TO
FOLLOW UP MORE WITH YOUR OFFICE.
I WOULD APPRECIATE THAT. THANK
YOU SO MUCH. ALL RIGHT. THANK
YOU FOR THAT, AND I THINK WE
WOULD. PERHAPS YOU CAN SHARE
THAT INFORMATION AND FOLLOW UP
WITH, UH, WITH ALL OF US. THAT
WOULD BE HELPFUL. THANK YOU.
ASSEMBLY MEMBER. THANK YOU. I'M
JUST INTERESTED IN YOUR
EXPERIENCE AND INSIGHT INTO
FUTURE WILDFIRE MITIGATION COSTS
AND TRENDS. AND YOU KNOW WHAT DO
YOU WHAT DO YOU SEE? IS THIS ARE
WE REACHING A PLATEAU WITH THE
INVESTMENTS THAT THE UTILITIES
HAVE MADE OR THINGS JUST GONNA
GET INCREMENTALLY AND
EXPONENTIALLY MORE WELL. I THINK
IT DEPENDS ITS UTILITY SPECIFIC
AND IT DEPENDS ON THE MATURITY
OF THE UTILITIES MITIGATION.
ACTIVITIES WHERE SAN DIEGO
STARTED FIRST AND IS AHEAD. UM
AND I THINK EDISON IS A LITTLE
BIT FURTHER ALONG IN PG AND E
HAS BECAUSE ALSO BECAUSE OF THE
STRATEGIES THAT PG AND E HAS
ADOPTED. IS LESS MATURE. UM
THERE ARE AND I GUESS I'D SAY
II. I THINK THAT WE REALLY NEED
TO MOVE AWAY FROM THE IDEA. THAT
THIS. THE RIGHT APPROACH TO
WILDFIRE MITIGATION IS TO REDUCE
UTILITY IGNITIONS TO ZERO. THAT
IS AN INCREDIBLY EXPENSIVE
PROPOSITION. WE ARE ENCOUNTERING
THE RESULTS OF THAT PROPOSITION.
NOW. I DON'T BLAME THE I Ó U
FOR ADOPTING THAT APPROACH,
GIVEN THE LIABILITY REGIME THAT
THEY CONFRONT THE OUTCOMES OF
THAT LIABILITY REGIME FOR THEM,
AND ALSO GIVEN THE RELATIVE
RELATIVE. BLACK YOU KNOW, WE
WE'VE DONE A LOT TO INVEST IN.
AND I WANNA GIVE THE LEGISLATURE
AND THE GOVERNOR A TON OF CREDIT
OVER THE LAST FEW YEARS TO TRY
TO INVEST IN WILDFIRE MITIGATION
. IT IS STILL DWARFED BY WHAT
THE UTILITIES DO. IT IS NOT
ENOUGH. WE ARE SEEING THAT
IMPACT, NOT JUST FROM YOU IN IN
THE IN THE IMPACTS ON UTILITY
RATES, YOU KNOW, DISTRIBUTION
SYSTEM INVESTMENT, BUT ALSO THE
FACT THAT YOU KNOW? BASICALLY
NONE OF THE LARGE INSURERS ARE
WRITING NEW POLICIES IN
CALIFORNIA, THAT IS, YOU WANT TO
TALK ABOUT A HUGE IMPACT ON
HOMEOWNERS COSTS GO FROM $2000
ON ADMIT ALLIANCE POLICY TO
EIGHT. MAYBE IF YOU'RE ON THE
FAIR PLAN, PLUS, UH, DIFFERENCE
IN CONDITIONS POLICY. SO THERE
ARE VERY LARGE IMPACTS FROM OUR
FAILURE TO DO AS MUCH AS WE
SHOULD BE DOING ON WILDFIRE AND
THAT'S A HUGE CHALLENGE RIGHT
NOW, BECAUSE THERE'S NOT MONEY
RAINING FROM THE SKY ANYMORE. UM
BUT I THINK IT'S A CHALLENGE WE
CAN'T REALLY IGNORE GIVEN THE
POTENTIAL IMPACTS ON THE ECONOMY
, ESPECIALLY OF THE REAL ESTATE
MARKET. ALSO GIVEN THE FACT THAT
WE NEED TO DO THOSE THINGS IF WE
WANT TO BUILD THE HOUSING WE
NEED DESPERATELY IN THIS STATE.
IF I'VE BEEN ON A VARIETY OF
PANELS WITH THE INDIVIDUAL WHO
LEADS èC B, A AND ONE THING
THAT HE SAYS THAT REALLY STOPS
ME IN MY TRACKS IS THAT MULTI
UNIT HOUSING AND NOT NECESSARILY
IN HIGH FIRE THREAT AREAS IS
STRUGGLING TO GET COVERAGE AT
THIS POINT BECAUSE OF THE
DYSFUNCTION IN THE INSURANCE
MARKET. THIS IS ALL CONNECTED.
HALF THE STRUCTURES THAT WE'VE
LOST OVER THE LAST DECADE OR
HALF THE STRUCTURES. SORRY. LET
ME CORRECT THAT HALF THE
STRUCTURES FROM THE 20 LARGEST,
MOST DESTRUCTIVE FIRES IN
CALIFORNIA HISTORY WERE LOST DUE
TO UTILITY COST IGNITION. SO
OBVIOUSLY UTILITIES ARE A BIG
PART OF THE PROBLEM AND A BIG
PART OF THE SOLUTION, BUT THERE
ARE OTHER SOLUTIONS THAT ARE
MORE COST EFFECTIVE,
PARTICULARLY GIVEN THAT THE
UTILITIES HAVE DONE A LOT OF
WORK OVER THE LAST FIVE YEARS.
SAN DIEGO, IN PARTICULAR HAS
BEEN A LEADER AND HELPED TO SHOW
THE WAY THE OTHER I Ó U HAVE
FOLLOWED, AND THE SMALLER I USE
AND THE A Ó U. WE ARE IN A MUCH
BETTER PLACE WITH RESPECT TO
UTILITY IGNITION PREVENTION. SO
THEN WE NEED TO DO THE OTHER
THINGS RIGHT? AND THERE ARE A
NUMBER OF THEM THAT THAT WE ARE
STRUGGLING TO DO AS A STATE, BUT
OUR ARE MUCH I WOULD ARGUE. MORE
COST EFFECTIVE THAN ASKING
RATEPAYERS TO INVEST THE NEXT
RATEPAYER DOLLAR IN, SAY. MORE
YOU KNOW, UNDERGROUND AND
COVERED CONDUCTOR. MORE HARDWARE
IN THE UTILITY SYSTEM. UM SO
THAT'S JUST MY PERSPECTIVE. I
THINK THE STATE NEEDS TO DEVELOP
ITS OWN PERSPECTIVE ABOUT THIS
BROADER QUESTION OF COST
EFFECTIVENESS ACROSS DIFFERENT
SILOS OF INVESTMENT, AND THAT'S
WHY I THINK THESE KIND OF
STRATEGIC PLANNING INITIATIVES
AT THE AT THE STATE LEVEL, NOT
THE UTILITIES, NOT Ó E. I S¼
CAL FIRE. YOU KNOW? THE OTHER
POTENTIAL ACTORS FOR SERVICE
SHOULD BE INVOLVED, TOO, BECAUSE
THEY OWN A LOT OF THE TREES, BUT
WE NEED TO FIGURE OUT WAYS TO
KEEP COMMUNITIES SAFE. THAT'S
WHAT WE NEED COMMUNITY SAFETY
IT. WE NEED TO CREATE A
SITUATION WHERE IT'S NOT A BETA
COMPANY RISK THAT THERE WOULD BE
A SINGLE IGNITION. MHM. BECAUSE
IF IT IS THE UTILITIES, YOU'RE
GONNA SPEND WHATEVER THEY NEED
TO SPEND TO TRY TO PREVENT THAT
IGNITION. SO I THINK THAT THAT'S
MY PERSPECTIVE. HAVING THAT BODY
OF EXPERIENCE AT THIS POINT,
THANK YOU. IT'S REALLY VALUABLE.
THANK YOU. ALL RIGHT. ONE MORE
QUESTION FROM SAM EVER SHAVO AND
THEN SOME CONLY. JUST ON THE
WILDFIRE ISSUE. UM, SO YOU KNOW.
UM MR PEARCE WAS TALKING ABOUT
SDG AND E AND THE SUCCESS THAT
THEY'VE HAD, AND I DON'T KNOW.
UM, PROFESSOR WAR IF YOU'VE
LOOKED AT KIND OF COMPARISONS OF
WHAT'S BEEN INVESTED BY EACH
DIFFERENT UTILITY AND WHAT'S
BEEN THE RESULT OR, YOU KNOW, I
DON'T KNOW, MAYBE NOT RESULT,
BUT, UM, BUT THE DIFFERENT
LEVELS OF INVESTMENT, UM AND
LIKE, YOU KNOW, S¼, Dð, SDG AND
E. HOW DO THEY RATE IN TERMS OF
HOW MUCH THAT COSTS? THEY'RE
HAVING A GOOD SUCCESS? AND THEN
WE HEAR ABOUT? YOU KNOW P GENIE
IS, UH, HèA HAD WANTS TO PUT A
LOT OF INVESTMENT IN UNDERGROUND
IN WHICH WE KNOW IS INCREDIBLY
EXPENSIVE. UM AND YOU KNOW, AND
THERE'S A LOT OF NEW
TECHNOLOGIES OUT THERE. I HEARD
ABOUT, UM, KIND OF EARLY
TRACKING CAMERAS AND OTHER
TECHNOLOGIES. UM YOU KNOW,
COVERING TRANSMISSION LINES.
THERE'S DIFFERENT KINDS OF
OPTIONS THAT ARE OUT THERE AS
TECHNOLOGY PROGRESSES, THAT
THEORETICALLY WOULD BE A LOT
CHEAPER THAN UNDERGROUND. UM SO
DO YOU. DO YOU HAVE A SENSE OF
LIKE, WHERE IS THAT SWEET SPOT
OR THAT HAPPY PLACE OF THIS IS
THIS IS WHERE HOW YOU WANNA
BALANCE THAT INVESTMENT AS A AS
AS UTILITY, UM AROUND WILDFIRE
MITIGATION. SO THIS IS A
QUESTION THAT UTILITIES ACROSS
THE WEST ARE THINKING ABOUT
RIGHT NOW, RIGHT? WE'RE HEARING.
YOU KNOW, WE DON'T KNOW ANYTHING
YET ABOUT THERE'S NÓ FINALITY,
BUT WE'RE HEARING DISTURBING
THINGS ABOUT WHAT HAPPENED IN
TEXAS THIS WEEK WITH RESPECT TO
UTILITIES. UM, WE, YOU KNOW,
SOME OBVIOUSLY IN LAHAINA. THERE
WAS A TERRIBLE OUTCOME THAT IS
REALLY REMINISCENT OF THE
CAMPFIRE FOR ALL OF US. I. I
THINK THERE ARE A CLEAR SET OF
INVESTMENTS THAT AND I WOULD
THEY REALLY BEGIN WITH
OPERATIONS MORE THAN CAPITAL
INVESTMENT. RIGHT THE MOST
EFFECTIVE THINGS THAT OUR
UTILITIES HAVE DEVELOPED IN SAN
DIEGO IS REALLY A LEADER ON
THIS. I WANT TO GIVE THEM A TON
OF CREDIT FOR THIS BECAUSE YOU
NEED TO KNOW WHEN IT IS SAFE TO
OPERATE YOUR SYSTEM AND WHEN IT
IS NOT SAFE, AND THAT MEANS
PRETTY SIMPLE STUFF, PUTTING
PUTTING WEATHER STATIONS ON
POLES. AND THEN YOU NEED TO
DEVELOP A PROCESS TO TURN THE
POWER OFF WHEN IT'S NOT SAFE. OR
DO OTHER THINGS LIKE FAST TRIP
OR FAST CURVE OR EP S¼ S¼,
DEPENDING ON WHAT PLACE YOU'RE
AT. THAT THAT LIMIT THE RISK
THOSE COMPROMISE RELIABILITY.
LET'S BE STRAIGHT ABOUT IT
RIGHT. IT IS A LESS RELIABLE
SERVICE. BUT IT IS A SAFE
SERVICE. AND THEN THE QUESTION,
I THINK SHOULD BE TO WHAT DEGREE
ARE WE WILLING TO SPEND
EVERYBODY'S MONEY? TO IMPROVE
THE TO GET THE RELIABILITY IN
THESE HIGH FIRE THREAT DISTRICTS
BACK TO WHERE THE LOW RED
DISTRICTS ARE IN TERMS OF
RELIABILITY, AND THAT'S YOU
KNOW, THAT'S A VALUES QUESTION.
III I THINK THAT THERE IS THERE
IS A VERY EXPENSIVE PATH TO VERY
HIGH RELIABILITY IN THE HIGH
FIRE THREAT DISTRICTS. IT'S NOT
CLEAR TO ME THAT WE CAN AFFORD
THAT. AS A STATE. OR OR THAT THE
RATE PAYERS THAT ARE GOING TO BE
PUNISHED. THE MOST THE FOLKS
THAT MATT SO ELOQUENTLY, YOU
KNOW, SHOW IN THAT GRAPH OR
FACING THOSE SKYROCKETING BILLS
IN THE SUMMER THAT WE SHOULD ASK
THOSE PEOPLE TO PAY THE COST TO
MAKE SURE THAT SOMEONE IN A VERY
HIGH FIRE THREAT DISTRICT HAS
VERY HIGH RELIABILITY DURING
FIRE SEASON. YOU KNOW, I AT A
MINIMUM, I THINK IT IS AND WE'VE
DONE WORK ON THIS. I THINK IT'S
REASONABLE TO THINK ABOUT ASKING
THE HIGH INCOME AREAS THAT ARE
HIGH FIRE THREAT TO PAY SOME OF
THE COST OF THEIR UNDERGROUND.
MORE LIKE HOW WE HAVE TREATED
UNDERGROUND IN THE PAST, WHEN IT
WAS KIND OF TO IMPROVE YOUR
VIEW, AND YOU KNOW, AND I DON'T
KNOW. SO AN AFFLUENT PLACE. UM
THE BUT I YOU KNOW, FOR THE LOW
INCOME PLACES, THEN THE
QUESTION, I THINK SHOULD BE ARE
THERE OTHER KINDS OF RELIABILITY
RESOURCES TO DISTRIBUTE ANY
ENERGY RESOURCES, RIGHT BATTERY
STORAGE, EVEN JUST GENERATORS.
THAT WE CAN THINK ABOUT
PROVIDING AS AN ALTERNATIVE TO A
VERY EXPENSIVE CAPITAL
INVESTMENT. HOW DO WE FEEL ABOUT
HAVING LESS RELIABLE POWER IN
THOSE PLACES? THAT'S NOT A
QUESTION WE'VE REALLY BEEN
WILLING TO CONFRONT AS A STATE,
BUT I THINK THAT THE SITUATION
IN RATES REQUIRES THAT IT IS A
HARD CHOICE. IT'S A VALUES
DRIVEN CHOICE. DIFFERENT PARTS
OF CALIFORNIA ARE GONNA FEEL
DIFFERENTLY ABOUT IT. BUT THAT'S
WHERE WE ARE. I MEAN, THAT'S
WHAT THE CHART SHOWS. SO THAT
WOULD BE AND DIFFERENT PARTS OF
AMERICA ALL ACROSS THE WEST.
THIS IS A PROBLEM. OREGON
WASHINGTON, TEXAS, COLORADO AND
DIFFERENT PLACES ARE GONNA COME
UP WITH DIFFERENT ANSWERS, TOO,
AND IT'S OK, BUT WE NEED TO ASK
THAT QUESTION. THANK YOU AND I,
YOU KNOW, I APPRECIATE. I JUST
WANTED TO COMMENT THAT I REALLY
APPRECIATE MR FRIEDMAN YOUR
URGENCY ABOUT THE SITUATION
BECAUSE I THINK THAT REALLY
REFLECTS WHAT PEOPLE IN OUR
COMMUNITIES ARE EXPERIENCING,
AND THE URGENCY WITH WHICH WE
NEED TO REALLY ADDRESS THIS
ISSUE, AND SO, UM, APPRECIATE
ALL OF YOUR IDEAS THAT YOU
BROUGHT TO THE TABLE TODAY.
THANK YOU. ASSEMBLY MEMBER
CONNOLLY. THANKS WANTED TO, UH,
BRING UP DYNAMIC RATE PRICING,
WHICH WAS MENTIONED IN THE
TESTIMONY. UH, WE KNOW THERE'S
SOME PILOT WORK GOING ON IN THE
AGRICULTURAL WATER PUMPING
SPACE. UH, BASICALLY TO NUDGE
USERS TOWARDS SHIFTING THEIR
ELECTRICITY USE, UM TO NINE PEAK
HOURS. SO THE QUESTION IS, IS
THERE ANY STATEWIDE KIND OF
EFFORT TOWARD ME TO DYNAMIC
PRICING. YES. ASSEMBLY MEMBER. I
COULD TAKE THAT, UM CURRENTLY
RIGHT NOW AS PART OF THE ONGOING
PROCEEDING THAT'S LOOKING AT THE
FIXED CHARGE. THERE'S ACTUALLY A
SECOND TRACK OF THAT THAT'S
ACTUALLY LOOKING AT DYNAMIC
PRICING AS WELL. UM AND I THINK
REALLY LOOKING AT HOW WE SHOULD
POTENTIALLY, YOU KNOW, AT LEAST
FROM FROM S¼ Dð G Dð S¼
PERSPECTIVE, POTENTIALLY PILOT.
SOME OF THESE IDEAS. UM AND
REALLY, I'D SAY, UH, CRAWL
BEFORE WE COULD WALK ON THIS. I
THINK WE'RE JUST COMING OFF, UH,
MASS ENROLLMENTS OF TIME OF USE
RATES, AND I THINK WE ARE
FINALLY SEEING, UM, A LOT OF BUY
IN AND A LOT OF UNDERSTANDING
AROUND THAT AND SO SHIFTING, UH,
TO BROAD DYNAMIC PRICING THAT
POTENTIALLY IS EVERY HOUR OR
EVERY 15 MINUTES, UH, COULD
POTENTIALLY CREATE SOME
CONFUSION AMONG CUSTOMERS AND
REALLY COULD POTENTIALLY HAVE AN
ISSUE WHERE WE'RE SEEING ON THE
TECHNOLOGY SIDE, THOSE THAT CAN
INVEST IN TECHNOLOGIES THAT
COULD HANDLE THAT TYPE OF
DYNAMIC PRICING WOULD AND THOSE
THAT COULDN'T WOULDN'T AND THEY
WOULD POTENTIALLY LOSE OUT. SO
AGAIN. I THINK WE'RE TAKING THE
RIGHT APPROACH OF STUDYING IT
AND LOOKING AT HOW IT COULD BE
IMPLEMENTED IN THE FUTURE.
GREAT. THANK YOU. UM AND JUST
I'VE GOT ONE MORE QUESTION
BEFORE WE OPEN IT UP FOR PUBLIC
COMMENT. UM, I WANTED TO COME
BACK TO A POINT THAT SEVERAL
PANELISTS MADE, UH, RELATED TO
PUBLIC PURPOSE PROGRAMS AND THE
NEED TO EVALUATE THE COST
EFFECTIVENESS OF THOSE PROGRAMS
AND THEN REMOVE THE PROGRAMS
THAT ARE NOT COST EFFECTIVE. SO
THIS IS A QUESTION. UM FOR OUR
OUR PUBLIC ADVOCATE. UH HOW MANY
PROGRAMS ARE MAN AT CURRENTLY OF
THESE PROGRAMS ARE CURRENTLY
BEING MANAGED AND THE PU èC. I
HAVE TO SAY, I DON'T KNOW OFF
THE TOP OF MY HEAD. I WOULD SAY
IT'S OVER. IT'S IN THE HUNDREDS,
AND IT'S A LOT. IT'S A LOT AND I
CAN GET YOU THE SPECIFIC NUMBER.
I'M SORRY. I JUST DON'T RECALL
THE TOP OF MY HEAD. YEAH, AND
WE'LL GET YOU THAT NUMBER. AND
UM, WE HAVE IT. AND HOW MANY OF
THOSE HOW MANY OF THOSE PROGRAMS
DO YOU THINK ARE COST EFFECTIVE?
BASED ON YOUR ANALYSIS? I WOULD
SAY HUNDREDS ARE NOT COST
EFFECTIVE. WE JUST PUT IT THAT
WAY. YEAH. YEAH, OK AND SORT OF
SPOILER ALERT YOUR YOUR
PREDECESSOR. SHARED WITH MANY OF
US THAT HE THINKS IT'S ONE
PROGRAM THAT IS NOT COST THAT IS
COST EFFECTIVE. COST EFFECTIVE,
WHICH I? I SHARE THAT AND SORT
OF SAY THAT PUBLICLY PUBLICLY IN
THIS HEARING, BECAUSE I THINK IT
JUST HIGHLIGHTS WHAT AN URGENT
NEED. IT IS FOR US TO AND WE'VE
GOT THE PARTIAL LIST OF NON
EFFECTIVE PROGRAMS HERE. UM SO
WE REALLY WANT TO FOLLOW UP ON
THAT, UM, GET THAT ANALYSIS FROM
YOU AND YOUR TEAM AND THEN
UNDERSTAND WHAT WE NEED TO DO IS
THE LEGISLATURE TO ENSURE THAT
WE ARE, UH, EVAL. AND
ELIMINATING PROGRAMS THAT ARE
NOT COST EFFECTIVE. UM THERE'S A
NUMBER OF OTHER, UH POINTS. SO
JUST WANNA SAY THANK YOU TO
EVERYONE WHO OFFERED UP YOUR
MENU OF OPTIONS, UH, FOR, UH,
OPPORTUNITIES FOR US TO START TO
BEND THIS COST CURVE. UM, IN
ADDITION TO THE PUBLIC PURPOSE
PROGRAMS, NUMBER OF IDEAS THAT
WE DISCUSSED HERE THAT WE REALLY
LOOK FORWARD TO, UM, TO
FOLLOWING UP WITH YOU ON SO, UM,
THANK YOU IN ADVANCE FOR WORKING
WITH US ON THAT AS WE WORK TO
TURN. I THINK SOME OF THESE
NUGGETS INTO, UM REAL PROPOSALS
AND REAL COST SAVINGS FOR
CALIFORNIANS. UM SO WITH THAT
WE'LL GO AHEAD AND SAY THANK YOU
TO ALL OF OUR OUR PANELISTS FOR
BEING HERE AND, UH, WE WILL OPEN
IT UP FOR PUBLIC COMMENT. UM
THANK YOU, EVERYONE FOR YOUR
PATIENCE AND STICKING AROUND.
WELL WE'RE GONNA LIMIT PUBLIC
COMMENT TO TWO MINUTES. PERSONS.
WE HAVE TIME TO HEAR FROM
EVERYONE. MADAM CHAIR MEMBER,
SCOTT WETCH, ON BEHALF OF THE
CALIFORNIA COALITION OF UTILITY
EMPLOYEES. REALLY WELL DONE
HEARING. THANK YOU FOR
CONDUCTING THIS VERY TIMELY RATE
RELIEF IS AN EXTREMELY IMPORTANT
ISSUE TO MY MEMBERS. IT FEEDS
THEIR LIVELIHOOD. I JUST LIKE TO
SAY, UM WE EMBRACE MANY OF THE
IDEAS THAT WERE PUT FORWARD,
ESPECIALLY BY PROFESSOR WARRA.
UH, THERE'S MANY, MANY, MANY
DIFFERENT PROGRAMS THAT NEED TO
BE ELIMINATED. THERE'S NÓ FREE
LUNCHES HERE, UM WE SUPPORT THE
ALTERNATIVE FINANCING LOOKING AT
GGRF SECURITIZATION, BUT THE TWO
MOST SALIENT POINTS MADE HERE
TODAY IS ONE THE NIM SUBSIDY OF
$6.5 BILLION IS NOT CONGRUENT
WITH RATE RELIEF. YOU CAN'T HAVE
BOTH. YOU CAN'T HAVE 80% OF YOUR
CUSTOMERS PAYING 455 $100 A YEAR
TO SUBSIDIZE 20% YOU KNOW, THE
STATE OF CALIFORNIA THIS
LEGISLATURE ONLY SUBSIDIZES THE
U èC SYSTEM. $5 BILLION A YEAR.
AND TO PAY, UH, THREE TIMES THE
SUBSIDY TO SOLAR CUSTOMERS THAN
YOU DO TO CARE CUSTOMERS IS
UNCONSCIONABLE. AND THEN LASTLY,
THE POINT THAT, UH, THE GRAPH
THAT WAS THAT WAS POINTED OUT BY
SOME OF THEM WERE TING. TO
REITERATE THE REASON WHY
REVENUES HAVE STAYED FLAT WHILE
RATES HAVE INCREASED OR VERY
SIMPLE. YOU ADD MORE SOLAR
CUSTOMERS. THEY COME OFF THE
SYSTEM. THEY STOP PAYING INTO
THE REVENUE POT AND THE SMALLER
POT POOL OF RATEPAYERS HAVE TO
PAY HIGHER RATES TO MAKE UP THE
DIFFERENCE FOR ALL THE FIXED
COSTS. HENCE THE NEED FOR A
FIXED CHARGE. THANK YOU VERY
MUCH. GOOD AFTERNOON. MY NAME IS
DOCTOR J NELSON WITH
CALIFORNIANS FOR GREEN NUCLEAR
POWER. UM CHAIR CODY PETRI
NORRIS WAS QUOTED ON IN A
JANUARY 26TH 2024 POLITICO
ARTICLE. I THOUGHT IT WAS KIND
OF SHOCKING THAT A COUPLE OF
WEEKS BEFORE THE BUDGET DEADLINE
, OUR STATE AGENCIES REALIZED
BEEP. UH, IF WE TAKE DIABLO
OFFLINE, WE'RE NOT GONNA HAVE
ENOUGH ENERGY TO KEEP THE LIGHTS
ON. THEN WE GO TO A MAY 24TH
2011 èC èC S¼ Tð REPORT THAT'S
THE CALIFORNIA COUNCIL ON
SCIENCE AND TECHNOLOGY. AND I
KNOW YOU HAVE A FELLOW IN AS
PART OF YOUR STAFF RIGHT NOW,
UH, COMMISSIONED BY THE èC E
èC NUCLEAR POWER CAN PROVIDE
CONSTANT, RELIABLE EMISSION FREE
ENERGY WITH A MUCH LOWER AND
MORE EASILY MET REQUIREMENT FOR
LOAD BALANCING ROUGHLY 30. NEW
NUCLEAR POWER PLANTS COULD
PROVIDE TWO THIRDS OF
CALIFORNIA'S ELECTRIC POWER IN
2050. FRANCIS EXAMPLE, SHOWS THE
BENEFIT OF FOLLOWING THE SCIENCE
AND INSTEAD OF FOLLOWING THE
LAVISHLY FUNDED PACIFIC CORP
LOBBYIST MIND YOU LAST YEAR
PACIFIC CORP. UH WAS NUMBER FIVE
IN LOBBYING IN CALIFORNIA. UH
WHICH LEADS CALIFORNIA AWAY FROM
DIABLO CANYON TO EXPENSIVE AND
POLLUTING WYOMING COAL FIRED
GENERATION CMS EMAILS TO THE
COMMITTEE AND STAFF. THE RECENT
SHAMEFUL DENIAL OF èC GMP S¼
èC PU èC INTERVENOR. WAS ALSO
A LIKELY CONSEQUENCE OF THAT
LOBBYING, WHICH WE LOOK FOR
REDRESS. THANK YOU FOR YOUR
TIME. GOOD AFTERNOON CHAIR AND
MEMBERS ELISE FONDRE FROM
TRENTON PRICE CONSULTING. WE
REPRESENT THE CLIMATE CENTER, UM
APPRECIATED. ASSEMBLY MEMBER
CONNOLLYS COMMENTS ABOUT HOW
BEHIND THE MERE RESOURCES CAN
ADDRESS SOME AFFORDABILITY AND
WANTED TO JUST LIKE THE COMPANY
TO CONSIDER THE UNTAPPED
POTENTIAL OF LOWER RATES USING
BIDIRECTIONAL ELECTRIC VEHICLES,
AND THERE IS A BILL IN THIS BODY
, S¼ B 23 THREE BY SENATOR
SKINNER, WHICH CALLS FOR LIGHT
DUTY PASSENGER VEHICLES AND
SCHOOL BUSES TO BE BIDIRECTIONAL
BY 2035. THERE'S A ELECTRIC
POWER RESEARCH INSTITUTE HAS
ESTIMATED THAT VIA TO GRID
TECHNOLOGY COULD RESULT IN OVER
1 BILLION IN ANNUAL SAVINGS FOR
RATEPAYERS, AND THE PUBLIC
ADVOCATE'S OFFICE HAS DONE
SIMILAR STUDIES THAT SHOW SOME
OF THESE SAVINGS CAN BE PASSED
ON. SO JUST WANNA KIND OF ADD
THAT TO THE TOOLBOX OF SOLUTIONS
THAT THIS COMMITTEE CONSIDERS
THANK YOU. THANK YOU. A PET
PARROT. SO STOCKTON RESIDENT UH,
SEVEN YEARS OLD ADVOCATE FOR
THE, UH, SYSTEMICALLY OPPRESSED
PEOPLE IN THAT AREA. I ON A
FIXED INCOME IN FRONT OF GOD AND
NEW PEOPLE. I WILL HUMBLY SAY MY
INCOME IS LESS THAN $1200 A
MONTH. HAVING THAT EXTRA
ADDITIVE WILL NOT WORK FOR A LOT
OF US. I WAS FORTUNATE I AM A
LOW INCOME. I WAS ABLE TO GET
SOLAR PUT ON MY ROOF. UH GANG TO
GRID ALTERNATIVES. IT HAS
BROUGHT MY UTILITIES DOWN AS MY
ELECTRICITY WENT DOWN TO 5 TO
$11 A MONTH MY GAS WENT UP, BUT
WE'RE WORKING WITH IT. IT IS
STILL UNDER $30 EVERY MONTH AND
BECAUSE IT IS ONLY ME AND I
STILL USE THE HANGERS OUTSIDE TO
èC DRY MY CLOTHES I DON'T DO
TRUE, BUT I DON'T GET INCENTIVES
BECAUSE I WAS GIVEN A PROGRAM
PART. I JUST WANT YOU TO KNOW
THAT I CANNOT IN A LOT OF OTHER
PEOPLE CANNOT AFFORD EITHER. I'M
GONNA GIVE UP FOOD OR I'M GONNA
GIVE ROB PETER TO PAY PAUL OR AT
70 YEARS OLD. I HAD TO GO FIND
ME A HUSTLE SEVEN YEARS OLD.
GREAT GREAT GRANDMOTHER. WHY ARE
WE PUTTING INTO OUR OURSELVES
INTO THIS POSITION? THERE'S
OTHER PEOPLE THAT HAVE IT WORK
TO BE HOMELESS. WHY WOULD THEY
MOVE INTO A HOUSE WHEN THEY GOT
A DEAL WITH ELECTRICITY AND
OTHER UTILITIES? YOU KNOW WHAT
WE HAD TO FIND A SOLUTION WHERE
OTHER PEOPLE ARE ALL TAKING CARE
OF THIS. I WANT YOU TO LOOK AT
GOAL NUMBER ONE S¼, Tð G S¼
GOALS 13 AND SEVEN BECAUSE THAT
IS WHAT THIS WOULD CAUSE A
DOMINO EFFECT TO IT WILL ADD TO
POVERTY. IT WILL ADD TO
HOMELESSNESS AND WE'RE JUST
GONNA BE CHASING OUR TAILS.
THANK YOU. HØI ROB HAWLEY FROM
SAN JOSE. THE FLAGSTAFF STUDY
SHOWS THE DAMAGE A HUGE UTILITY
TAX WOULD DO THE WORKING POOR
WILL BE END UP SUBSIDIZING THE
WEALTHY WHO CAN AFFORD HIGHER
ELECTRIC USE. THAT'S WHY OVER
200 ORGANIZATIONS OPPOSE THE
UNBOUNDED UTILITY TAX. A B 1999
RESTORES THE BALANCE AND ENSURES
A FAIR PAYMENT FOR ELECTRICITY.
AND YET IT PRESERVES THE
INCENTIVE TO CONSERVE
CONSERVATION IS STILL IMPORTANT,
SINCE IT LIMITS THE SIZE OF THE
ELECTRIC SYSTEM, AND HENCE HOW
MUCH IT COSTS. AND AS YOU'VE
HEARD TODAY, THE UTILITIES
OTHERWISE ARE UNDER NÓ INCENTIVE
TO LIMIT THE SIZE OF ELECTRICAL
SYSTEM. SOLAR AND, OH, BY THE
WAY, SOLAR USERS ALREADY PAY A
MINIMUM FEE. AND WHEN OUR N EM
REIMBURSEMENTS ALREADY HAVE, UH
UH, PUBLIC PURPOSE PROGRAM
DEDUCTIONS FROM IT. SO UH, OUR
N M, UH, PEOPLE ARE ALREADY
STILL PAYING INTO THE PUBLIC
PROGRAM. 1999 REMOVES THE ISSUE
FROM THE UTILITY BY A èC P èC
AND RESTORES CONTROL TO YOU, OUR
ELECTED REPRESENTATIVES. WHEN
GROUPS SUCH AS DIVERSE AS
HOWARD, JARVIS AND GREENPEACE
AGREE ON SOMETHING YOU SHOULD
LISTEN. GOOD AFTERNOON CHAIR AND
COMMITTEE MEMBERS. THANK YOU FOR
THE OPPORTUNITY TO SPEAK TODAY,
SO I'M A LITTLE TALL. IS IT
POSSIBLE TO THANK YOU SO MUCH. I
APPRECIATE THE HELP. UM I AM
REIMAGINED POWERS, SENIOR POLICY
ANALYST. MY NAME IS ALISON
HILLIARD. UM THE èC P èC S¼
OWN REPORT ON AFFORDABILITY OF
THE GRID OF THE FUTURE FROM 2021
FOUND THREE MAIN REASONS FOR
RATES RISING AND THE MAIN REASON
IS TRANSMISSION SPENDING. THE
SECOND IS CALIFORNIA. IOU'S
INVESTOR OWNED UTILITIES RETURN
ON EQUITY FOR INFRASTRUCTURE,
WHICH WAS DISCUSSED TODAY IS THE
HIGHEST IN THE NATION AND ALSO
WILDFIRE MITIGATION. UM, THE
TRANSMISSION THE REPORT SHOWED
THAT, UM THERE ARE MANY SELF
APPROVED PROJECTS WITH MASSIVE
COST OVERRUNS THAT REPAIRS ARE
ON THE HOOK FOR I Ó U'S RETURN
ON EQUITY. THE IOS JUST REPORTED
RECORD PROFITS AND THE PUBLIC
PEOPLE ARE RIGHTFULLY OUTRAGED
THAT STAKEHOLDERS ARE PROFITING
WHILE THEY ARE GETTING, UM,
WHILE THEY'RE THEY, THE
RATEPAYERS ARE GETTING GOUGED
WITH RATE INCREASES. FOR WHILE
MINE WILDFIRE MEDICATION. MANY
OF THOSE COSTS ARE NOW STARTING
TO HIT RATE FACES AS WELL. AND
WE GO INTO 2024. THE SOLUTION IS
DISTRIBUTED ENERGY RESOURCES
LIKE ENERGY EFFICIENCY. UM AND
ON SITE SOLAR. THE LEGISLATURE
NEEDS TO FOCUS ON DEPLOYING MORE
DS AND SPENDING LESS ON
TRANSMISSION INFRASTRUCTURES,
WHICH WILL HELP BRING RATES DOWN
FOR EVERYONE WHILE ALLOWING THE
STATE TO ADOPT TO A CHANGING
CLIMATE AND MEET OUR
DECARBONISATION RELIABILITY AND
ELECTRIFICATION GOALS. ALSO LO
LOCALIZATION OF ENERGY
INFRASTRUCTURE IS ANOTHER
SOLUTION THAT SHOULD BE
CONSIDERED. WE URGE THE
LEGISLATURE TO ADOPT UM,
POLICIES THAT HELP ADVANCE LOCAL
AND COMMUNITY ENERGY SOLUTIONS.
THANK YOU FOR YOUR TIME TODAY.
THANK YOU. HELLO GOOD AFTERNOON.
UM TO ALL THE COMMITTEE MEMBERS,
ASSEMBLY MEMBERS. OK, THANKS.
I'M NOT AS TALL. UM MY NAME IS
ESPERANZA VELMA. I AM THE CO
FOUNDER OF THE COALITION FOR
ENVIRONMENTAL EQUITY AND
ECONOMICS. AND SO I REPRESENT
OVER THREE 100 ENVIRONMENTAL
JUSTICE GROUPS STATEWIDE,
INCLUDING GREEN, THE CHURCH AND
SO AFFORDABILITY IS A GREAT
CONCERN OF OURS WITH OUR MEMBERS
. AND SO WE, UM, WE ADAMANTLY
OPPOSE ANY ADDITIONAL PROPOSED
FIXED CHARGES FOR OUR RESIDENTS,
PARTICULARLY WHEN THERE IS NÓ
CAT. SO THE ADDITIONAL $30 A
MONTH FOR OUR LOW MIDDLE INCOME
RESIDENTS WILL BE AN EXTREME
BURDEN. WE INSTEAD ADVOCATE FOR
A COST EFFECTIVE FIXED CHARGE OF
$10 FOR EVERYONE $5 ALLOCATED
FOR CAREEN FARR CUSTOMERS, AND
THIS IS THROUGH THE ASSEMBLY
BILL 1999. AND THEN THE QUESTION
WAS ASKED. WHAT'S THE NATIONAL
AVERAGE? THE NATIONAL AVERAGE IS
$11. MOREOVER THE TRUE CHALLENGE
LIES IN THE PROLIFERATION OF
LONG DISTANCE TRANSMISSION LINES
, WHICH WAS DISCUSSED WHICH
EXASPERATES THE LACK OF, UM
ROOFTOP SOLAR. INVESTING IN
ROOFTOP SOLAR NOT ONLY MITIGATES
TRANSMISSION LINE COSTS BUT ALSO
BENEFITS ALL RATEPAYERS,
REGARDLESS OF SOLAR ADOPTION,
WHILE EMPOWERING INDIVIDUALS
SUCH AS PAT FROM SOUTHSIDE
STOCKTON, I JUST SPOKE IN
CONCLUSION. WE URGE OUR
COMMITTEE TO PRIORITIZE
EQUITABLE SOLUTIONS, SUCH AS
EXPANDING SOLAR ACCESS TO
RESIDENTS, APARTMENTS, SCHOOLS
AND CHURCHES ACROSS THE STATE.
BY DOING SO, WE CAN TACKLE
AFFORDABILITY CONCERNS WHILE
ADVANCING ENVIRONMENTAL JUSTICE,
SUSTAINABLE AND EQUITABLE
SOLUTIONS AND, UM TO THE
FLAGSTAFF RESEARCH COMPONENT
THERE, UM, THE 1200 FIF 50
SQUARE FOOT HOME. WE HAVE
INFORMATION, SO IF YOU WANT
FOLLOW UP WITH US. THAT KIND OF
GIVES YOU, UM, A CLIFF. NOTE
VERSION OF THE 200. PLUS UM,
PAGES OF THAT REPORT AGAIN.
THANK YOU FOR ATTENTION IN THIS
MATTER. GOOD AFTERNOON. LAURA
PAR WITH SOUTHERN CALIFORNIA
EDISON EDISON IS COMMITTED TO
DELIVERING SAFE, RELIABLE AND
AFFORDABLE ELECTRICITY TO HELP
THE STATE ACHIEVE ITS GOALS OF
CARBON NEUTRALITY, AND WE AGREE
WITH MANY OF THE SPEAKERS HERE
TODAY DISCUSSING THE ENERGY
TRANSITION AND HOW WE CAN MAKE
THAT HAPPEN FOR ALL HOUSEHOLDS
AND MAKE SURE WE HAVE AN ACTUAL
SAVINGS. SO ESPECIALLY AS WE
MOVE FORWARD HERE, SO WE WANNA
CONTINUE TO HAVE THESE
DISCUSSIONS WITH THE BROAD VIEW
OF GASOLINE, NATURAL GAS AND
ELECTRICITY, SO AS YOU CAN
CONTINUE TO HAVE THESE HEARINGS.
WE HOPE THAT WE COULD KEEP THAT
IN MIND FOR OUR CUSTOMERS. THANK
YOU. THANK YOU. GOOD AFTERNOON,
MADAM CHAIR. MY NAME IS DÂN.
JACOBSON WITH ENVIRONMENT
CALIFORNIA I THINK THREE QUICK
POINTS, UH, ON PROGRAMS THAT WE
CAN IMPLEMENT QUICKLY. THAT
MIGHT NOT BE, UM, THE SILVER
BULLET BUT MIGHT BE PART OF A
SILVER BUCKSHOT THAT WE CAN DO
FOR RATES. THE FIRST WOULD BE
GRID ENHANCING TECHNOLOGIES. A
COUPLE PEOPLE HAVE TALKED ABOUT
THAT. I CAN'T EMPHASIZE ENOUGH
THAT THIS IS A SMART WAY, AND WE
NEED TO LOOK INTO THAT TO MAKE
SURE THAT WE'RE TAKING ADVANTAGE
OF IT. SECOND SIMILAR TO GRID
ENHANCING TECHNOLOGIES, BUT IS
ADVANCED CONDUCTORS. HOW CAN WE
USE THIS NEW TO ENSURE THAT
WE'RE BRINGING ON CLEAN,
RENEWABLE ENERGY. SAVE US ALL.
MONEY HELP PROTECT US FROM
WILDFIRES. THIRD IS LOOKING AT
SOME OTHER PLANNING PROCESSES
THAT THE PUBLIC UTILITIES
COMMISSION HAS RESOURCE ADEQUACY
IS A SMART ONE TO LOOK AT. AND
TO SEE WHAT KIND OF CHANGES CAN
WE MAKE THERE TO ENSURE THAT
WE'RE DOING THE SMARTEST
PLANNING? THANK YOU FOR YOUR
LEADERSHIP. HØI MY NAME IS
SUSANNA PORTER. I'M A MUSIC
TEACHER FROM BERKELEY. UM I'D
LIKE TO SAY THAT THE SINGLE
GREATEST DRIVER OF HIGH COSTS IS
THE LONG DISTANCE POWER LINES, A
TRANSMISSION AND DISTRIBUTION.
UM, A BIG UTILITY TAX, BECAUSE
LET'S BE CLEAR. THAT'S WHAT THE
INCOME GRADUATED FIXED CHARGES.
IT IS A UTILITY TAX. IT MAKES
THE MATTER WORSE. UM IT PUNISHES
PEOPLE WHO CAN SERVE ENERGY WHO
LIVE IN APARTMENTS AND SMALL
HOMES, AND IT DOES ABSOLUTELY
NOTHING TO STOP BIG UTILITIES
OUT OF CONTROL COSTS. FOR
EXAMPLE, A SINGLE MAKING $40,000
A YEAR FALLS OUTSIDE OF THE CARE
FARRE RANGE AND HER BILL WOULD
BE DOUBLED WITH THE FIXED INCOME
. GRADUATED FIXED CHARGE. UM, SO
PLEASE DON'T TAKE YOUR CUES FROM
THE SAME PEOPLE WHO GOT US INTO
THIS MESS OVER THE LAST 20 YEARS
. BIG UTILITIES. IF THE
LEGISLATURE IS SERIOUS ABOUT
SOLVING THIS PROBLEM, THEY NEED
TO TAKE CONTROL AND PASS STRONG
POLICIES THAT REDUCE SPENDING ON
LONG DISTANCE POWER LINES. YOU
NEED TO MAKE SURE WE BUILD FEWER
GRID INFRASTRUCTURE PROJECTS AND
USING LOWER COST METHODS AND
GUESS WHAT MORE ROOFTOP, SOLAR
AND BATTERIES. HELP YOU DO THAT,
RATHER THAN VILIFYING ROOFTOP
SOLAR. AS SO MANY HAVE HERE, YOU
SHOULD SEE IT AS A SOLUTION TO
YOUR PROBLEM. BY THE WAY, IT'S
ONLY 2 MILLION SOLAR ROOFTOPS
OUT OF 22 MILLION RATEPAYERS. SO
THAT'S ONLY 10% OF CALIFORNIANS.
AND IF YOU THINK THAT THEY'RE
TAKING MONEY AWAY FROM OTHER
PEOPLE SHOW A NEW CHART FOR
WHAT'S HAPPENED SINCE ROOFTOP
SOLAR INSTALLATION PLUMMETED
LAST YEAR AFTER N M THREE WAS
INSTALLED. OUR RATES KEEP GOING
UP, AND YET SOLAR INSTALLATION
IS GOING DOWN SO THAT THAT PUTS
A BULLET THROUGH THAT ARGUMENT.
IN ANY CASE, PLEASE NÓ INCOME,
GRADUATED FIXED CHARGE AND LET'S
KEEP TOP SOLAR GROWING. THANK
YOU SO MUCH. GOOD AFTERNOON,
MADAM CHAIR MOLLY KROLL WITH
AMERICAN CLEAN POWER ASSOCIATION
. THANKS FOR THE EXCELLENT
DISCUSSION TODAY. ELECTRIC
PORTABILITY IS OBVIOUSLY A HUGE
ISSUE. WE HEARD SOME GOOD IDEAS
ABOUT WAYS TO ADDRESS THAT, SUCH
AS SHIFTING COSTS FROM
RATEPAYERS USING GGRF FUNDS OR
OTHER METHODS. UM, BUT WE CAN'T
LET THIS ISSUE BE A REASON TO
SLOW DOWN OUR CLEAN ENERGY
TRANSITION AND ESPECIALLY
NECESSARY UPGRADES IN THE
DISTRIBUTION SYSTEM AND
TRANSMISSION INFRASTRUCTURE ARE
ESSENTIAL TO ENABLING LOAD
GROWTH, WHICH AS PRESIDENT, UH,
REYNOLDS POINTED OUT, WE
ULTIMATELY REDUCE RATES AND FOR
PROTECTING RELIABILITY. WE ALSO
NEED TO BE AWARE OF THE COST OF
INACTION. UM, AND THE RISK OF
FUTURE. RELIABILITY AND CLIMATE
EMERGENCIES, WHICH, IF WE DEAL
WITH THOSE WITH LAST MINUTE
SOLUTIONS, WHETHER THAT'S
EXPENSIVE PEAK IMPORTED POWER OR
EXTENDING OLD POWER PLANTS THAT
ARE COSTLY WILL UNDOUBTEDLY BE
MORE EXPENSIVE THAN DOING THE
LONG TERM PLANNING TODAY IN A
COST EFFECTIVE MANNER. THANK
YOU. UM GOOD AFTERNOON, MADAM
CHAIR. UM AND, UH, THE COMMITTEE
. THANK YOU SO MUCH FOR THIS,
UH, ROBUST DISCUSSION TODAY. UM
PGE IS VERY COMMITTED TO A SAFE
AND RELIABLE SERVICE THAT WE, UM
OFFER OUR CUSTOMERS AT THE
LOWEST POSSIBLE COST. UM
POSSIBLE. UM AND, UM, I JUST
WANNA POINT OUT TODAY AS
PRESIDENT REYNOLDS SAID, UM, OUR
GENERAL RAPE CASE WAS RECENTLY
APPROVED. UM, AND SO WERE
SEVERAL COST. MEMO ACCOUNTS, UM,
HITTING BILLS ALL AT ONCE, AND
WE KNOW MANY OF OUR CUSTOMERS.
THEY ARE EXPERIENCING A REAL
BURDEN AND HARDSHIP. WE'RE
LOOKING FOR COST EFFECTIVE
SOLUTIONS. WE HOPE THAT OVER THE
NEXT FOUR YEARS OF INSURANCE
SOLUTION THAT WE'VE, UM UH,
WORKED ON WITH RATE PAYER
ADVOCATES WILL SAVE OUR
CUSTOMERS. $1.8 BILLION. WE ARE
LOOKING FOR FEDERAL AND OUTSIDE
FUNDING. UM, AND WE'RE GLAD TO
HEAR THAT THERE'S STILL UM, A
CALL. FOR REMOVING COSTS FROM
BILLS. WE DO SUPPORT THE FIXED
CHARGE TO REDUCE RATES, UM FOR
OUR LOW INCOME CUSTOMERS AND
BRINGING EQUITY UM TO THE BILL
AND TO ENSURE ELECTRIFICATION
REMAINS COMPETITIVE. BUT I CAN'T
. I WOULD BE REMISS IF I DIDN'T
TRY IF I DIDN'T SAY TO CORRECT
THE RECORD, UM CURRENTLY, OUR
CUSTOMERS COST ON THEIR BILL FOR
UNDERGROUND IS VERY MINIMAL.
IT'S LESS THAN A PENNY ON THE
BILL CURRENTLY, AND WE NEED TO
BE THOUGHTFUL THAT ONE SIZE DOES
NOT FIT ALL AND AS WE LOOK AT
UTILITIES ACROSS THE STATE
UNDERGROUND IN COSTS HAVE
DISCRETE DECREASED OVER TIME DUE
TO INNOVATIONS IN OUR PROCESS.
UM WE JUST HAVE A LOT OF TREES
IN PING IN THESE AREA. UM AND
CONTINUED VEGETATION MANAGEMENT
DOES COME AT A COST. UM, THE
LEGISLATURE PASSED S¼ B 884,
RECOGNIZING THAT UNDERGROUND IS
LONG TERM AND PERMANENT. UM
CUSTOMERS PAY THOSE COSTS OVER
TIME. LIKE A MORTGAGE. WE CAN
CONTINUE PAYING ONE POINT THREE
BILLION DOLLARS. ON VEGETATION
MANAGEMENT ON ANNUALLY, UM,
ALONG WITH SHUT OFF OPTIONS LIKE
PSPS, OR WHAT'S CALLED WHAT
EVERYONE'S CALLING FAST TRIP. UM
TODAY, SO, UM AT PROFESSOR WAR,
SAID. THERE'S A LOT OF DIFFICULT
CHOICES. UM AND I WOULD JUST
POINT OUT THAT PG AND E UM
SHAREHOLDERS LOOK LIKE ALL OF US
. MOST OF OUR SHAREHOLDERS ARE
LARGE MUTUAL FUNDS, PENSION
FUNDS. THEY LOOK LIKE ALL OF US,
AND THEY'RE PUTTING THEIR MONEY
UP FRONT TO INVEST IN A VERY
CAPITAL. INTENSE SYSTEM AND, UM,
OUR CREDIT RATING IS STILL
SUFFERING. AND SO WE ARE, UM,
CLIMBING BACK TO A HIGHER CREDIT
RATING TO BRING AFFORDABLE
FINANCING THAT CAN BE PASSED ON
TO ALL OF OUR CUSTOMERS. SO I
THANK YOU FOR THE DISCUSSION
TODAY AND LOOK FORWARD TO
TALKING ABOUT MANY OF THE
PROPOSALS THAT WERE DISCUSSED
TODAY. THANK YOU. AH, MADAM
CHAIR, UH, JOHN WHITE WITH THE
CENTER FOR ENERGY EFFICIENCY AND
RENEWABLE TECHNOLOGIES AGAIN.
THANK YOU FOR AN EXCELLENT
HEARING COVERED A LOT OF GROUND
A COUPLE POINTS I'D LIKE TO MAKE
, UM, TRANSMISSION INVESTMENTS
ARE ESSENTIAL FOR THE BUILD OUT
OF THE CLEAN ENERGY GRID THAT WE
ALL WANT AND LOAD GROWTH IS
IMPORTANT AND LOAD GROWTH IS
CATCHING UP WITH US. WE HAVE
INCREASED ARTIFICIAL
INTELLIGENCE DEMANDS DATA
CENTERS BITCOIN SO FORTH AND
PLAY LIKE, UH, SANTA CLARA. UM
VALLEY ARE GROWING LEAPS AND
BOUNDS. SO WE HAVE TO KEEP UP
WITH THAT GROWTH. WE ALSO NEED
TO FIND WAYS TO IMPROVE
TRANSMISSION MORE QUICKLY. IT
TAKES TOO LONG COSTS TOO MUCH.
WE'VE GOT A PROPOSAL BEFORE THE
PU èC FOR A JOINT PROPOSAL,
WHICH WE THINK IS IMPORTANT. AND
LASTLY, I AGREE WITH MY FRIEND
DÂN JACOBSON ABOUT, UH, GRID
ENHANCING TECHNOLOGIES, AND WE
CONDUCT DURING OUR OUR SORT OF
LIKE ENERGY EFFICIENCY FOR THE
GRID. GET MORE OUT OF THE THING
RIGHT AWAY IN THE SAME POWER
LINES. IF YOU ADD SOME OF THESE
THINGS, AND THEY'RE RELATIVE
COST EFFECTIVE. SO THANK YOU.
HØI. GOOD AFTERNOON, MADAM CHAIR
AND THANK YOU SO MUCH FOR
STICKING AROUND. I WISH MORE OF
YOU. UM ANYWAY, MY NAME'S YVETTE
CARLO. I LIVE HERE IN LAND PARK
AND I'VE HAD SOLAR, UH, ROOF ON
THE SOLAR PANELS ON MY ROOF AND
THE BAY AREA, SO I DO HAVE THAT
EXPERIENCE AS WELL AS BEING THE
SMUG DISTRICT. I WASN'T PLANNING
ON TALKING TODAY, SO I'M GOING
TO BE FOLLOWING UP WITH EVERYONE
MORE ARTICULATELY, BUT I'M HERE
TO DEFEND ROOFTOP SOLAR AND Ó
OBVIOUSLY AGREE WITH SOME OF THE
PEOPLE WHO WERE FROM THE PUBLIC
ACTUAL PUBLIC ADVOCATES THAT ARE
TALKING ABOUT IN REGARDS TO, UM
THE BENEFITS THAT IT HAS. WE PAY
A FEE. WE DO PAY AN
INFRASTRUCTURE FEE FOR IT. WE
ALSO, UM THE ONLY SUBSIDY THAT
WE GET OR HEAD GOT WAS FOR A
FEDERAL SUBSIDY. SO THERE WERE
NÓ CALIFORNIA SUBSIDIES THAT I
AM AWARE OF THAT HAVE GONE INTO
ANYONE WHO'S GOTTEN SOLAR IN THE
LAST 1015 YEARS. UM SO S¼ Dð G,
AND HE MADE A COMMENT ABOUT THEY
PAY A DOLLAR FOR A RESOURCE AND
THEN THEY SELL IT FOR A DOLLAR.
I CAN ASSURE YOU, THAT'S NOT
TRUE. IT TOOK ME A LONG TIME TO
FIND OUT FROM PG AND E WHEN WE
HAD OUR PANELS IN SAN FRANCISCO
THAT THEY PAID US FOUR CENTS
KILOWATT HOUR. TURNED AROUND AND
SOLD IT FOR 35 CENTS. TO ME.
THAT'S NOT A SUBSIDY TO THIS. IT
TO US. WE DON'T GET MONEY FROM
IT. IT'S A NET METERING. THAT'S
WHAT NET METERING WAS ALL ABOUT.
WE DON'T GET MONEY FOR EXCESS.
ELECTRONS THAT ARE PUT ONTO THE
GRID. THOSE ELECTRONS ARE ARE
SOMETHING THAT THOSE UTILITIES
DO NOT HAVE TO PAY FOR, AND THEY
TURN AROUND AND SELL THEM. THE
CAPITAL COSTS ARE BORNE BY THE
PEOPLE WHO PUT THE PANELS ON THE
ROOF. THEY DON'T HAVE TO GO
THROUGH EIR, UH, CUES AND DELAYS
IT IT IT'S EXTREMELY BENEFICIAL
TO HAVE SOLAR PANELS PUT ON BY
PRIVATE RESIDENTS ON THEIR OWN
PRIVATE LAND WITHOUT HAVING TO
ENTER INTO EXPENSIVE CONTRACTS
OR HOW THESE DELAYS SO I DO FEEL
THAT SOME OF THE PANELS WE'RE
TALKING A LITTLE BIT ABOUT ON
BOTH SIDES OF THEIR MOUTH,
SAYING IN SUMMER, YOU KNOW
THERE'S GONNA BE HIGH
ELECTRICITY RATES FOR PEOPLE IN
THE CENTRAL VALLEY AND I'M
ABSOLUTELY HAVE BIG CONCERNS FOR
THAT. SOLAR IS, WHEN'S THE BEST
TIME THAT'S GENERATED IS IN
SUMMER TIME AND SO YOU WOULD BE
ABLE TO OFFSET THOSE ELECTRIC
THOSE THOSE NEEDS BY HAVING MORE
SOLAR UP AND FAST. THE GENTLEMAN
FROM TURN WAS SAYING HOW QUICKLY
UH, APPLICATIONS HAD HAD COME
ONLINE. THERE WERE 20 3% IN
THEIR JURISDICTION. THAT'S
PHENOMENAL. WE SHOULD KEEP
ACCELERATING THAT WE NEED TO
KEEP ENCOURAGING THAT AS THE
FASTEST, CHEAPEST WAY TO GET THE
ELECTRICITY THAT CALIFORNIA IS
GEARING UP FOR, SO I FEEL LIKE
THE UTILITIES SAY THEY WANT
COMPETITION, BUT THEY'RE AFRAID
OF COMPETITION THAT THEY DON'T
HAVE DIRECT CONTROL OVER WITHOUT
PU èC, OR LEGISLATIVE
INTERFERENCE. SO THANK YOU FOR
THIS CONVERSATION. I LOOK
FORWARD TO ARTICULATING THIS
MORNING IN A FOLLOW UP. THANK
YOU. ROBERT STARKS. DEAD, UH, I
LIVE IN BERKELEY. UM I WAS
CONCERNED ABOUT, UH, A B TWO Ó
FIVE AND THE PROVISIONS IN IT,
INCLUDING, UM UH, THE EFFORT TO
SWITCH TO A INCOME, GRADUATED
FIXED CHARGE OR JUST A FIXED
CHARGE. AND I, UH, CONTACTED,
UH, REPRESENTATIVE AND WAS TOLD
WELL, UH, YOU SHOULD REALLY TALK
TO THE èC PU èC IT. IT'S UP TO
THEM NOW. WELL I'M GLAD TO SEE
THAT THE LEGISLATURE. UH DOESN'T
AGREE WITH THAT THEY'RE TAKING
CHARGE. THEY ARE GOING TO FIX
THAT PROBLEM. THEY INTRODUCED A
B 199 AND I, AS IN A FEW OTHER
SPEAKERS STRONGLY SUPPORT THAT
AND HOPE THAT THE LEGISLATURE
CONTINUES TO TAKE CHARGE OF THE
SITUATION A LOT. LEAVE IT UP TO
THE CPUC. THANK YOU. THANK YOU.
AND AS WE WRAP UP THE BUSINESS
OF TODAY'S HEARING, JUST THANK
YOU TO AGAIN TO ALL OF OUR
PANELISTS. UH, FOR YOUR TIME AND
FOR YOUR INSIGHT, UH, LOOK
FORWARD TO CERTAINLY CONTINUING
THIS CONVERSATION. MY TEAM AND
I, UH AND OTHER COMMITTEE
MEMBERS WILL BE FOLLOWING UP ON
MANY OF THE IDEAS THAT WERE
SURFACED HERE TODAY. UH, WITH
THAT, AFTER OUR MARATHON
HEARING, UH, WE ARE ADJOURNED.
THANK YOU. THANK YOU FOR CALLING
HERE.