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Settlement Agreement BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Investigation on the Commission’s Own Motion into the I.19-06-015 Maintenance, Operations and Practices of (Filed June 27, 2019) Pacific Gas and Electric Company (U39E) with Respect to its Electric Facilities; and Order to Show Cause Why the Commission Should not Impose Penalties and/or Other Remedies for the Role PG&E’s Electrical Facilities had in Igniting Fires in its Service Territory in 2017. JOINT MOTION OF PACIFIC GAS AND ELECTRIC COMPANY (U 39 E), THE SAFETY AND ENFORCEMENT DIVISION OF THE CALIFORNIA PUBLIC UTILITIES COMMISSION, COALITION OF CALIFORNIA UTILITY EMPLOYEES, AND THE OFFICE OF THE SAFETY ADVOCATE FOR APPROVAL OF SETTLEMENT AGREEMENT PUBLIC VERSION (ATTACHMENTS 1-7 AND 9-13 CONTAIN CONFIDENTIAL INFORMATION) AMY C. YIP-KIKUGAWA ALYSSA KOO EMILY FISHER ELLIOTT SEALS CALIFORNIA PUBLIC UTILITIES PACIFIC GAS AND ELECTRIC COMMISSION COMPANY 505 Van Ness Avenue Law Department San Francisco, California 94102 77 Beale Street, B30A Telephone: (415) 703-1327 San Francisco, California 94105 Email: [email protected] Telephone: (415) 973-4590 Facsimile: (415) 973-0516 Attorneys for the Email: [email protected] SAFETY AND ENFORCEMENT DIVISION Email: [email protected] RACHAEL E. KOSS JOSHUA HILL ADAMS BROADWELL JOSEPH & CHRISTINE Y. WONG CARDOZO MORRISON & FOERSTER LLP 601 Gateway Blvd, Suite 1000 425 Market Street South San Francisco, California 94080 San Francisco, California 94105 Telephone: (650) 589-1660 Telephone: (415) 268-7000 Facsimile: (650) 589-4062 Facsimile: (415) 772-7522 Email: [email protected] Email: [email protected] Email: [email protected] Attorneys for COALITION OF CALIFORNIA UTILITY Attorneys for EMPLOYEES PACIFIC GAS AND ELECTRIC COMPANY REBECCA VORPE CALIFORNIA PUBLIC UTILITIES COMMISSION 505 Van Ness Avenue San Francisco, California 94102 Telephone: (415) 703-4443 Email: [email protected] Attorney for the OFFICE OF THE SAFETY ADVOCATE Dated: December 17, 2019 Table of Contents I. BACKGROUND AND SUMMARY OF SETTLEMENT AGREEMENT ..................... 3 A. Procedural History and Background ...................................................................... 3 B. Parties ..................................................................................................................... 9 C. Summary of the Settlement Agreement ................................................................. 9 II. THE SETTLEMENT AGREEMENT IS REASONABLE IN LIGHT OF THE RECORD, CONSISTENT WITH THE LAW, AND IN THE PUBLIC INTEREST ....................................................................................................................... 11 A. The Settlement is Reasonable in Light of the Record .......................................... 11 1. PG&E’s Shareholder Costs as a Result of the Settlement Are Substantial and Reasonable in Light of the Record ................................. 13 2. The Required System Enhancements Are Extensive and Reasonable in Light of the Record ........................................................... 15 a. Vegetation Management .............................................................. 16 (1) Relevant Allegations ........................................................ 16 (2) Resolution ........................................................................ 16 (a) Tree Crew Training and Certificate Program ...... 16 (b) Pre-Inspector Training and Certificate Program ................................................................ 17 (c) Vegetation Management Oversight Pilot ............. 17 (d) Independent Root Cause Analysis of Fires Related to Vegetation ........................................... 18 (e) Independent Wildfire Safety Audits of PG&E’s Tree Tracker Application ...................... 18 b. Electric Facilities Inspections and Maintenance .......................... 19 (1) Relevant Allegations ........................................................ 19 (2) Resolution ........................................................................ 19 (a) Quarterly Reporting on Electric Maintenance Work ............................................... 20 (b) LiDAR Asset Analysis ......................................... 20 (c) Independent Root Cause Analysis to Consider Inspection and Maintenance Practices ............................................................... 21 (d) ISO 55000 Certification ....................................... 21 (e) Independent Wildfire Safety Audits of Overhead Distribution and Transmission Preventive Maintenance Program ........................ 22 (f) Independent Wildfire Safety Audits of PG&E’s Local Condition Assessments ............... 23 - i - (g) Development of Recommendations for GO 165 Revisions ....................................................... 23 c. Evidence Preservation and Reporting Obligations ...................... 24 (1) Relevant Allegations ........................................................ 24 (2) Resolution ........................................................................ 24 (a) Verification of Safety-Related Filings ................. 24 (b) Independent Wildfire Safety Audits of Evidence Collection and Retention Practices and Procedures ..................................................... 24 d. Community Engagement and Assistance.................................... 25 (1) Officer Safety Town Halls ............................................... 25 (2) Semi-Annual Wildfire Mitigation Meetings .................... 26 (3) Local Government Vegetation Management Data Sharing ............................................................................. 26 (4) Local Government System Hardening Data Sharing ....... 26 (5) Funding to California Foundation for Independent Living Centers .................................................................. 27 (6) Fuel Reduction Funding ................................................... 27 (7) Resilience Centers Grant Program ................................... 27 (8) Accelerating Commercialization of Non-Diesel Temporary Generation ..................................................... 28 e. Transparency and Accountability ................................................ 28 (1) Independent Wildfire Safety Audits of Shareholder- Funded System Enhancement Initiatives ......................... 29 (2) Independent Wildfire Safety Audits of PG&E Financial Data Related to Its Wildfire Safety Plans ........ 29 f. Information Gathering for Potential Wildfire Risk Mitigation ..................................................................................... 29 (1) Documentation of “Near Hit” Potential Fire Incidents ........................................................................... 29 (2) Study of Distribution and Transmission System ............. 30 B. The Settlement Agreement Is Consistent with the Law ....................................... 31 C. The Settlement Agreement Is in the Public Interest ............................................ 31 III. THE SETTLEMENT AGREEMENT COMPLIES WITH DECISION 98-12-075 ........ 34 A. Severity of the Offenses ....................................................................................... 34 1. Physical and Economic Harm .................................................................. 35 2. Harm to the Regulatory Process .............................................................. 35 B. The Conduct of the Utility ................................................................................... 36 C. Financial Resources of the Utility ........................................................................ 38 - ii - D. Totality of Circumstances in Furtherance of Public Interest ............................... 39 E. Consistency with Precedent ................................................................................. 41 1. Long Beach Power Outages OII Decision (D.17-09-024) ....................... 41 2. Huntington Beach Underground Vault OII Decision (D.17-06-028) ...... 42 3. Kern Power Plant OII Decision (D.15-07-014) ....................................... 42 4. Malibu Canyon Fire OII Decision – Settlement 1 (D.12-09-019) ........... 43 5. Malibu Canyon Fire OII Decision – Settlement 2 (D.13-09-026) ........... 43 6. Malibu Canyon Fire OII Decision – Settlement 3 (D.13-09-028) ........... 44 7. The Witch/Rice and Guejito Fire Settlements (D.10-04-047) ................. 44 8. Discussion of Precedents ......................................................................... 45 IV. REQUEST FOR EXPEDITED COMMISSION APPROVAL BY THE END OF FEBRUARY 2020 .......................................................................................................... 46 V. CONCLUSION ................................................................................................................ 46 - iii - BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Investigation on the Commission’s Own Motion into the Maintenance, Operations and Practices of I.19-06-015 Pacific Gas and Electric Company (U39E) (Filed June 27, 2019) with Respect to its Electric Facilities; and Order to Show Cause Why the Commission Should not Impose Penalties and/or Other Remedies for the Role PG&E’s Electrical Facilities had in Igniting Fires in its Service Territory in 2017. JOINT MOTION OF PACIFIC GAS AND ELECTRIC COMPANY (U 39 E), THE SAFETY AND ENFORCEMENT DIVISION OF THE CALIFORNIA PUBLIC UTILITIES COMMISSION, COALITION OF CALIFORNIA UTILITY EMPLOYEES, AND THE OFFICE OF THE SAFETY ADVOCATE FOR APPROVAL
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