7/30/2014
BREAKOUT SESSION
Managing Wildfire Risk and Litigation
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
MANAGING WILDFIRE RISK AND LITIGATION
Mark Bluestein Vice President/Counsel AEGIS Claims
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
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CREATING WILDFIRE RESILIENCE THROUGH PREPAREDNESS
Joe Vaccaro Electric Transmission & Distribution Project Management, Operations Manager San Diego Gas & Electric
AEGIS 2014 POLICYHOLDERS’ CONFERENCE © 2012 San Diego Gas & Electric Company. All copyright and trademark rights reserved.
Overview of SDG&E’s Service Territory
• SDG&E supplies power to 1.4 million business/residential accounts in a 4,100 square-mile service area • SDG&E overhead facilities ~ 1,800 miles of electric transmission lines and 7,000 miles of electric distribution lines. • SDG&E has developed a Community Fire Safety Program that improves power line safety, increases reliability and helps our region’s overall emergency preparedness
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Overview of SDG&E’s Service Territory
• SDG&E’s significant enhancements since 2007 Early and predictive weather information System design for both transmission and distribution systems Operational changes Supplemental inspection and maintenance practices Robust vegetation management program Support and reactive measures to aggressively pursue active fires • These changes have been made to improve safety and to reduce the potential for electric facilities to be an ignition source, and ongoing efforts will further reduce fire risk
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Identifying Risk: Increased Wildfire Activity
The map below shows portions of San Diego 2003 (Cedar Fire) County that have burned since 2000, including the Cedar Fire and all major 2007 fires. • Acres burned: 280,278 • Electric facilities destroyed: 2,820 • Electric facilities damaged: 63 • Vehicles destroyed: 148 • Deaths: 14 • Injuries: 104
2007 (All Major Fires) • Acres burned: 368,566 • Electric facilities destroyed: 2,665 • Electric facilities damaged: 117 • Vehicles destroyed: 239 • Deaths: 7 • Injuries: 127
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Fire Statistics – May 13-16, 2014
Fire Name/Size Location Start Date Circuits Affected Customers Affected
Bernardo Fire: off Nighthawk Lane, southwest of Rancho Bernardo 5/13/14 11:00 AM None 1,548 acres
Tomahawk Fire: Traveled from Naval Weapons Station, Fallbrook 5/14/14 09:45AM C300 919 customers 5,367 acres to Camp Pendleton
Poinsettia Fire: off Poinsettia Ln & Alicante Rd in Carlsbad 5/14/14 10:30 AM C589 2836 customers 600 acres
River Fire: North River Road and College Blvd., Oceanside 5/14/14 12:12 PM None 105 acres
Highway Fire: off Old Hwy 395 and I-15 in the Deer 5/14/14 1:00 PM C239, C350, C233 1164 customers 380 acres Springs area
Cocos Fire: Village Drive and Twin Oaks Road, San Marcos 5/14/14 04:00 PM C185, C182, C597 5114 customers 1,995 acres
Sterling Fire: 12900 block of I-8 Glenview 5/14/14 4:59 PM C386 1609 customers 6 acres
Freeway Fire: Naval Weapons Station, Fallbrook 5/14/14 05:43 PM None 56 acres
Pulgas Fire: Off Interstate 5 at Las Pulgas Rd, north 5/15/14 04:45 PM None 15,000 acres of Oceanside
San Mateo Fire: Talega area of Marine Corps Base Camp Pendleton 5/16/14 11:24 AM C204 1258 customers 1,500 acres
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Fire Potential: Conditions
• There is a definite drought throughout the state • We expect fire season to begin earlier than normal, with an above average risk of large fires from about July through October • Santa Ana season is not expected to be significantly windier than normal this year • Live Fuel Moisture values currently falling across the area and should become critical by mid-summer • Dead/fine fuels (grasses and such) are cured (basically dead) up to about the 3,000’ elevation and mostly dead and dying up to 4500’ • There are indications of an “El Nino” which could bring significant rainfall during the upcoming fall and winter months
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Prevention Measures – In Summary
• Pursuing a programmatic wood-to-steel replacement program • Developed the largest and most concentrated weather network of any utility. Provides 24/7 redundant 10min data stream. • Expanded QA/QC inspection and repair program covering all of FTZ • Utilizing LiDAR to survey transmission system. In 2014, seven transmission tie lines surveyed, representing 1360 poles that will be re-engineered to steel structures. • Installed and operate 198 of the latest technology for sectionalizing and safer reclosing (IntelliRupter “Pulse Closers”)
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Prevention Measures – In Summary
• Installed and operate numerous SCADA capacitors in HRFA and continue to add newest technology wireless fault indicators • Aggressive vegetation management providing for the inventory, management and trimming of over 450,000 trees within proximity to overhead power lines • Modified and improved operating procedures (such as recloser policy for fire safety) • Created a web based communication tool to inform communication infrastructure providers of potential issues for correction
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Prevention – Added Expertise and Actions
• Added four Fire Coordinators to examine and report on fires as they occur and provide meaningful insight as to conditions on a real time basis • Formed a Reliability Improvements Team (RiRAT) to focus on fire risk reduction improvements from an engineering analysis standpoint
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Prevention – Added Expertise and Actions • Hired two meteorologists to monitor and forecast all weather • Set up seasonal staging yards for faster response during high fire threat season • Using comprehensive analytics obtained through RIRAT activities, RIRAT and EDE worked together to develop a program (FiRM) that will address overload of poles together with conductor examination • In the FTZ, copper conductor will be replaced with aluminum, wood poles found to be inadequate will be replaced with steel
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Weather Network Enhancements
• 149 weather stations • Reports every 10 minutes • Redundant communications • Supports forecasting capability • All data is made public
• Additional weather stations have been strategically located in an effort to safely and reliably operate the electric system
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Conducted Cutting-Edge Fuels and Vegetation Science
• Ground-breaking science was done to assess the vegetation across San Diego and southern Orange Counties with respect to its moisture content and susceptibility to wildfire • The next generation of fuels modeling is being developed and integrated into our products which includes surface observations, satellite input and high performance computing Nelson Dead Fuel Moisture Model
Grass “Greenness” and Live Fuel Moisture
1-hr dead-fuel moisture 10-hr dead-fuel moisture 100-hr dead-fuel moisture 1000-hr dead-fuel moisture
AEGIS 2014 Live Fuel Moisture POLICYHOLDERS’ CONFERENCE
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Pushing Forward the Science of Weather Prediction – Red Flag Warning Oct 4th-6th, 2013
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Fire Potential Index (FPI)
The Fire Potential Index is a planning and decision support tool designed to reduce the risk of a wildfire while improving efficiency and reliability • Incorporates weather, live fuel moisture, dead fuel moisture, and greenness of the annual grasses • Calculated at the district level • Issued 12:30 pm daily • Used to inform operational decisions, work restrictions, resource allocation
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
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Fire Potential Index (FPI) - Components
Fire Potential = Weather + Fuels
Weather Grasses Dead Fuel Live Fuel
Model Output StatisticsNDVI Satellite Data WRF Model Fuel Sampling Program
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Fire Potential Index – as Backcasted
Border #50 Fire
Pines Fire
Cedar FireSierra Fire Angel Fire Witch Fire
18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1
FPI
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Created the Fire Potential Awareness System
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Red Flag Warning: Oct. 4th-6th, 2013
• 09/26/2013 (8 days prior) – SDG&E Meteorologists provide advanced notice of Santa Ana winds for October 4-6, 2013. • 09/30/2013 (4 days prior) – SDG&E Meteorologists forecast an “extreme” fire potential and mention the possibility of a Red Flag Warning. • 10/01/2013 (2 days prior) – The National Weather Service issues Fire Weather Watch • 10/03/2013 (1 days prior) – The National Weather Service issues Red Flag Warning
Below are the circuits and weather stations that are forecasted to exceed 56 mph: Weather Station EDO Forecast NWS Forecast Actual Gust EDO Error NWS Error Sill Hill 68 mph 43 mph 70 mph -2 mph -27 mph Boulder Creek 57 mph 40 mph 58 mph -1 mph -18 mph
Below are the circuits and weather stations that are forecasted to exceed 50 mph: Weather Station EDO Forecast NWS Forecast Actual Gust EDO Error NWS Error Buckman Springs 56 mph 34 mph 56 mph 0 mph -22 mph Crestwood 54 mph 39 mph 53 mph +1 mph -14 mph Dye Mountain 54 mph 41 mph 50 mph +4 mph -9 mph Hellhole Canyon 54 mph 32 mph 59 mph -5 mph -27 mph
EDO Meteorology Average Error: 3.2 mph NWS San Diego Average Error: 16.8 mph
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
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Santa Ana Wildfire Threat Index (SAWTi) Released to Test Group
Our Mission: Develop a tool to mitigate risks associated with extreme fire potential during Santa Ana Winds.
Our Vision: To provide a decision support tool to fire agencies and the general public to increase public safety and overall preparedness.
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Escalating Operational Measures
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Proactive Operational and Developmental Measures
• Turn-off reclosing during specified times • Mobilizing crews to pre-determined locations • De-energize for safety when necessary • Staging of washing rigs and fire crews to pre-determined locations • Prior to and throughout the event, SDG&E provides situational awareness and forecasts to Independent System Operator • Take operational actions as needed to optimize power flows
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Vegetation Management Program (VMP) – Overview
• The Vegetation Management Program (VMP) manages an inventory of 455,000 trees and 244,000 poles, of which 35,000 are “subject” poles • Approximately 175,000 trees pruned or removed annually • Approximately 100,000 trees located within the highest fire risk area • Systematic, schedule-based approach to work activities • VMP goals: safety, compliance, and reliability
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Tree-Related Outages 1996-2013 Historical Tree Outages
442 416
267
Number of Outages 111 82 56 60 61 61 59 63 31 32 25 Year
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Enhanced Readiness and Response – Air Support
• SDG&E has renewed agreements to continue to make a heavy-lift air-crane available to support fire suppression • The Air-Crane is the largest heli-tanker in the world (2,500 gallon tank or 2,000 gallon bucket. Refills in less than 45 seconds • On May 20, U.S. Forest Service announced that it is adding four additional aircraft to its next-generation firefighting fleet • 21 large air tankers and more than 100 helios • Aircraft will support over 10,000 firefighters for the 2014 wildfire season
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
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Enhanced Readiness and Response – Ground Support
Utility Fire Prevention Teams • Accompanies SDG&E crews during high fire-risk conditions • Early detection and response
Industrial Fire Brigade and Flammable Liquid Firefighting Trailers • Specialized fire suppression for SDG&E infrastructure including transformers, capacitor banks, underground vaults and other equipment
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Enhanced Readiness and Response
24x7 dedicated Emergency Operations Center More than 84 activations in 12 years Energy Crisis - Red Flag Warnings – Winter Storms –Terrorism Threat – Special Events – Firestorms 2003 and 2007 –
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Enhanced Field Readiness and Response Mobile Field Command Trailers and Satellite Phone Booths
• Bolster rapid emergency response and communications • Connect SDG&E and emergency responders with satellite communications and high-speed wireless • Communications features: internet, phone, cell phone, camera, video, TV, radios and all-in-one printing
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Education and Outreach to Public
• SDG&E works with 53 fire agencies fire safe councils, Community Emergency Response Teams (CERTs) and other community organizations • We team up with the American Red Cross, 211 San Diego, San Diego Fire Chiefs’ Association and The Burn Institute to provide resources and information on disaster preparedness
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Education and Outreach to Public
• Each year as part of the Emergency Preparedness and Safety Initiative, San Diego Gas & Electric (SDG&E) contributes more than ¾ million dollars to support local emergency preparedness and safety programs • In 2011, SDG&E charitable grants helped volunteers from the Community Emergency Response Teams (CERT) Program provide 136 CERT drills to over 3,300 active CERT members, and provided grants to local Fire Safe Councils (FSC) that directly supported 36 FSC defensible space programs, 95 FSC safety training workshops to help protect over 23,000 acres
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Real
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effort.
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DEFENSE OF WILDFIRE DAMAGE CLAIMS
Don Stone Partner Paine Hamblen LLP Spokane, WA
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Defense of Wildfire Damage Claims
• Fire suppression costs • Timber claims • Natural resource damages (NRD) Claims • HEA • IEDs • Other damage claims
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USFS Permits
• $1 million in strict liability 42 USC 1764 (1976) 36 C.F.R. §251.56(d)(2) • $>1 million in negligence Development: USFS contending pre-1976 permits have unlimited strict liability
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
BLM Permits
• $2 million in strict liability 43 USC 1764 (1976) 43 CFR. 2807.12 (2005) No strict liability for damage or injury resulting primarily from an act of war, an act of God, or the negligence of the United States, except as otherwise provided by law (43 CFR § 2807.12)
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
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Fire Suppression Costs: Defense Strategy
• Request sufficient information to evaluate Letter response / request FOIA request (Federal) PRA request (State / local) • Request in format to facilitate expedited review
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Fire Suppression Costs: Defense Strategy
• Create Basis for Challenge to Pre-judgment Interest • Compliance with USFS Claims Manual • Require Competent Evidence at Trial for What is Reasonable, Necessary and Actionable Under State Fire Suppression Cost Recovery Statutes • Create Basis for Compromise
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Natural Resource Damage (NRD) Claims
• Tort Remedies Inadequate • Federal Agencies as “Trustees” for Loss of: Scenic Rare Ecologically Significant Resources
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NRD Developments
• Habitat Equivalency Damages (HEA) • Intangible Environmental Damages (IEDs)
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
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NRD Developments
• IED’s Accepted in US v CB&I (9th Cir. CA) Has Led to State Legislation Promoted by Larger Timber interests • Use of Damage Multipliers for Trees Not to Exceed FMV • Claims Exceeding FMV Recognize Recovery for Lost Business Opportunity (Carbon Credits and Mitigation “Banks”)
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Other Damages
• Residential / structure loss • Personal property loss • Business loss claims • Vegetation loss • Evacuation cost (reverse 911) • Loss of use
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Other Damages
• Alternate living expense (ALE) • Lost rental value • Annoyance, inconvenience (trespass) • Emotional distress • PI / wrongful death
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Other Damages
• Replacement cost recognized for certain types of PD claims • Fire as “trespass” / nuisance • Damage multipliers • Agricultural loss claims (crops / pasture / orchards) • Inverse condemnation
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State Law Developments
Inverse condemnation “No property may be taken or damaged for public use without just compensation” e.g. Article 1 § 19 California Constitution
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Inverse Condemnation
• Allows recovery for Fair market value of the property taken Actual attorney rees Actual costs / expert witness rees Prejudgment interest
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Inverse Condemnation
1. the taking or damage 2. of private property 3. for public use, 4. without just compensation 5. by a governmental entity that has not instituted formal proceedings
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Inverse Condemnation Applied to Wildfires in CA
McMahan’s of Santa Monica v. City of Santa Monica 146 Cal App 3d 683,696 (1983) Inadequate maintenance may also provide a legal basis for an inverse condemnation claim
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Thinking Outside the Box “Inverse Condemnation”
• (Cal. Pub. Util. Code §612): an electrical corporation may condemn any property necessary for the construction and maintenance of its electric plant • Should private entities be held to different standards than government entities for recovery under inverse condemnation?
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Thinking Outside the Box “Inverse Condemnation”
• Upon suit and payment of full market value for the property, can / should the utility counterclaim for ownership or a broader easement? • Can shareholders claim any taking without compensation under color of State law?
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Other Damage Developments
• Class certifications denied “Individual issues predominate” • Defensible space • Damage claims differ • Class action not superior • Emergence of “liability only” and “evacuation” class actions
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Negligence in Fire Suppression
• Actionable? • Any basis for comparative fault assessment? • A failure to mitigate damages? “No” in 9th Cir. CA, WA, MT
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Thinking Outside the Box: Defensible Space
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Wildfire Defense Team
• Experienced legal counsel • Engineer(s) EE mechanical • Metallurgist • Photogrammatrist • Forester / arborist • Forest / plant pathologist / etymologist
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Wildfire Defense Team
• Range management Weed control Invasive species • Natural resource economist • Soils engineer • Real estate appraiser • Defensible space • Claims adjuster • Jury research consultant
AEGIS 2014 POLICYHOLDERS’ CONFERENCE
Defense of Wildfire Damage Claims
Don Stone Paine Hamblen LLP Spokane, WA
[email protected] 509.455.6000
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