California electricity regulators recently waived their right to oppose a petition San Diego Gas & Electric filed with the U.S. Supreme Court in its effort to get customers to pay for hundreds of millions of dollars in wildfire costs.
Most of the consumer groups that have been fighting the utility’s plan had waived their right to oppose its Supreme Court petition.
All except the owner of a small San Diego diner, who was the only party to respond to SDG&E’s Supreme Court request to hear the case by the filing deadline Friday.
Ruth Henricks, who has run The Huddle cafe in Mission Hills for decades, argued through her lawyer that the power monopoly should not be allowed to charge customers like her for mistakes that caused the deadly Witch, Guejito and Rice fires.
“Before they can obtain funds from ratepayers, public utilities in California must show the charges were ‘just and reasonable’,” Henricks’ attorney Michael Aguirre wrote in the filing. “The term ‘reasonable’ means that the acts engaged in by a utility followed the exercise of reasonable judgment.”
SDG&E has asked the court to hear its case to charge ratepayers $379 million, its share of expenses leftover from the 2007 wildfires. The rest of the $2.4 billion in fire damages was covered by insurance or third-party settlements.
Much more is at stake. If SDG&E prevails in court, it and other California power companies could be virtually indemnified against future wildfire damages, critics say.
Pacific Gas & Electric has already declared bankruptcy in the wake of billions of dollars in potential liabilities caused by power line-related fires like the Camp fire, which last year destroyed most of the northern California town of Paradise and killed 85 people.
Henricks was one of the original parties to oppose SDG&E’s application to the California Public Utilities Commission a decade ago to recover the $379 million from ratepayers.
That initial request also was opposed by the advocacy groups the Utility Reform Network, the Utility Consumers’ Action Network, the Protect Our Communities Foundation, the San Diego Consumers’ Action Network and the Mussey Grade Road Alliance.
But none of those organizations opposed SDG&E’s pleading to the high court.
SDG&E petitioned the U.S. Supreme Court after losing arguments before two California Public Utilities Commission judges, the full commission, a state appellate court and the California Supreme Court.
Utility lawyers argued that the company should be able to pass wildfire costs along to customers the same way that government can impose costs on the public.
“California’s privately owned utilities face crippling liability for damage to private property from wildfires that have become the ‘new normal’ in California,” they wrote. “The prospect of such liability has increased insurance costs, weakened credit ratings and discouraged investment in California’s privately owned utilities.”
Commission judges rejected the request to add $379 million to the SDG&E rate base on the grounds that the utility had failed to properly maintain the equipment that caused the wildfires. That decision was upheld by the commission and later by state judges.
Southern California Edison joined the legal fight late last week, filing what’s called a friend-of-the-court brief in support of SDG&E’s application to the Supreme Court.
“Respondent’s decision to not allow privately owned utilities to recover inverse condemnation losses through rates could cost utilities billions of dollars as a warming climate subjects California to increasingly severe wildfires,” Edison lawyers wrote.
Two other groups that represent investor-owned utilities and their shareholders also filed briefs supporting SDG&E and urging the U.S. Supreme Court to protect the monopolies from future losses.
The proceeding recently has taken an unusual turn.
On May 20, when utilities commission lawyer Christine Hammond filed a waiver to not oppose SDG&E’s request, she checked a box on the form stating she represents all respondents in the case. Based on that declaration, a U.S. Supreme Court clerk scheduled the SDG&E petition for a June 13 conference.
Last Thursday, after the mistake was called to the court’s attention, Hammond filed a second waiver with the box checked next to the statement: “There are multiple respondents, and I do not represent all respondents.”
But the damage was done, said Aguirre.
Usually the nation’s high court agrees to hear only a fraction of the thousands of cases presented each year. But in this case, the court has scheduled a conference and it has directed all parties in the case to file responses to SDG&E’s petition by July 1.
“Ms. Henricks has been fighting this case for 10 years successfully before the administrative law judges, the PUC, the 4th appellate district and the California Supreme Court,” Aguirre said. “Now the opportunity to have it summarily dismissed in relatively short order is gone.”
Neither Hammond nor commission spokeswoman Terrie Prosper responded to questions about the mistake.
A decision on whether the high court will hear SDG&E’s case is expected later this year.