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AB-2346 Public utilities: rates: wildfire expense memorandum accounts.(2017-2018)

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Date Published: 07/05/2018 11:46 AM
AB2346:v96#DOCUMENT

Amended  IN  Senate  July 05, 2018
Amended  IN  Senate  June 13, 2018
Amended  IN  Assembly  April 18, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2346


Introduced by Assembly Member Quirk

February 13, 2018


An act to add Section 454.85 to the Public Utilities Code, relating to public utilities.


LEGISLATIVE COUNSEL'S DIGEST


AB 2346, as amended, Quirk. Public utilities: rates: wildfire expense memorandum accounts.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations and gas corporations. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law requires the commission to authorize public utilities to establish catastrophic event memorandum accounts and to record certain costs in those accounts.
This bill would require authorize the commission, by an unspecified date, commission to authorize permit each electrical corporation and gas corporation to establish a wildfire expense memorandum accounts account for incremental unreimbursed costs relating to California wildfires that occur on or after January 1, 2015, and to record certain costs in those accounts. The bill would require the recovery in rates of those costs to be subject to review by, and the determination of, the commission, as specified. The bill would require an electrical corporation or gas corporation to notify the commission by letter within 30 days after the electrical corporation or gas corporation begins recording costs in its wildfire expense memorandum account.
Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 454.85 is added to the Public Utilities Code, to read:

454.85.
 (a) No later than _____, the The commission shall may authorize each electrical corporation and gas corporation to establish a wildfire expense memorandum account for incremental unreimbursed costs relating to California wildfires that occur on or after January 1, 2015, and to record in that account all of the following costs incurred after the start of each wildfire, excluding costs recoverable in the electrical corporation’s or gas corporation’s general rate case or recorded in the electrical corporation’s or gas corporation’s catastrophic event memorandum account pursuant to Section 454.9: 454.9, and excluding costs recoverable through any other mechanism the commission has provided to allow for recovery:
(1) Payments and costs to satisfy wildfire claims, including co-insurance coinsurance and deductible expenses paid by the electrical corporation or gas corporation.
(2) Outside legal costs incurred by the electrical corporation or gas corporation either to settle claims or to defend against claims relating to the wildfires.
(3) Increases in insurance premiums and the cost of other financial risk transfer instruments incurred by the electrical corporation or gas corporation.
(4) Increases in fire risk mitigation costs, including infrastructure hardening and vegetation management costs incurred by the electrical corporation or gas corporation. However, costs of grid hardening and vegetation management activities intended to comply with existing state law or commission regulations and costs for which recovery may be available through other commission cost recovery mechanisms shall not be recorded.
(b) The recovery in rates of those costs recorded in the account shall be subject to review by, and the determination of, the commission pursuant to Section 451.
(c) An electrical corporation or gas corporation shall notify the commission by letter within 30 days after the electrical corporation or gas corporation begins recording costs in its wildfire expense memorandum account.

SEC. 2.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.