Operator: Streaming.
-: Thank you very much operator.
Good morning, everyone.
We need to establish a quorum.
Will the agenda clerk please call the roll.
Clerk: Commissioner Houck.
Houck: Here.
Clerk: Commissioner Shiroma.
Shiroma: Present.
Clerk: Commissioner Rechtschaffen.
Rechtschaffen: I'm here.
Clerk: Commissioner Guzman Aceves.
Aceves: Here.
Clerk: President Batjer.
-: Here.
Thank you, we have established a quorum.
Welcome again, everyone
to the California Public Utilities Commission.
I am calling this meeting of April 22nd, 2021
public agenda number 3484 to order.
Due to the coronavirus pandemic,
and the shelter in place order,
we're conducting today's business meeting,
online and by remote participation.
The meeting is live-streamed on the CPUC website.
You can view the meeting@www.adminmonitor.com
or /ca, or /cpuc admin monitor is all one word.
Closed captioning is available in English and Spanish
through the webcast.
You can click on the green button
to select your language of choice.
Our engagement is critical to the CPUSA process.
If you wish to make a public comment,
please dial 1-808-857 ... (clears throat)
Excuse me, 1917, and enter pass code 9899501.
And press star one, you will be placed into a queue,
and the operator will take your name,
and information if appropriate.
You will be called upon to speak,
when we get to the public comment period in today's agenda.
If you encountered difficulty calling
into the public telephone line,
please email loginmeetinghelp, all one word
@cpc.ca.gov.
Before we commence with our public comments,
I would like to take a moment to recognize
that today is first day.
This year marks 51 years since the first day.
And decades of momentum and progress towards
protecting our planet.
Many of our staff work,
on the critical environmental and climate programs,
here at the PUC.
And many, are also environmental leaders
in their own communities.
I would like to publicly thank our employees,
for their continuous dedication to helping make
California a national, and a world leader
in developing clean energy programs,
and helping to ensure an energy future
that is clean, reliable, and affordable.
Environmental and climate policy affects all of us,
and climate change will continue to play an increasing role
in the quality of our lives.
Just yesterday, Governor Newsom declared
a drought emergency for the Russian River watershed,
in the Mendocino and Sonoma counties.
And the state department of water resources notes
that this is the fourth driest record
on our state wide records.
Governor Newsom, also issued an executive order
which urges Californians to recommit to the conservation
as a way of life.
One of our most valuable natural resources is water.
And while climate change has intensified the impact,
of dry conditions on our communities,
there are actions we can take as individuals,
to prepare for continued dry conditions,
as well as actions we can take as a state,
to improve our drought resilience.
The CPUC for instance, will call on the investor
owned utilities to make its customers aware
of the ongoing dry conditions,
and encourage water conservation.
To find out what you could do,
to conserve one of California's most vital resources,
please visit saveourwater.com.
Addressing these challenges will take all of us
working together.
On this first day, I welcome you to celebrate,
by considering actions you can take to care
for the environment.
No matter what you choose,
you will be part of California's efforts,
to ensure clean and a healthy future for all to enjoy.
Our president Barack Obama,
acknowledged the impact of climate change,
and the role we can play.
And, I would like to end my opening remarks
with his words, and I quote,
"We are the first generation to feel the effect
of climate change.
And, the last generation who can do something about it."
Thank you.
We now turn to the public comment, part of our agenda today.
If you wish to make a public comment,
and you have already dialed into the public comment,
telephone line, please now press star one,
to get into the public comment queue.
If you see rules, do not allow for parties in proceedings
to speak about open proceedings.
The public can make comments addressing items
on the consent and regular agenda,
as well as items not on the agenda today.
Please note, that there will not be public comments
on all items on the closed session agenda.
You'll have two minutes to speak.
Let me repeat that, you will have two minutes to speak.
You will hear a bell sound.
You will hear a bell sound, when your time is up.
Please, please be mindful of other speakers in the queue,
and keep to your alerted time.
With that guidance in mind, I welcome today's speakers.
I will now turn to the operator,
to open the public comment telephone line.
Holly, you open the line.
Holly: Thank you.
The public comment phone line is now open.
Again, if you wish to speak during the public comment period
press star one, unmute your phone,
and clearly record your name and organization when prompted.
Our first comment is from David McCord.
So you may go ahead.
David: Hi, this is David McCord, rate payer in El Sorito.
And I'm a net energy metering and proceeding.
Contrary to what the utilities would have you believe,
and the net energy metering customers
with a rooftop solar, actually subsidize the rest of us
on avoided costs, including healthcare,
upgrades of transmission lines, and so forth.
And I've read that reputable report on that.
Can't bring it up now, but I can send it to you.
Thanks.
Bye.
President: Thank you Mr.McCord.
Operator, the next caller please.
Operator: Our next caller is Dr.Patrick Kearns.
And you may go ahead.
(indistinct).
Patrick: Sorry.
My name is Patrick Kearns.
Is this audible?
-: Yes, we can hear you fine, please go ahead.
Patrick: Thank you.
Well, again, I hope that the Commissioners and their staff
have enjoyed good health, and have had the opportunity
to get vaccinated.
I would like to ask rhetorically, what is public interest?
And how is it best served?
From my high school civics class I wrote,
anything affecting the rights, health, or finances
of the public at large, the body politic.
Public interest is a common concern among citizens
in the management and affairs of the local, state,
county and national government.
The body politic and the public whale,
is the public interest being served?
When a settlement agreement allows a utility
to avoid a penalty, for a Sam Bruno explosion
resulting from a pipe rupture due to delayed maintenance.
Is the public interest served when maintenance is delayed,
even though rate payer funding has been approved?
Is the public interest served by setting rates
that creates the second largest water?
And what are you as a wastewater utility,
went up to 20% of their rate payers,
cannot afford to pay their water bill?
When my patient comes in and tells me
they can't afford their medicine
because they had to pay their water bill,
is that serving the public interest?
Is the public interest served by prioritizing social values
higher than doubling a holding company debt profile
in order to create a risk profile paralleling
an electric companies bankruptcy or pre-bankruptcy profile?
Especially when this has happened in the last 20 years.
I submit that the public interest as reflected
in many of the Commission's decisions,
prioritize social values higher, than financial interests.
When especially relevant,
that if a holding company goes bankrupt,
(beep sound) the service company is still in business,
and can still deliver electricity, or water,
or commodities for human life.
Thank you very much for listening.
Thank you for your service.
And, that is what I have to say.
-: Thank you Dr.Kern.
Operator, the next caller, please.
Operator: And I have no additional callers
in the public comment telephone line at this time.
But again, as a last reminder,
if you would like to make a comment, please press star one.
-: Has anyone joined us?
Operator: And we have no more callers
on the public comment telephone line.
-: Okay, thank you operator with no more callers on the line.
These are the following changes to our agenda, today.
Item number six will be taken up with the Consent Agenda,
and item number seven will also be taken up
with a Consent Agenda.
Okay, I will now take up the consent items.
Is there a motion?
-: So moved.
-: And a second?
Okay, motion has been made in seconded.
Will the agenda clerk please call the roll,
on the Consent Agenda.
Operator: Commissioner Houck.
-: Yes.
Operator: Commissioner shiroma.
-: Aye.
Operator: Commissioner Rechtschaffen?
-: Yes.
Operator: Commissioner Guzman Aceves?
-: Aye.
Operator: President Batjer?
-: Yes, thank you.
The Consent Agenda has been passed unanimously.
We will now take up the regular agenda items, excuse me.
And I will be introducing item number five.
This proposed decision determines that PGNE
has satisfied the stress test methodology created
by the Commission pursuant to SB 901.
And that, 7.5 billion of the 2017,
catastrophic wildfire costs are eligible,
under the stress test to be financed,
through the issuance of recovery bonds,
pursuant to SB 901 and AB 1054.
Before I provide more specifics
of what that proposed decision does,
I would like to provide a brief background,
on the landscape in which PGNE submitted its application.
With devastating wildfires ignited across California
in recent years, the legislature enacted SB 901 in 2018,
and AB 1054 in 2019.
Two among other things, address the ill effects
of the utilities exposure to financial liability
from wildfires, caused by their own electrical equipment.
The legislature determined that these skill effects
should not result in financial harm,
to rate payers, or create safety concerns.
In 2019 pursuant to SB 901,
the Commission adopted a financial stress test,
methodology for determining whether any portion
of utilities 2017 wildfire cost should be recovered
through a Commission issued financing order,
to avoid having that utility observed cost
that exceed the amount they could pay,
without harming customers or creating safety concerns.
That's a quick to this, in the proceeding considering
PGNE's plan of reorganization, for its exit from bankruptcy.
PGNE stated its intention to file with the Commission,
an application requesting the stress test methodology,
be applied to 7.5 billion in costs
it had from the 2017 wildfires.
As one of the Commissions condition,
for approval of the PGNE's plan of reorganization,
we required that any application PGNE submits
to securitize the 2017 wildfire follow through
on PGNE's commitment to the securitization fee rate
neutral on average to customers.
Today's decision determines the PGNE's request
to have fined that 7.5 billion, in the 2017 wildfire cost,
is eligible for rate payer back securitization,
under the stress test.
And fine the PGNE's proposal,
with the conditions put in place, in the decision,
meets the conditions stated in the Commission's decision
on the PGNE bankruptcy.
As a result of this condition,
a shareholder funded trust, would be established.
It is designed to offset, any fixed changes,
that would be applied to the rate payer bills.
Shareholders would fund this trust,
through an initial contribution,
of at least $1 billion, by 2021.
And a subsequent contribution of $1 billion, by 2024.
With additional shareholder contributions made to the trust,
an ongoing basis going forward, as net operating losses,
are applied to the company's future taxable income.
In addition, PGNE would be required to contribute
up to 775 million, after the ongoing shareholder
contributions are fully contributed,
if the Commission determines it is needed.
PGNE would also be required to share with rate payers,
if portion of any surplus assets,
that exist at the end of the life of the trust.
Finally, this decision also makes clear,
that the Commission does not waive the ability
to exercise its regulatory authority in the future,
to ensure the transaction remains rate air neutral,
should there be an unexpected shortfall in the trust.
Based on these requirements, I believe the decision
before today meets the requirements of the stress test,
maintains ratepayer neutrality, and will help further put,
PGNE on a path to enhance financial stability.
Which can provide lower costs to the customers,
than without the securitization.
I would like to thank the team,
that works on this technical and challenging proceeding.
I want to especially thank the excellent judge Robert Haga.
His grasp of the subject is impressive.
And while I know he has a lot of degree,
I believe he also deserves an honorary degree in economics.
I would also like to thank the legal and energy
division staff, (indistinct), Jeff (indistinct),
Candice Maury, Michael Conklin, and so many others.
And especially, I wanna thank my Begley team partner,
Commissioner Rechtschaffen,
and his wonderful Chief of Staff, Shawn Simon.
And finally, I would like to thank my wonderful
Chief of Staff, Shannon O'Rourke,
who also by the way, deserves an honorary degree in finance.
So with that, I thank you all.
And I would ask my fellow Commissioners for your support.
And I will first turn for comments
to my Begley team partner, Commissioner Rechtschaffen,
for any comments.
-: Thank you very much President Batjer.
President Batjer, you provided an excellent explanation
of the decision and the broader context.
I won't be repeating that here.
I will be supporting the decision as you know,
it's consistent with the statutory framework
that the legislature established,
and are implementing decisions concerning the stress test.
And in particular, the decisions spell out
the specific set of circumstances under which,
you can apply this stress test,
and the application here meets those circumstances.
And very importantly, the decision is consistent
with our decision approving PGNE's reorganization plan,
as being neutral to customers from a rates perspective,
that's a critical element of this decision.
The final decision that we will be voting on
and improved upon PGNE's proposal,
it includes greater assurances that the shareholder
contributions will sufficiently fund the trust.
It adds protections, as President Batjer outlined,
judge Haga's decision, revisions in response
to parties comments, clarifies that the Commission
maintains regulatory oversight,
over their consumer credit trust.
We'll continue to monitor it,
to ensure rate payer neutrality
as President Batjer mentioned.
And the decision also incorporates a reporting
requirement to provide greater transparency.
So I also wanna thank, and I express my deep appreciation
to Judge Haga, President Batjer, our staff,
and the legal division and the energy division,
for their work on this important and complicated matter.
Thank you.
-: Thank you, Commissioner Rechtschaffen.
Other Commissioners for your comments?
Who would like to go next?
I don't see anybody's hand up.
Oh, okay, Commissioner Shiroma please, go forward.
-: Thank you, President Batjer.
Thank you, Mr.Rechtschaffen.
In the course of the (indistinct) division,
I appreciate the revision that were made
in response to comments.
I thank all of the parties staff who provided
significant analysis into this proposal for the PGNE cost,
starting from the 2017 wildfires.
As you both have outlined,
it comports with the stress test methodology,
we adopted out in 2019.
It provides for the team oversight and the Commission.
It provides for the neutrality on the rate payers.
And it imports with the overall plan for PGNE
to achieve investment great ratings.
And with all of this, I also recognize too that,
PGNE itself must continue to demonstrate
that it is offering its system properly,
and using its budget as it is supposed to,
towards getting to that investment great rating.
We can also thank, the team that worked on this.
It is yet another, complicated massive analysis
requiring key understanding of finances,
and how this all comported with our stress test decisions
back in 2019, judge haga, and legal team of,
(indistinct), Michael Conklin, Jeff (indistinct),
Candice, and all of the diligent work on this effort.
Thank you.
And to both of your teams, thank you very much.
-: Thank you, Commissioner Shiroma.
Any other comments?
Darcie is that your hand up?
I can't tell.
-: No, I just wanted to thank Judge Haga, and your office,
President Batjer, and Commissioner Rechtschaffen
for all of the work on this challenging issue.
And for the parties for providing, detailed analysis.
And appreciate the amendments to the decision.
So, thank you.
-: Thank you, Commissioner Houck.
Okay, seeing no other hands up.
Will the agenda clerk please call the roll,
on agenda item number five.
Clerk: Commissioner Houck.
-: Yes.
Clerk: Commissioner Shiroma.
-: Aye.
Clerk: Commissioner Rechtschaffen.
-: Yes.
Clerk: Commissioner Guzman Aceves.
-: Aye.
Clerk: President Batjer.
-: Yes.
Thank you, the vote on item number five is unanimous.
I wanna personally thank you all.
Okay, we are finished with the regular agenda
items for today.
Moving on now to our management reports.
There is no report for item eight,
which is the manager report and discussion
on recent consumer protection, and safety activity.
There is also no report, on item nine.
Which is management report and discussion
on administrative activities.
We'll now move on to the Commissioner's reports.
And who would like to give their report first?
I don't see any arms up, or waving hands.
So I believe there will be no Commissioner reports today.
So with that, the public meeting is now adjourned.
Thank you all.
Okay.