WEBVTT
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Streaming.
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Thank you very much operator.
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Good morning, everyone.
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We need to establish a quorum.
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Will the agenda clerk
please call the roll.
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Commissioner Houck.
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Here.
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Commissioner Shiroma.
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Present.
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Commissioner Rechtschaffen.
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I'm here.
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Commissioner Guzman Aceves.
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Here.
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President Batjer.
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Here.
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Thank you, we have established a quorum.
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Welcome again, everyone
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to the California Public
Utilities Commission.
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I am calling this meeting
of April 22nd, 2021
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public agenda number 3484 to order.
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Due to the coronavirus pandemic,
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and the shelter in place order,
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we're conducting
today's business meeting,
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online and by remote participation.
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The meeting is live-streamed
on the CPUC website.
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You can view the
meeting@www.adminmonitor.com
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or /ca, or /cpuc admin
monitor is all one word.
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Closed captioning is available
in English and Spanish
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through the webcast.
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You can click on the green button
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to select your language of choice.
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Our engagement is critical
to the CPUSA process.
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If you wish to make a public comment,
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please dial 1-808-857
... (clears throat)
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Excuse me, 1917, and
enter pass code 9899501.
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And press star one, you
will be placed into a queue,
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and the operator will take your name,
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and information if appropriate.
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You will be called upon to speak,
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when we get to the public
comment period in today's agenda.
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If you encountered difficulty calling
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into the public telephone line,
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please email
loginmeetinghelp, all one word
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@cpc.ca.gov.
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Before we commence
with our public comments,
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I would like to take a
moment to recognize
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that today is first day.
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This year marks 51
years since the first day.
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And decades of momentum
and progress towards
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protecting our planet.
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Many of our staff work,
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on the critical environmental
and climate programs,
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here at the PUC.
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And many, are also environmental leaders
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in their own communities.
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I would like to publicly
thank our employees,
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for their continuous
dedication to helping make
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California a national,
and a world leader
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in developing clean energy programs,
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and helping to ensure an energy future
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that is clean, reliable, and affordable.
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Environmental and climate
policy affects all of us,
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and climate change will
continue to play an increasing role
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in the quality of our lives.
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Just yesterday, Governor Newsom declared
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a drought emergency for
the Russian River watershed,
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in the Mendocino and Sonoma counties.
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And the state department
of water resources notes
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that this is the fourth driest record
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on our state wide records.
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Governor Newsom, also
issued an executive order
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which urges Californians to
recommit to the conservation
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as a way of life.
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One of our most valuable
natural resources is water.
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And while climate change
has intensified the impact,
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of dry conditions on our communities,
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there are actions we
can take as individuals,
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to prepare for continued dry conditions,
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as well as actions
we can take as a state,
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to improve our drought resilience.
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The CPUC for instance,
will call on the investor
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owned utilities to make
its customers aware
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of the ongoing dry conditions,
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and encourage water conservation.
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To find out what you could do,
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to conserve one of
California's most vital resources,
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please visit saveourwater.com.
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Addressing these
challenges will take all of us
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working together.
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On this first day, I
welcome you to celebrate,
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by considering actions
you can take to care
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for the environment.
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No matter what you choose,
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you will be part of
California's efforts,
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to ensure clean and a
healthy future for all to enjoy.
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Our president Barack Obama,
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acknowledged the
impact of climate change,
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and the role we can play.
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And, I would like to
end my opening remarks
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with his words, and I quote,
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"We are the first
generation to feel the effect
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of climate change.
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And, the last generation who
can do something about it."
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Thank you.
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We now turn to the public
comment, part of our agenda today.
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If you wish to make a public comment,
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and you have already dialed
into the public comment,
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telephone line, please
now press star one,
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to get into the public comment queue.
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If you see rules, do not
allow for parties in proceedings
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to speak about open proceedings.
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The public can make
comments addressing items
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on the consent and regular agenda,
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as well as items not
on the agenda today.
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Please note, that there
will not be public comments
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on all items on the
closed session agenda.
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You'll have two minutes to speak.
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Let me repeat that, you will
have two minutes to speak.
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You will hear a bell sound.
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You will hear a bell
sound, when your time is up.
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Please, please be mindful of
other speakers in the queue,
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and keep to your alerted time.
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With that guidance in mind,
I welcome today's speakers.
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I will now turn to the operator,
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to open the public
comment telephone line.
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Holly, you open the line.
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Thank you.
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The public comment
phone line is now open.
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Again, if you wish to speak
during the public comment period
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press star one, unmute your phone,
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and clearly record your name
and organization when prompted.
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Our first comment is from David McCord.
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So you may go ahead.
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Hi, this is David
McCord, rate payer in El Sorito.
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And I'm a net energy
metering and proceeding.
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Contrary to what the utilities
would have you believe,
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and the net energy metering customers
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with a rooftop solar, actually
subsidize the rest of us
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on avoided costs, including healthcare,
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upgrades of transmission
lines, and so forth.
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And I've read that
reputable report on that.
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Can't bring it up now,
but I can send it to you.
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Thanks.
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Bye.
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Thank you Mr.McCord.
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Operator, the next caller please.
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Our next caller
is Dr.Patrick Kearns.
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And you may go ahead.
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(indistinct).
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Sorry.
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My name is Patrick Kearns.
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Is this audible?
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Yes, we can hear you
fine, please go ahead.
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Thank you.
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Well, again, I hope that the
Commissioners and their staff
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have enjoyed good health,
and have had the opportunity
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to get vaccinated.
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I would like to ask rhetorically,
what is public interest?
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And how is it best served?
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From my high school
civics class I wrote,
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anything affecting the
rights, health, or finances
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of the public at
large, the body politic.
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Public interest is a common
concern among citizens
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in the management and
affairs of the local, state,
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county and national government.
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The body politic and the public whale,
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is the public interest being served?
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When a settlement
agreement allows a utility
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to avoid a penalty, for
a Sam Bruno explosion
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resulting from a pipe rupture
due to delayed maintenance.
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Is the public interest served
when maintenance is delayed,
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even though rate payer
funding has been approved?
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Is the public interest
served by setting rates
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that creates the second largest water?
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And what are you as
a wastewater utility,
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went up to 20% of their rate payers,
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cannot afford to pay their water bill?
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When my patient comes in and tells me
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they can't afford their medicine
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because they had
to pay their water bill,
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is that serving the public interest?
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Is the public interest served
by prioritizing social values
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higher than doubling a
holding company debt profile
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in order to create a
risk profile paralleling
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an electric companies bankruptcy
or pre-bankruptcy profile?
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Especially when this has
happened in the last 20 years.
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I submit that the public
interest as reflected
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in many of the Commission's decisions,
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prioritize social values
higher, than financial interests.
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When especially relevant,
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that if a holding company goes bankrupt,
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(beep sound) the service
company is still in business,
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and can still deliver
electricity, or water,
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or commodities for human life.
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Thank you very much for listening.
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Thank you for your service.
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And, that is what I have to say.
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Thank you Dr.Kern.
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Operator, the next caller, please.
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And I have
no additional callers
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in the public comment
telephone line at this time.
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But again, as a last reminder,
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if you would like to make a
comment, please press star one.
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Has anyone joined us?
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And we
have no more callers
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on the public comment telephone line.
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Okay, thank you operator
with no more callers on the line.
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These are the following
changes to our agenda, today.
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Item number six will be taken
up with the Consent Agenda,
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and item number seven
will also be taken up
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with a Consent Agenda.
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Okay, I will now take
up the consent items.
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Is there a motion?
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So moved.
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So moved.
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And a second?
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Okay, motion has been made in seconded.
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Will the agenda clerk
please call the roll,
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on the Consent Agenda.
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Commissioner Houck.
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Yes.
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Commissioner shiroma.
00:12:09.890 --> 00:12:10.723
Aye.
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Commissioner
Rechtschaffen?
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Yes.
00:12:15.819 --> 00:12:17.774
Commissioner
Guzman Aceves?
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Aye.
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President Batjer?
00:12:21.330 --> 00:12:22.330
Yes, thank you.
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The Consent Agenda has
been passed unanimously.
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We will now take up the
regular agenda items, excuse me.
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And I will be introducing
item number five.
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This proposed decision
determines that PGNE
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has satisfied the stress
test methodology created
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by the Commission pursuant to SB 901.
00:12:48.940 --> 00:12:53.160
And that, 7.5 billion of the 2017,
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catastrophic wildfire
costs are eligible,
00:12:56.630 --> 00:12:59.040
under the stress test to be financed,
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through the issuance of recovery bonds,
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pursuant to SB 901 and AB 1054.
00:13:06.410 --> 00:13:08.480
Before I provide more specifics
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of what that proposed decision does,
00:13:11.910 --> 00:13:15.590
I would like to provide
a brief background,
00:13:15.590 --> 00:13:20.150
on the landscape in which
PGNE submitted its application.
00:13:20.150 --> 00:13:23.220
With devastating wildfires
ignited across California
00:13:23.220 --> 00:13:28.220
in recent years, the legislature
enacted SB 901 in 2018,
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and AB 1054 in 2019.
00:13:32.590 --> 00:13:35.560
Two among other things,
address the ill effects
00:13:35.560 --> 00:13:38.830
of the utilities exposure
to financial liability
00:13:38.830 --> 00:13:43.340
from wildfires, caused by
their own electrical equipment.
00:13:43.340 --> 00:13:46.410
The legislature determined
that these skill effects
00:13:46.410 --> 00:13:48.670
should not result in financial harm,
00:13:48.670 --> 00:13:51.593
to rate payers, or
create safety concerns.
00:13:52.720 --> 00:13:55.780
In 2019 pursuant to SB 901,
00:13:55.780 --> 00:13:59.163
the Commission adopted
a financial stress test,
00:14:00.330 --> 00:14:03.690
methodology for determining
whether any portion
00:14:03.690 --> 00:14:08.040
of utilities 2017 wildfire
cost should be recovered
00:14:08.040 --> 00:14:11.110
through a Commission
issued financing order,
00:14:11.110 --> 00:14:14.940
to avoid having that
utility observed cost
00:14:14.940 --> 00:14:16.940
that exceed the amount they could pay,
00:14:16.940 --> 00:14:20.373
without harming customers
or creating safety concerns.
00:14:21.640 --> 00:14:24.650
That's a quick to this, in
the proceeding considering
00:14:24.650 --> 00:14:29.650
PGNE's plan of reorganization,
for its exit from bankruptcy.
00:14:29.930 --> 00:14:33.920
PGNE stated its intention
to file with the Commission,
00:14:33.920 --> 00:14:38.300
an application requesting
the stress test methodology,
00:14:38.300 --> 00:14:42.350
be applied to 7.5 billion in costs
00:14:42.350 --> 00:14:45.333
it had from the 2017 wildfires.
00:14:46.530 --> 00:14:49.168
As one of the Commissions condition,
00:14:49.168 --> 00:14:53.100
for approval of the PGNE's
plan of reorganization,
00:14:53.100 --> 00:14:56.950
we required that any
application PGNE submits
00:14:56.950 --> 00:15:01.950
to securitize the 2017
wildfire follow through
00:15:02.190 --> 00:15:05.710
on PGNE's commitment
to the securitization fee rate
00:15:05.710 --> 00:15:08.153
neutral on average to customers.
00:15:09.100 --> 00:15:12.120
Today's decision determines
the PGNE's request
00:15:12.120 --> 00:15:17.120
to have fined that 7.5 billion,
in the 2017 wildfire cost,
00:15:17.630 --> 00:15:21.580
is eligible for rate payer
back securitization,
00:15:21.580 --> 00:15:23.120
under the stress test.
00:15:23.120 --> 00:15:25.690
And fine the PGNE's proposal,
00:15:25.690 --> 00:15:29.123
with the conditions put
in place, in the decision,
00:15:29.980 --> 00:15:34.210
meets the conditions stated
in the Commission's decision
00:15:34.210 --> 00:15:35.973
on the PGNE bankruptcy.
00:15:37.180 --> 00:15:38.780
As a result of this condition,
00:15:38.780 --> 00:15:42.230
a shareholder funded
trust, would be established.
00:15:42.230 --> 00:15:45.900
It is designed to offset,
any fixed changes,
00:15:45.900 --> 00:15:48.729
that would be applied
to the rate payer bills.
00:15:48.729 --> 00:15:51.620
Shareholders would fund this trust,
00:15:51.620 --> 00:15:53.940
through an initial contribution,
00:15:53.940 --> 00:15:58.880
of at least $1 billion, by 2021.
00:15:58.880 --> 00:16:03.880
And a subsequent contribution
of $1 billion, by 2024.
00:16:06.230 --> 00:16:09.480
With additional shareholder
contributions made to the trust,
00:16:09.480 --> 00:16:13.950
an ongoing basis going
forward, as net operating losses,
00:16:13.950 --> 00:16:16.853
are applied to the company's
future taxable income.
00:16:18.000 --> 00:16:21.660
In addition, PGNE would
be required to contribute
00:16:21.660 --> 00:16:25.950
up to 775 million, after
the ongoing shareholder
00:16:25.950 --> 00:16:28.770
contributions are fully contributed,
00:16:28.770 --> 00:16:30.870
if the Commission
determines it is needed.
00:16:32.160 --> 00:16:35.800
PGNE would also be required
to share with rate payers,
00:16:35.800 --> 00:16:38.520
if portion of any surplus assets,
00:16:38.520 --> 00:16:41.223
that exist at the end
of the life of the trust.
00:16:42.140 --> 00:16:44.890
Finally, this decision also makes clear,
00:16:44.890 --> 00:16:47.450
that the Commission
does not waive the ability
00:16:47.450 --> 00:16:51.140
to exercise its regulatory
authority in the future,
00:16:51.140 --> 00:16:55.740
to ensure the transaction
remains rate air neutral,
00:16:55.740 --> 00:16:59.133
should there be an
unexpected shortfall in the trust.
00:17:00.430 --> 00:17:03.050
Based on these requirements,
I believe the decision
00:17:03.050 --> 00:17:06.400
before today meets the
requirements of the stress test,
00:17:06.400 --> 00:17:10.230
maintains ratepayer neutrality,
and will help further put,
00:17:10.230 --> 00:17:13.450
PGNE on a path to
enhance financial stability.
00:17:13.450 --> 00:17:16.960
Which can provide lower
costs to the customers,
00:17:16.960 --> 00:17:18.773
than without the securitization.
00:17:19.970 --> 00:17:21.770
I would like to thank the team,
00:17:21.770 --> 00:17:25.890
that works on this technical
and challenging proceeding.
00:17:25.890 --> 00:17:29.620
I want to especially thank the
excellent judge Robert Haga.
00:17:29.620 --> 00:17:32.260
His grasp of the subject is impressive.
00:17:32.260 --> 00:17:34.540
And while I know he has a lot of degree,
00:17:34.540 --> 00:17:38.103
I believe he also deserves an
honorary degree in economics.
00:17:39.293 --> 00:17:41.660
I would also like to
thank the legal and energy
00:17:41.660 --> 00:17:46.660
division staff, (indistinct),
Jeff (indistinct),
00:17:47.400 --> 00:17:51.830
Candice Maury, Michael
Conklin, and so many others.
00:17:51.830 --> 00:17:56.130
And especially, I wanna
thank my Begley team partner,
00:17:56.130 --> 00:17:57.470
Commissioner Rechtschaffen,
00:17:57.470 --> 00:18:01.250
and his wonderful Chief
of Staff, Shawn Simon.
00:18:01.250 --> 00:18:04.320
And finally, I would like
to thank my wonderful
00:18:04.320 --> 00:18:06.460
Chief of Staff, Shannon O'Rourke,
00:18:06.460 --> 00:18:10.543
who also by the way, deserves
an honorary degree in finance.
00:18:11.830 --> 00:18:13.540
So with that, I thank you all.
00:18:13.540 --> 00:18:17.230
And I would ask my fellow
Commissioners for your support.
00:18:17.230 --> 00:18:19.030
And I will first turn for comments
00:18:19.030 --> 00:18:22.450
to my Begley team partner,
Commissioner Rechtschaffen,
00:18:23.698 --> 00:18:25.794
for any comments.
00:18:25.794 --> 00:18:28.720
Thank you very
much President Batjer.
00:18:28.720 --> 00:18:31.390
President Batjer, you provided
an excellent explanation
00:18:31.390 --> 00:18:35.000
of the decision and the broader context.
00:18:35.000 --> 00:18:37.610
I won't be repeating that here.
00:18:37.610 --> 00:18:41.880
I will be supporting the
decision as you know,
00:18:41.880 --> 00:18:44.420
it's consistent with
the statutory framework
00:18:44.420 --> 00:18:46.780
that the legislature established,
00:18:46.780 --> 00:18:50.810
and are implementing decisions
concerning the stress test.
00:18:50.810 --> 00:18:54.930
And in particular,
the decisions spell out
00:18:54.930 --> 00:18:57.633
the specific set of
circumstances under which,
00:18:59.070 --> 00:19:00.633
you can apply this stress test,
00:19:01.578 --> 00:19:05.610
and the application here
meets those circumstances.
00:19:05.610 --> 00:19:09.130
And very importantly,
the decision is consistent
00:19:09.130 --> 00:19:13.700
with our decision approving
PGNE's reorganization plan,
00:19:13.700 --> 00:19:18.010
as being neutral to customers
from a rates perspective,
00:19:18.010 --> 00:19:21.443
that's a critical
element of this decision.
00:19:22.400 --> 00:19:25.410
The final decision
that we will be voting on
00:19:25.410 --> 00:19:30.410
and improved upon PGNE's proposal,
00:19:30.490 --> 00:19:35.490
it includes greater
assurances that the shareholder
00:19:35.630 --> 00:19:39.750
contributions will
sufficiently fund the trust.
00:19:39.750 --> 00:19:44.160
It adds protections, as
President Batjer outlined,
00:19:44.160 --> 00:19:47.350
judge Haga's decision,
revisions in response
00:19:47.350 --> 00:19:51.350
to parties comments,
clarifies that the Commission
00:19:51.350 --> 00:19:54.053
maintains regulatory oversight,
00:19:55.760 --> 00:19:58.583
over their consumer credit trust.
00:19:59.520 --> 00:20:01.210
We'll continue to monitor it,
00:20:01.210 --> 00:20:03.010
to ensure rate payer neutrality
00:20:03.010 --> 00:20:05.230
as President Batjer mentioned.
00:20:05.230 --> 00:20:08.960
And the decision also
incorporates a reporting
00:20:08.960 --> 00:20:12.190
requirement to provide
greater transparency.
00:20:12.190 --> 00:20:16.578
So I also wanna thank, and I
express my deep appreciation
00:20:16.578 --> 00:20:19.810
to Judge Haga,
President Batjer, our staff,
00:20:19.810 --> 00:20:22.380
and the legal division
and the energy division,
00:20:22.380 --> 00:20:26.540
for their work on this important
and complicated matter.
00:20:26.540 --> 00:20:27.373
Thank you.
00:20:29.720 --> 00:20:32.200
Thank you, Commissioner
Rechtschaffen.
00:20:32.200 --> 00:20:34.100
Other Commissioners for your comments?
00:20:35.428 --> 00:20:37.360
Who would like to go next?
00:20:37.360 --> 00:20:39.840
I don't see anybody's hand up.
00:20:39.840 --> 00:20:42.853
Oh, okay, Commissioner
Shiroma please, go forward.
00:20:43.960 --> 00:20:45.251
Thank you, President Batjer.
00:20:45.251 --> 00:20:47.584
Thank you, Mr.Rechtschaffen.
00:20:49.090 --> 00:20:52.557
In the course of the
(indistinct) division,
00:20:52.557 --> 00:20:55.390
I appreciate the revision that were made
00:20:55.390 --> 00:20:57.903
in response to comments.
00:20:59.142 --> 00:21:01.210
I thank all of the parties
staff who provided
00:21:01.210 --> 00:21:06.210
significant analysis into this
proposal for the PGNE cost,
00:21:08.180 --> 00:21:11.740
starting from the 2017 wildfires.
00:21:11.740 --> 00:21:13.663
As you both have outlined,
00:21:15.030 --> 00:21:19.240
it comports with the
stress test methodology,
00:21:19.240 --> 00:21:22.470
we adopted out in 2019.
00:21:22.470 --> 00:21:27.020
It provides for the team
oversight and the Commission.
00:21:27.020 --> 00:21:32.020
It provides for the
neutrality on the rate payers.
00:21:34.080 --> 00:21:39.080
And it imports with the
overall plan for PGNE
00:21:42.570 --> 00:21:47.180
to achieve investment great ratings.
00:21:47.180 --> 00:21:52.180
And with all of this, I
also recognize too that,
00:21:54.210 --> 00:21:58.230
PGNE itself must continue to demonstrate
00:21:58.230 --> 00:22:01.180
that it is offering its system properly,
00:22:01.180 --> 00:22:03.920
and using its budget
as it is supposed to,
00:22:03.920 --> 00:22:07.290
towards getting to that
investment great rating.
00:22:07.290 --> 00:22:10.980
We can also thank, the
team that worked on this.
00:22:10.980 --> 00:22:15.980
It is yet another,
complicated massive analysis
00:22:19.680 --> 00:22:23.670
requiring key understanding of finances,
00:22:23.670 --> 00:22:28.670
and how this all comported
with our stress test decisions
00:22:30.110 --> 00:22:35.110
back in 2019, judge
haga, and legal team of,
00:22:35.277 --> 00:22:38.487
(indistinct), Michael
Conklin, Jeff (indistinct),
00:22:39.380 --> 00:22:44.380
Candice, and all of the
diligent work on this effort.
00:22:45.660 --> 00:22:46.493
Thank you.
00:22:46.493 --> 00:22:49.333
And to both of your
teams, thank you very much.
00:22:51.300 --> 00:22:53.040
Thank you,
Commissioner Shiroma.
00:22:53.040 --> 00:22:54.153
Any other comments?
00:22:56.300 --> 00:22:57.410
Darcie is that your hand up?
00:22:57.410 --> 00:22:58.313
I can't tell.
00:23:01.490 --> 00:23:04.710
No, I just wanted to thank
Judge Haga, and your office,
00:23:04.710 --> 00:23:07.110
President Batjer, and
Commissioner Rechtschaffen
00:23:07.110 --> 00:23:09.150
for all of the work on
this challenging issue.
00:23:09.150 --> 00:23:12.690
And for the parties for
providing, detailed analysis.
00:23:12.690 --> 00:23:15.100
And appreciate the
amendments to the decision.
00:23:15.100 --> 00:23:16.797
So, thank you.
00:23:16.797 --> 00:23:18.960
Thank you, Commissioner Houck.
00:23:18.960 --> 00:23:23.390
Okay, seeing no other hands up.
00:23:23.390 --> 00:23:26.320
Will the agenda clerk
please call the roll,
00:23:26.320 --> 00:23:29.583
on agenda item number five.
00:23:31.700 --> 00:23:33.013
Commissioner Houck.
00:23:33.940 --> 00:23:34.773
Yes.
00:23:36.281 --> 00:23:38.241
Commissioner Shiroma.
00:23:38.241 --> 00:23:39.074
Aye.
00:23:40.109 --> 00:23:42.018
Commissioner Rechtschaffen.
00:23:42.018 --> 00:23:43.899
Yes.
00:23:43.899 --> 00:23:45.856
Commissioner Guzman Aceves.
00:23:45.856 --> 00:23:46.689
Aye.
00:23:47.919 --> 00:23:49.849
President Batjer.
00:23:49.849 --> 00:23:50.682
Yes.
00:23:50.682 --> 00:23:53.690
Thank you, the vote on item
number five is unanimous.
00:23:53.690 --> 00:23:55.463
I wanna personally thank you all.
00:23:57.860 --> 00:24:01.340
Okay, we are finished
with the regular agenda
00:24:01.340 --> 00:24:02.710
items for today.
00:24:02.710 --> 00:24:06.160
Moving on now to our management reports.
00:24:06.160 --> 00:24:09.430
There is no report for item eight,
00:24:09.430 --> 00:24:11.360
which is the manager
report and discussion
00:24:11.360 --> 00:24:14.313
on recent consumer
protection, and safety activity.
00:24:15.860 --> 00:24:18.650
There is also no report, on item nine.
00:24:18.650 --> 00:24:20.850
Which is management
report and discussion
00:24:20.850 --> 00:24:23.003
on administrative activities.
00:24:24.310 --> 00:24:27.133
We'll now move on to the
Commissioner's reports.
00:24:28.140 --> 00:24:30.440
And who would like
to give their report first?
00:24:33.660 --> 00:24:38.130
I don't see any arms
up, or waving hands.
00:24:38.130 --> 00:24:42.690
So I believe there will be no
Commissioner reports today.
00:24:42.690 --> 00:24:46.620
So with that, the public
meeting is now adjourned.
00:24:46.620 --> 00:24:47.563
Thank you all.
00:24:50.486 --> 00:24:51.319
Okay.