The California Public Utilities Commission on Thursday denied San Diego Gas & Electric‘s request to charge customers for the costs of the 2007 wildfires.
SDG&E had sought $379 million for damages from the Witch Creek, Guejito and Rice wildfires, which were sparked by electrical lines blown down by strong Santa Ana winds. The utility said the levy would amount to $1.67 a month for the typical residential customer.
“SDG&E strongly disagrees with today’s decision. The CPUC got it wrong. The 2007 wildfires were a natural disaster fueled by extreme conditions including the worst Santa Ana wind event this region has ever seen,” said Lee Schavrien, SDG&E’s senior vice president and chief regulatory officer.
The fires killed two people, burned nearly 200,000 acres and destroyed more than 1,100 homes.
In a statement after the decision, the CPUC said that SDG&E’s operation and management of its facilities prior to the ignition of the wildfires “was not prudent.”
“There is no dispute that SDG&E facilities caused these fires. The question we had to analyze was whether the costs related to the fires should be paid by customers or shareholders. The CPUC undertook a careful review of the facts of each fire and determined in each case that customers should not have to bear these costs,” said Commissioner Liane M. Randolph.
The fires were fed by 92 mph winds combined with high heat and low humidity. SDG&E said the Federal Energy Regulatory Commission conducted its own inquiry and found the utility acted reasonably.
The utility vowed to “vigorously pursue all available avenues to overturn this decision.”
In filings with the state, SDG&E said it faced $2.4 billion in costs from the fires, including 2,500 lawsuits seeking damages. The company said it has recovered $1 billion from insurance carriers and another $824 million from Cox Communications and three contractors.
Las month SDG&E’s parent company, Sempra Energy, took a charge of $208 million against earnings in anticipation that the CPUC might rule against the utility.