Tag Archives: cpuc

PG&E didn’t start any fires this week and Californians complain

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Pacific Gas and Electric began shutting down electric lines in high risk fire zones on Sunday night, as winds topping 50 miles per hour ripped through northern California. At last report, PG&E had cut power in seven counties – Amador, Calaveras, El Dorado, Lake, Napa, Placer and Sonoma. Crews inspected lines for damage yesterday, as PG&E gradually restored power to the majority of blacked out customers. The job is expected to be finished today.

On Sunday, alerts were broadcast widely. Residents in several other counties were also warned that the cuts might come, and that they should prepare. PG&E has an an opt-in alert system for customers, and county emergency services offices also got the word out.

The goal was to prevent disasters like the massive fire storms that killed dozens of people and burned hundreds of thousands of acres this year and last, including in densely populated residential areas. It’s impossible to know whether a disaster was prevented this time. All that can be said is that Cal Fire had three blazes on its hands yesterday – all were small and largely contained. There’s been no indication that electric lines had anything to do with them.

Naturally, this being California, people are upset about it. Many who have chosen to live and work in high fire risk areas whined about losing power. According to a story in the Weekly Calistogan by Cynthia Sweeney, one local businessman griped about his disappointment with PG&E. “Couldn’t they have given us a reprieve?” he said. “It’s sending a message that October is a scary time to come here”.

Duh.

Southern California Edison sent out similar warnings on Sunday and Monday, as Santa Ana winds hit. As of the company’s last update, no deliberate power cuts have been made.

San Diego Gas and Electric has proactively cut power due to fire danger in the past. It’s been tagged with billions of dollars in fire damage costs, including for one fire in which it shared responsibility for starting it with Cox Communications.

Former chief judge sues CPUC, claims firing due to PG&E investigation retaliation, racial bias

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The California Public Utilities Commission is being sued by its former chief administrative law judge, Karen Clopton. She was fired from her job in 2017.

One of the few things the two sides agree on is that “the CPUC terminated [Clopton’s] employment” and that it was an “adverse action”, as one of the commission’s filings put it. The formal reason for the dismissal isn’t stated in court documents, by either side.

Clopton charges that the real reason she was fired was racial discrimination – she’s African American – and as retaliation for her cooperation “with state and federal investigations into the misconduct of CPUC commissioners and staff”, including allegations of “judge shopping”, during the CPUC’s own investigation of the fatal PG&E gas line explosion in San Bruno in 2010.

The complaint Clopton filed with the San Francisco superior court says “beginning in June 2016, the commission began an investigation and hired an outside investigator to look into Ms. Clopton’s ‘management style,’ including allegations that she engaged in ‘bullying, intimidating, and retaliatory’ behavior towards staff”, which, it says, “were without any factual basis and represent merely the efforts of a few disgruntled employees whose performance Ms. Clopton was required to criticise and correct”. The complaint goes on to say that later, in 2017, commissioners “gave Ms. Clopton a poor evaluation, rating her as ‘improvement needed’ in subjective areas of her performance, including ‘communications skills’ and ‘relations with others’”.

Clopton’s complaint charges that her poor review reflected “resentment” at her “efforts to encourage the commission and staff to maintain high ethical standards” during the criminal investigation into the PG&E/San Bruno “judge shopping” case, and at her “persistent efforts to identify and critique actions and statements reflecting racial bias by commission members and their staff”.

The reply from the commission was to simply “deny the allegations”, which is a proper legal response at this stage of a lawsuit. Detailed arguments and hard evidence come later.

Clopton would have been involved in assigning judges to cases, including the commission’s initial inquiry into the San Bruno explosion. There’s little doubt her cooperation would have been useful during the criminal investigation into how the CPUC handled it. Most of the facts surrounding the San Bruno case and the subsequent investigation have not been publicly disclosed, including Clopton’s role. If her lawsuit goes to trial, we might learn more about the whole story.

Court documents
Order, regarding CPUC objections to amended complaint, 29 May 2018
Order, regarding case management conference, 5 September 2018
Order to show cause, regarding response to 29 May order, 10 October 2018

Documents filed by Clopton
Original complaint, 13 December 2017
Amended complaint, 8 March 2018
Response to CPUC objection to amended complaint, 15 May 2018
Case management statement, 28 June 2018
Case management statement, 4 September 2018

Documents filed by CPUC
CPUC objection (aka demurrer) to original complaint, 13 February 2018
CPUC objection to amended complaint, 13 April 2018
CPUC reply to Clopton response, 21 May 2018
CPUC answer to amended complaint, 28 June 2018
CPUC case management statement, 7 July 2018
CPUC case management statement, 4 September 2018
CPUC case management statement, 9 October 2018

PG&E responsible for Yuba County fire, AT&T is in the clear Cal Fire report says

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Pacific Gas and Electric power lines were the cause of the Cascade fire in Yuba County last year, one of many fires that came to be known collectively as the “October 2018 Fire Siege”. That’s according to an investigation report released by the California Department of Forestry and Fire protection. However, unlike some of the other fires where PG&E was implicated, the cause was not the result of a failure to follow laws regarding utility line maintenance and operations.

According to a Cal Fire press release, the problem was unusually high winds hitting what appeared to be properly built and maintained electric lines…

A high wind event in conjunction with the power line sag on two conductors caused the lines to come into contact, which created an electrical arc. The electrical arc deposited hot burning or molten material onto the ground in a receptive fuel bed causing the fire. The common term for this situation is called “line slap” and the power line in question was owned by the Pacific Gas and Electric Company.

As a matter of routine practice, Cal Fire forwarded the report to the Yuba County district attorney, but according to the Los Angeles Times, “Yuba County prosecutors said Tuesday they would not press charges against the company”. That’s in contrast to three fires in Butte and Nevada counties around the same time, where Cal Fire said that PG&E violated the law and the district attorneys are figuring out next steps.

AT&T telephone lines were also on the same poles, but were not implicated as a cause of the fire, according to the report.

Although PG&E and AT&T apparently did not break any laws, that’s not the same thing as saying they are off the hook for civil liabilities. There’s nothing to indicate that AT&T will be caught up in any of that, but PG&E likely will be. Even if PG&E followed the rules and was only partly to blame, the law governing utility poles and lines says that if a utility is involved in causing the fire, it has to pay for all damage. Even if others share the blame. A new law passed at the end of the legislative session in August allows electric companies to share the cost – which in PG&E’s case will run well into the billions of dollars – between its shareholders and customers, subject to the approval of the California Public Utilities Commission.

T-Mobile, Sprint merger review widens in California

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It seems someone jumped the gun at the California Public Utilities Commission, and prematurely sent out a ruling defining the scope of California’s regulatory review of T-Mobile’s proposed purchase of Sprint. On Thursday, the commissioner in charge of the inquiry, Clifford Rechtschaffen, issued an amended version of the “scoping memo” he released the week before, saying the first one “was mailed in error”.

There are several wordsmithing changes in the updated version, and a few that are more substantive. One big change is a broad, up front statement making it clear that there are no particular limits to what the review will cover…

The scope of this proceeding includes all issues that are relevant to evaluating the proposed merger’s impacts on California consumers and determining whether any conditions should be placed upon the merged entity.

Additions to the specific, but “non-exhaustive” list of items that will be covered include consideration of potential new services the combined company might offer and – for both new and existing services – the impact on communities and regions, as well as California a whole.

The net result is that the focus (if you want to call it that) of Rechtschaffen’s investigation is even wider than before. It won’t be limited to a few specific and largely technical issues, as T-Mobile and Sprint had hoped.

The original schedule called for a final decision by next June. The core of the new schedule tracks with the original one, but the beginning of public hearings over the next two or three months, and the final wrap up next spring (or maybe summer?) are more indeterminate. Instead of the CPUC voting on a final decision in “June 2019”, the schedule calls for that to happen in “2nd Quarter 2019”. Given the way decisions are drafted, reviewed and then put on the commission’s agenda, June is still a reasonable bet. But it might happen sooner. Or later – CPUC timelines have been known to slip.

California’s regulatory review of T-Mobile-Sprint deal has light years left to run

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The proposed purchase of Sprint by T-Mobile will get a thorough workover by the California Public Utilities Commission, and a final decision on whether or not to allow it won’t come until next summer. The commissioner running the review, Clifford Rechtschaffen, laid out the issues that he’ll investigate in a ruling on Friday.

Rechtschaffen had to decide how wide ranging his inquiry will be. Sprint and T-Mobile wanted it to be very narrow, and focus on two particular issues: could a relatively small Sprint subsidiary that does some wireline business in California be sold to T-Mobile, and could T-Mobile take over Sprint’s California mobile carrier registration. Technically, that’s just a simple notice that it has a federal license, but transferring it requires CPUC sign-off. As they tried to argue, both were matters of minor paperwork. These aren’t the droids you’re looking for, move along, move along.

Protests came from the usual suspects. TURN (aka The Utility Reform Network), the Greenlining Institute and Media Alliance – non-profit advocacy groups that rely heavily on “intervenor compensation” handed out by the CPUC – objected. So did the CPUC’s internal advocacy unit, the office of ratepayer advocates. They wanted the commission to review the whole merger, and all its potential impacts on Californians.

Rechtschaffen resisted the Jedi mind trick and sided with the protestors. He listed fourteen questions that have to be answered before the CPUC makes a final decision. The timeline he laid out says that will happen in June 2019.

The topics of those questions range from the merger’s competitive impact on mobile service and the fiber backhaul markets in California, whether or not innovation will be helped or harmed, and what, exactly, are the wonderful “efficiencies” that Sprint and T-Mobile promise will come our way if they’re allowed to combine. He’ll also consider the need for and the nature of “conditions or mitigation measures to prevent significant adverse consequences” that the CPUC might impose.

The public will be involved. Rechtschaffen plans to hold a series of public hearings in November and December, which will presumably be held in several locations around California. After that, both sides will file position papers, present evidence at a formal hearing, and submit their arguments and counter-arguments. Once that’s done – by mid-March – it’ll take about three months to produce, review and vote on a final decision. That’s the planned schedule, anyway. Much can happen that might speed up or, particularly, slow down the proceeding.

Move fast and build things, like broadband infrastructure

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The debate over California’s primary broadband infrastructure subsidy program continues. Another round of comments landed at the California Public Utilities Commission Friday, with ideas – some good, some not – for changing the way the California Advanced Services Fund (CASF) is run.

I drafted and submitted the Central Coast Broadband Consortium’s (CCBC) contribution. There are many administrative, practical and, yes, political details to be worked out. Which is a large part of the problem with the program: the grant application and review process is complicated, time consuming and capricious. Improving it requires fewer details, more predictability and rapid decision making.

Time is the most precious commodity…

The CCBC has developed and assisted in the development of CASF-funded projects since 2009. It is an increasingly difficult challenge to recruit qualified infrastructure grant applicants. The delays, uncertainty and litigation involved in the review and approval process are the primary reasons qualified companies refuse to participate. Subsidy levels can be a consideration too, but other funds can often be identified to backfill project budgets when CASF eligibility is assured and schedules are short.

Money can be made. Time cannot.

The more complicated the process is and the more opportunities for incumbents to game the system, either by exploiting an overly intricate scoring system or by endless litigation of independent proposals, the less the likelihood is of meaningful service and infrastructure upgrades in deserving communities.

Since the California legislature voted to turn CASF into a piggy bank for big incumbents last year, the pipeline of independent broadband projects has run dry. Naturally, it has not stopped Frontier Communications from gaming the system to maximise the taxpayer dollars it rakes in, while minimising its service obligations.

In theory, the draft overhaul of the program should be complete by the end of the year, although it might take a month or two (or three…) for CPUC commissioners to come to a decision. In the meantime, the debate continues.

You can download Friday’s filings, and all (I think) the other documents from the CASF reboot here

Wildfire liability changes head into California law and onto your electric bill

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It’s up to the California Public Utilities Commission now to decide whether your electric bill will include billions of dollars worth of damage done by wildfires. Governor Jerry Brown signed senate bill 901 on Friday. Among other things, SB 901 allows privately owned electric utilities to raise prices to offset damage payouts due to fires that were, to one degree or another, their fault.

Utilities – electric and telecoms – have the right to plant and use poles along roads and waterways in California, with very few restrictions and no rental fees at all. The downside is that Californian law says that, in exchange, they face strict liability for any damage caused. Even if they’re only partly to blame, they pay the full tab.

With damage estimates from the past two years of monster wildfires climbing into the tens of billions of dollars range, and a growing pile of evidence linking electric lines to the blazes, fears of bankruptcy grew. One solution considered during legislative negotiations over the summer was to soften the strict liability doctrine and allow damages to be spread over any and all who might bear some of the blame for wildland disasters.

Those talks didn’t produce a result, so lawmakers went for Plan B: loosen regulations that restrict how electric utility damage payments are split between shareholders and customers, and let the CPUC decide who pays what. SB 901 was passed in the final hours of the legislative session, and now governor Brown has blessed it.

The deal doesn’t do much for telecoms companies. They set their own rates, without oversight by the CPUC. Telephone companies, particularly AT&T and Frontier Communications, will decide for themselves how to manage wildfire risks, to both their service lines and their bottom line. One solution, which doesn’t bode well for rural Californians, is to rip out copper infrastructure and replace it with low capacity wireless facilities. California lawmakers rejected an effort to streamline that process in 2016. It’s a reasonable bet to think it’ll be back on the table next year.

CPUC leaves SCE’s fiber business intact, but the beatings will continue

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With barely a mention at its meeting, the California Public Utilities Commission closed the first chapter of a saga that should never have been written. By a unanimous vote, commissioners allowed Southern California Edison to withdraw its request for blanket approval of a dark fiber lease deal with Verizon.

SCE asked to pull the application because the deal was dead, the victim of a mauling by so called consumer advocates and a purblind proposed decision by CPUC commissioner Clifford Rechtschaffen. Opponents objected, preferring instead that the commission press on and dismantle a revenue sharing deal, dating back two decades, that gave 10% of SCE’s fiber revenue to electric customers.

The fiber network was originally built to support its electric operations, but consistent with industry practice and common sense, SCE installed more fiber strands than it immediately needed – the cost of a cable with extra strands is diminishingly small. Construction accounts for almost all the expense.

Independent dark fiber is a valuable resource, particularly for competitive telecoms companies, and large corporate and institutional users, but also for incumbents like Verizon. It’s particularly precious in California, where most of the long haul fiber routes are controlled by old school, monopoly model telephone companies.

So SCE found a ready market for its 5,000 miles of fiber, threaded throughout the greater Los Angeles region. But success draws attention, in this case from groups that claim to speak for Californian consumers, but don’t seem to understand that those consumers need fast and, particularly, affordable broadband service, too. They convinced Rechtschaffen to propose taking half of SCE’s fiber revenue away, which would effectively kill the business. After paying operating costs – a fiber business does not run for free – SCE would have been either in the red or close enough to it that there would be little point to continuing.

After the case dragged on for more than a year, Verizon threw up its hands and cancelled the contract. SCE told the CPUC it was all moot, and on Thursday commissioners rejected opposing arguments and agreed. But the decision also contained a warning: the commission has electric company fiber in its crosshairs

The scope of the proceeding has raised broad policy issues that include identifying what policy frameworks promote the most effective utilization of ratepayer- funded dark fiber throughout California’s regulated electric utility infrastructure and assure safety, universal access to utility services, and non-discriminatory access to this infrastructure, especially amidst policy changes at the federal level. The Commission may consider opening a rulemaking to consider these and other broad policy issues and, in that broader context, reconsider the appropriate revenue sharing allocation for dark fiber route leases.

It’s not just about SCE. Apparently seeing the writing on the wall, PG&E also backed off a plan to become a fully certified telecoms company. Dark fiber sales is a minor sideline for both companies. Adding hugely disproportionate regulatory overhead will do nothing for electric rates and only serve to reduce competition and increase broadband prices for all consumers.

As California burns, governor decides whether legislature’s utility liability solution is good enough

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A plan to reduce both the risk of catastrophic wildfires happening and the risk that such fires will bankrupt privately owned electric utilities is on California governor Jerry Brown’s desk. He has to decide if the deal reached by legislative leaders as the clock ran out on this year’s session is good enough.

Senate bill 901 would, among other things, allows the California Public Utilities Commission more flexibility in deciding whether liability costs can be passed on to electric customers. Under a principle in California law known as strict liability, if a utility is partially – even slightly – at fault, then it’s responsible for paying for the full cost of wildfire damage. The bill also includes measures to reduce woodland fuel loads and increase fire prevention efforts.

The original idea was to change the strict liability doctrine and figure out some way of spreading liability for wildfire damages amongst all those responsible. Despite nearly two months of negotiations the various sides – electric companies liked the idea, insurers didn’t, for example – couldn’t come to an agreement. So the legislative sausage machine ground out the current compromise that leaves it up to the CPUC to decide how the tab will be split between an electric company’s shareholders and ratepayers.

It’s also an issue for telecoms companies, particularly the incumbent telephone companies – large and small – that serve rural California. They also benefit from access to utility pole routes and bear the same kind of responsibility that goes along with it. The big difference is that the major incumbents – particularly AT&T and Frontier – are unregulated. It’s up to them to decide for themselves whether to cut dividends, raise rates or, in some circumstances, replace wireline infrastructure with wireless facilities, or walk away completely.

In this case, Brown has three viable options. He can accept the compromise and allow the bill to become law, or he can veto it and leave it to the next governor and legislature to solve, or he can veto it and call the legislature back into a special session, until they come up a solution that suits him. He has until the end of September to decide.

Protect our monopolies, telcos, cable tell CPUC

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AT&T doesn’t want to be bothered with any performance requirements or public disclosures. It just wants the California Public Utilities Commission to write it a monthly check, drawn on the California Advanced Services Fund (CASF). Boiled down, that’s its idea for rebooting CASF, following its success at convincing California lawmakers to turn the program into its own private piggy bank.

In that respect, AT&T is being consistent. But there is one, big whopper in the recommendations it submitted last month: AT&T claims the “communications environment” is “hypercompetitive”.

Nonsense.

California’s broadband market is concentrated in the hands of just a few players. Places where there are more than two wireline providers are rare. When broadband subsidies are on the table, that duopoly turns into a monopoly. Both California and federal infrastructure subsidies are effectively limited to communities bypassed by cable companies. In its service territory, AT&T will only get taxpayer money where it’s the only game in town.

That’s not hypercompetitive. That’s not competitive. That’s a monopoly.

Frontier Communications, Comcast and Charter Communications also want to fence off service areas where their service is substandard or nonexistent. Frontier and the California Cable and Telecommunications Association – Comcast’s and Charter’s joint lobbying front organisation – are both urging the CPUC to allow them to challenge proposed infrastructure projects at any time, for any reason. Frontier, in particular, abuses the challenge process – sometimes successfully, sometimes not – by submitting late and often unsupportable service claims.

Most of the comments from other organisations, including those that I drafted for the Central Coast Broadband Consortium, urge the CPUC to set reasonable limits on challenges. The endless attacks on independent projects by incumbents is a major reason that reviews of proposed projects can stretch out for more than two years.

The CASF program’s purpose is to improve California’s broadband infrastructure, not to protect monopoly businesses at taxpayers’ expense. It’s time to end the delays and make incumbents accountable, for both the service they provide and the claims they make about it.