$680 Million SCE Plan Will Reap Profits With Scant Oversight
Written by 991KBU on June 28, 2019
Southern California Edison is spending as much as $680 million this year for fire mitigation projects … and will earn a 10 percent profit on those expenses.
And a study for Calmatters … a statewide journalism venture … says there is no measurement system in place to measure if that money is being spent wisely.
Edison is likely on the hook for about 3 billion dollars in damages from the Woolsey and Tomas fires … which killed five and caused flooding that likely killed more than 40.
Edison is described by some utility regulators as one more disaster away from bankruptcy … and the company is under orders from the state to reduce fire risks.
And spend what it takes.
Right now … that is two thirds of a billion dollars … on helicopter surveys … armies of tree cutting crews … and a forest of new thicker poles.
A company official tells CalMatters that “this is not about spending money.
“This is about putting in place the appropriate amount of mitigation to address the risk.”
Calmatters reports that Edison’s plan to reduce fire dangers provides scant details on any cost benefit ratio … and little evidence to support the company’s claims that cutting trees and replacing hundreds of thousands of wooden utility poles will actually reduce the risk of wildfires.
In addition … the 680 million dollars being spent by Edison is heavily weighted toward projects that afford them financial advantages and tax benefits.
Calmatters reports that the investor-owned utility may recover 10% or more beyond what they spend on the projects, recouping the money from their customers.
Pole replacement, for example, is a big-ticket item in many of the plans—causing some skeptics to wonder if it’s there for wildfire-resistance or profit-making … Calmatters reports.
And when utilities invest in infrastructure, they may gain tax benefits by accelerating depreciation on their equipment.
One critic … former Public Utilities Commission president, Loretta Lynch:
“Nobody is figuring out whether or not these plans contain any measure of mitigation, or whether they are just and reasonable.”
Another expert tells Calmatters that “system hardening sounds good, but most of the fires that have been caused across the board in the United States would not be specifically mitigated by hardening.”
Those are the words of Don Russell, an electrical engineer at Texas A&M University who researches utility-caused fires.
He says … “If you were to ask me, ‘Are replacing utility poles the best place to spend your money to cut down the risk of fire?’ the answer would be, ‘No.’ Poles falling over and taking lines down with them is not a huge factor in wildfires. In fact, it seldom happens.”
That story is from Calmatters … a statewide nonprofit journalism project.
It was reported by Julie Cart … a Pulitzer prize winning reporter who used to work at the Los Angeles Times.
We have a link to her story at the KBUU Newswire:
Scant details: Are California utilities doing enough to fireproof their equipment?
