Efficient Financing & Incremental Investment Opportunities
CALIFORNIA'S STRONG REGULATORY CONSTRUCT FOR
COST RECOVERY AND MITIGATION OF WILDFIRE LIABILITY
Wildfire Fund
Improves Liquidity
ASC Establishes
Presumption of Prudency
Prudency Standard
Revision Limits Risk
Liability Cap Mitigates
Shareholder Exposure
Wildfire Spending
Improves Safety
$21B wildfire fund (SDG&E's share is $323M upfront + $13M annually over a 10-year period), estimated to
cover $40B- $50B of wildfire damages that may be caused by California investor-owned electric utilities
Fund provides liquidity on eligible claims in excess of insurance coverage
SDG&E received its Annual Safety Certification (ASC) in September 2020
Enables liability cap and results in a presumption of prudent conduct
CPUC to apply an improved standard similar to FERC standard of review to determine reasonableness of utility
conduct related to an ignition
Utility deemed reasonable if holding a valid ASC, unless a serious doubt is raised regarding the utility's conduct
Establishes a cap on potential shareholder liability; initial cap of $950M based on SDG&E's 2020 electric T+D
rate base¹
Caps any potential future wildfire losses found to be incurred due to imprudent conduct on a 3-year rolling basis
until wildfire fund is exhausted
Investor-Owned Utilities (IOUS) required to spend $5B (SDG&E's share is $215M) on wildfire safety capex tied
to their Wildfire Mitigation Plans
1.
2.
IOUS will recover capital and financing costs; no return on equity
AB 1054 provides strong regulatory construct for determining wildfire liability and cost recovery2
The aggregate requirement to reimburse the Wildfire Fund over a trailing three calendar-year period is capped at 20% of the equity portion of an IOU's electric transmission and distribution rate base in the year of the prudency determination.
Assembly Bill (AB) 1054.
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