Darren C.

Bouton
Director of State Public Affairs

April 13, 2018

The Honorable Ben Hueso, Chair

Senate Committee on Energy, Utilities and Communications
State Capitol, Room 2206
Sacramento, CA 95814

Re: SB 1088 (Dodd): As Amended April 9 – Letter of Concern

Dear Chairman Hueso:

Southern California Edison (SCE) is committed to working with state policymakers to help strengthen
standards and policies that will reduce the risk associated with devastating wildfires that have become
part of California’s “new normal,” due to climate change conditions. As wildfires increase in
frequency and intensity, it is imperative that thoughtful, comprehensive policies are crafted that help
address this major threat affecting the state’s economy and the achievement of environmental goals.
While we value the author’s leadership in ensuring that wildfire solutions remain a priority for the state
through the introduction of this bill, SCE believes that further changes are needed to improve this bill
and achieve fundamental change that is beneficial to all Californians.

While this bill takes an important step toward wildfire prevention and mitigation by requiring the
development of safety, reliability and resilience plans for utilities, this bill can still be improved to
properly address the comprehensive solutions our state needs. Roughly a quarter of SCE’s service
territory, covering about 9 million acres, is considered high fire-risk areas. SCE has developed a
comprehensive approach to identifying wildfire risks, eliminating or reducing these risks and
responding to wildfire events as they occur. We employ several approaches that identify and mitigate
fire risks, including vegetation management, pole inspections and upgrades and partnerships with fire
agencies. This bill would complement SCE’s commitment to provide a safe, reliable and resilient
system, while providing a general framework to mitigate the impacts of wildfires.

Wildfire mitigation plans are just one important piece of the comprehensive legislative solution set
needed to address the devastating impacts of wildfires. As Governor Brown and legislative leaders
acknowledged and highlighted in a March statement, solutions should “update liability rules and
regulations for utility services in light of a changing climate and the increased severity and frequency
of weather events.” An updated standard of liability to address the significant impacts of climate
change and year-round wildfire seasons must move away from the current structure of allowing what is
essentially limitless utility liability, and instead include appropriate cost recovery standards. SCE
understands that utilities need to be part of the prevention of wildfires and should be held responsible if
there is serious misconduct that causes a wildfire; however, there must be a sharing of the increasing
risk of climate change impacts across society.

Without including policy components to address these critical issues in a bill such as this, the solution
set is incomplete and provides a false sense of progress. Failure to thoroughly address liability will

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lead to significant impacts on the state’s economy and utility customers, creating financial instability
for utilities, raising insurance premiums for all Californians and discouraging investors from California
investments. Achieving the state’s greenhouse gas and clean energy goals also depends on the
investor-owned utilities’ push to modernize the grid, requiring billions of dollars of investment. The
cost of capital for these projects increases if a comprehensive solution is not achieved, and we must not
lose sight of the need to achieve this objective, as our state leaders have called for.

SCE reiterates our commitment to being part of the discussions and solutions that will allow the state
to change the way we all think about, plan and respond to wildfires. We must be nimble and
acknowledge that the current structure is unsustainable and requires comprehensive solutions to
mitigate risk, protect citizens, customers and businesses, and to align public policy to current and
future realities.

Thank you for the opportunity to comment on SB 1088. SCE looks forward to working with the
author, state policymakers, regulators and the courts to immediately engage all stakeholders and
address the elements of this profound statewide risk.

Sincerely,

Darren Bouton
Director, State Public Affairs

cc: Senator Bill Dodd

Senator Mike Morrell, Vice Chair, Senate Committee on Energy, Utilities and Communications
Members, Senate Committee on Energy, Utilities and Communications
Committee Consultant, Senate Committee on Energy, Utilities and Communications