WILDFIRES COST AND DISCOVERIES
DRAFT REPORT.
THE COMMISSION WAS CREATED BY SB
NINE A ONE STATUTES OF TWO
THOUSAND EIGHTEEN THE
COMMISSION'S CHARGE WAS TO
EXAMINE ISSUES RELATED TO
CATASTROPHIC WILDFIRES.
ASSOCIATED WITH UTILITY
INFRASTRUCTURE.
SB NINE A ONE FOR THE REQUIRED
THAT THE COMMISSION PROVIDE THE
LEGISLATURE WITH OPTIONS FOR THE
SOCIALIZATION OF COSTS
ASSOCIATED WITH CATASTROPHIC
WILDFIRES.
IN OPTIONS FOR THE ESTABLISHMENT
OF A FUND. TO ASSIST IN THE
PAYMENT OF COSTS ASSOCIATED WITH
CATASTROPHIC WILDFIRES.
THE COMMISSION IS HELD THE
REQUISITE FOR HEARINGS AND
RELEASES DRAFT REPORT WITH
RECOMMENDATIONS.
JUST ABOUT TEN DAYS AGO.
JUST LAST FRIDAY THE COMMISSION
HELD ITS FINAL HEARING IT
ADOPTED REPORT.
WITH A FEW MODIFICATIONS I
UNDERSTAND THE FINAL REPORT WILL
BE FORTHCOMING SHORTLY -- I
MIGHT ADD AHEAD OF THE STATUTORY
DEADLINE SO THANKS FOR THE HARD
WORK FOR THE THIS COMMISSION IS
A LOT OF WORK PUT IN.
AND I GET ADDITIONAL REQUESTED --
WHEN?
OUR SPEAKERS TO COME UP --
PROBABLY THE SPEARMEN TO TALK A
LITTLE BIT ABOUT THE DIFFERENCES
BETWEEN -- YOU KNOW WHAT YOU HAD
BEFORE AND WHAT YOU LEARNED.
AND MODIFICATIONS THAT WERE DONE
AT YOUR MOST RECENT MEETING.
TODAY -- WE HAVE THREE PANELS.
PANEL ONE WILL BE CARLA
DETERMINE WHO JOINS US AGAIN AS
THE GOVERNOR'S APPOINTEE THE
COMMISSION CHAIR. TO PROVIDE AN
OVERVIEW OF THE ENTIRE DRAFT
REPORT.
THE SPEARMAN WILL BE FOLLOWED BY
THE AUDIBLE RICARDO LARA
COMMISSIONER OF INSURANCE WHO
GIVE US PERSPECTIVES ON
INSURANCE ISSUES.
THAT ARE ADDRESSED THROUGHOUT
THE REPORT.
FINALLY PROFESSOR WHAT MICHAEL
WAR OF THE SENATE'S COMMISSION
APPOINTEE WILL REVIEW THAT PART
OF THE REPORT PERTAINING TO COST
RECOVERY ISSUES.
IN A WILD FIRES VICTIMS A
WILDFIRE VICTIMS BUT BEFORE WE
BEGIN I'D LIKE TO EXPRESS OUR
APPRECIATION TO THE SPEARMEN.
PROFESSOR WAR AND BY EXTENSION
THE OTHER THREE COMMISSIONERS.
IN THE GOVERNOR'S OFFICE OF
PLANNING RESEARCH FOR THE
INCREDIBLE AMOUNT OF HARD WORK
THEY'VE CONTRIBUTED IN PREPARING
IN PRODUCING THE REPORT WE HAVE
BEFORE US I WANT TO THANK YOU
ALL VERY.
VERY MUCH WOULD ANY OF THE OTHER
COMMITTEE MEMBER -- MEMBERS --
LIKE SAY A FEW WORDS BEFORE WE
BEGIN THE FIRST -- PRESENTATION
[inaudible]
SEEING NONE -- MISTREATMENT
PLEASE COME FORWARD AND AND
WELCOME.
GOOD AFTERNOON GOOD AFTERNOON.
SENATOR DODD AND COMMITTEE
MEMBERS THANK YOU FOR INVITING
ME BACK TO SPEAK WITH YOU AGAIN
AND TO UPDATE YOU ON THE
PROGRESS THAT THE NINE OH ONE
COMMISSION HAS MADE SINCE WE
LAST CONVENE.
I THINK SENATOR DODD FOR GIVING
MORE MORE OF THE BACKGROUND ON
THE STATUS OF WHERE WE ARE.
I WON'T REPEAT THE PROCESS
INFORMATION THAT I SHARED WITH
YOU AT THE LAST MEETING.
I'LL JUST HIGHLIGHT THAT.
AS A SENATOR NOTED WE DID ADOPT
THE FINAL REPORT ON FRIDAY.
I WOULD SAY THAT THE FINDINGS
AND RECOMMENDATIONS THAT WE
ADOPTED WERE VERY SIMILAR TO
WHAT WAS IN THE DRAFT REPORT.
AFTER DISCUSSION AMONG THE
COMMISSIONERS WE DID ADD SOME
ADDITIONAL INFORMATION INTO
THOSE FINDINGS AND
RECOMMENDATIONS ARE REGARDING
CHALLENGES AS WELL AS SOME OF
THE DIFFERENT LEGAL
INTERPRETATIONS AND APPROACHES
ONE MIGHT TAKE -- BUT FOR THE
MOST PART THEY REMAINED THE SAME
AND WE CAN GO INTO SPECIFICS
LATER.
SO I WAS ASKED JUST TO GIVE AN
OVERVIEW OF THE COMMISSION'S
REPORT NOW THAT IT IS PUBLIC.
AND I APPRECIATE THAT.
MOST OF YOU HAVE ALREADY READ
THE REPORT AND IS A LOT IN THERE
SO I WON'T GO LINE BY LINE.
GOOD AFTERNOON SENATOR BUT I DID
WANT TO AT A HIGH LEVEL TOUCH
UPON OUR FINDINGS AND
RECOMMENDATIONS.
SO AT A HIGH LEVEL WE FOUND THAT
UTILITY COSTS FIRES HAVE BEEN
SOME OF THE MOST DESTRUCTIVE
FIRES IN THE SUCH UTILITIES MUST
TAKE A LEADERSHIP ROLE IN
MITIGATING RISK.
WE ALSO FOUND HOWEVER THAT WILD
FIRE RISK IS CREATED BY MULTIPLE
PARTIES WHO SHOULD ALL BE
INCENTIVIZE TO REDUCE RISK.
AND SHARING PAYING FOR SOME OF
THE WILDFIRE DAMAGE.
AND THAT ALSO INCREASED
TEMPERATURES AN INCREASE
POPULATION IN CALIFORNIA.
HAS EXASPERATED THE AMOUNT OF
DAMAGE WERE SEEN FROM THESE
FIRES.
THE ONE OF THE CHALLENGES THAT
THE COSTS AND DAMAGES ASSOCIATE
WITH WILDFIRES ARE NOT WELL
UNDERSTOOD IN HARD TO PREDICT.
THE LAST TWO YEARS COULD HAVE
BEEN AND WANTED TWENTY YEAR
EXPERIENCE OR A ONE A TWO
HUNDRED AND FIFTY YEAR
EXPERIENCE.
WHICH MEANS THAT WE NEED TO BE
PREPARING FOR A RANGE OF
POTENTIAL RISK SCENARIOS
ESPECIALLY AS WE SEE HOW
IMPACTFUL THE STATE'S WILD FIRE
MITIGATION EFFORTS ARE.
AS A WILDFIRE LIABILITIES
INCREASE WE FIND THAT UTILITY
INSURANCE HAS HISTORICALLY THAT
HAS HISTORICALLY BEEN AVAILABLE
TO COVER WILDFIRE COST.
IS NOT AVAILABLE AT THE LEVELS
NECESSARY THERE ARE VERY FEW
INSURERS IN THE MARKET IN
PREMIUMS HAVE INCREASED
SUBSTANTIALLY THESE ARE PREMIUMS
THAT ARE PAID BY ELECTRICITY
CUSTOMERS.
WE ALSO FOUND THAT THE HOME
INSURANCE MARKET IS BECOMING
MORE DIFFICULT AND MORE
EXPENSIVE TO OBTAIN HOME
INSURANCE AND HIGH WILD.
AREAS AND THAT EVEN WILD FIRE
VICTIMS WITH INSURANCE POLICIES
FACE CHALLENGES INCLUDING HIGHER
REBUILDING COST AND NON RENEWALS.
WE HAVE SEVERAL FINDINGS THAT
REINFORCE THAT GIVEN THE GREATER
RISK FOR BIGGER FIRES THE STATUS
QUO IS NOT SUSTAINABLE FOR
VICTIMS.
CALIFORNIANS LIVING IN THE FIRE
AREAS UTILITIES ELECTRIC
CUSTOMERS.
FULLER WE FIND THAT THE
LIABILITY FRAMEWORK THAT ASSIGNS
COSTS TO UTILITIES REGARDLESS OF
FAULT.
LESS SPECIFIC STANDARDS FOR
UTILITY COST RECOVERY FOR FIRES.
AND INSURANCE POLICIES THAT DO
NOT FULLY ADDRESS WILDFIRE
DAMAGE OR INCORPORATE WILD FIRE
RISK PREVENTION.
COLLECTIVELY RESULT IN
UNCERTAINTY REGARDING THE
COVERAGE OF COST AND SETTLEMENT
OF WILDFIRE CLAIMS.
IT'S ALSO PRESENTS A GREATER
INVESTMENT RISK AND RISK OF
BANKRUPTCY FOR CALIFORNIA TO
LADIES.
AND ALSO CAN LEAD TO HIGHER
COSTS FOR ELECTRIC CUSTOMERS WHO
ALREADY SEEING RISING RATES.
THE COMBINATION OF THESE FACTORS
IN CALIFORNIA UTILITIES ACROSS
THE STATE AND IT'S ALL UTILITIES
ACROSS THE STATE PUBLIC AND
PRIVATE.
RESULT IN OUR UTILITIES BEING
PERCEIVED AS HIGHER RISK.
MAKING UTILITY FINANCING AND
INVESTMENTS MORE EXPENSIVE AND
WEAKENING THE ABILITY OF
UTILITIES TO PROVIDE CLEAN
RELIABLE AND AFFORDABLE ELECTRIC
SERVICES.
SO HERE ARE KEY RECOMMENDATIONS.
WE PLACE THE CURRENT STRICT
LIABILITY INTERPRETATION OF
INVERSE CONDEMNATION WITH THE
FALL BASED STANDARD.
MAKE CHANGES TO THE STANDARD FOR
INVESTOR OWNED UTILITY COST
RECOVERY FOR WILDFIRE COST.
THAT ACKNOWLEDGE THE NASCENT
UNDERSTANDING OF PRUDENT ACTION
FOR WILDFIRE REDUCTION AND
BETTER ACCOUNT FOR SOME OF THESE
EXHAUSTION IS FACTORS THAT CAN
LEAD TO MORE DAMAGE LIKE CLIMATE
CHANGE.
IN PARTICULAR REGARDING COST
RECOVERY WE RECOMMEND ADOPTING
THE FOR BURDEN OF PROOF STANDARD
FOR COST RECOVERY.
REFINEMENT OF THOSE SB NINE A
ONE FACTORS THAT THE C. P. U. C.
SHOULD CONSIDER AND ASSESSING
DISALLOWANCE IS.
AND A CAP ON MAXIMUM UTILITY
INVESTOR LIABILITY SOMETHING
LIKE A STRESS TEST.
IF YOU TO THE SHAREHOLDERS HAVE
SUBSTANTIALLY CONTRIBUTED TO
WILD TO A WILDFIRE FIND.
WE ALSO RECOMMEND THE CREATION
OF A WILD FIRE VICTIMS CLAIMS
PAYING FUND THAT IS BROADLY
SOURCED.
INCLUDING FUNDING BY
SHAREHOLDERS RATE PAYERS AND
HOMEOWNERS.
UTILITY SHAREHOLDERS WOULD BE
REQUIRED TO REPAY BACK THE FUN A
SPECIFIED AMOUNT IF FOUND TO BE
IMPRUDENT.
WE ALSO RECOMMEND OTHER ACTIONS
TO ENSURE UTILITY ACCOUNTABILITY
INCLUDING GREATER FIND AUTHORITY.
WE ALSO MAKE A SERIES OF REFORMS
RECOMMENDATIONS OF A HOMEOWNER
INSURANCE MARKET TO MAINTAIN
AVAILABLE AND AFFORDABLE
INSURANCE.
INCLUDING MAINTAINING
CALIFORNIA'S RISK BASED PRICING
OF INSURANCE -- AS ONE OF THOSE --
KEY RECOMMENDATIONS AND THEN
FINALLY WE OFFER SOME
RECOMMENDATIONS ON MITIGATING
FIRE RISK AND BETTER
STREAMLINING RISK INVESTMENT.
SPECIFICALLY THE REPORT
RECOMMENDS THAT WE ADDRESS THE
DECENTRALIZED -- INCONSISTENT
WAY IN WHICH WE INVEST IN
REGULATE WILDFIRE MITIGATION.
BY CREATING AN ELECTRIC UTILITY
WILDFIRE BOARD OR ANOTHER
VEHICLE TO GOVERN UTILITY
WILDFIRE PREVENTION.
WE ALSO RECOMMEND TAKING ACTIONS
TO SIGNIFICANTLY INCREASE
CONSISTENCY OF PRIVATE PROPERTY
MAINTENANCE LAWS AND
FIREFIGHTING SERVICES AVAILABLE
TO PROPERTIES.
AND AS I NOTED BEGINNING ON
FRIDAY WE SPENT A LOT OF TIME
DISCUSSING THE FACT THAT EACH OF
THESE RECOMMENDATIONS HAS
POTENTIAL LEGAL AND
IMPLEMENTATION CHALLENGES.
AND THE REPORT EXPANDS UPON US
SOME OF THOSE BUT I JUST WANTED
TO HIGHLIGHT SOME OF THOSE FOR
YOU TODAY. FOR EXAMPLE A STRICT
LIABILITY THEIR DIFFERENCES A
LEGAL OPINION REGARDING HOW
EXACTLY THE LEGISLATURE CAN
ENACT CHANGES.
AND WHAT CONSEQUENCES OF ANY
THERE WOULD BE TO THE HOMEOWNERS
INSURANCE MARKET WITH THAT
DIFFERENT INTERPRETATION.
REGARDING COSTS RECOVERING IT IS
A CHALLENGE TO ENSURE THAT THE
CPUC STILL HAS THE AUTHORITY AND
DISCRETION TO DECIDE REASONABLE
RATES AND THAT ELECTRIC
CUSTOMERS AREN'T UNDULY ON THE
HOOK FOR WILDFIRE.
ACOSTA THERE'S UTILITIES
MISMANAGEMENT WHILE PROVIDING
SOME MORE CERTAINTY TO UTILITY
INVESTORS REGARDING HOW THESE
COSTS CLAIMS WILL BE EVALUATED
AND CONSIDERED.
AND THEN REGARDING A FIND.
THE REPORT GOES INTO A LOT OF
DETAIL ABOUT SOME OF THE
POTENTIAL CHALLENGES HERE BUT
THAT INCLUDE NOT PERVERSELY.
INCENTIVIZE THE RISKY BEHAVIOR
WE STILL WANT TO MAKE SURE THAT
HOMEOWNERS GET HOME INSURANCE.
ONE OF THE CHALLENGES AS WELL AS
IF YOU WANT A SHAREHOLDER
CONTRIBUTION HOW IS THAT
CONTRIBUTION GOTTEN STRUCTURED
FROM A UTILITY LIKE P. JEANNIE --
THAT'S GOING THROUGH THE
BANKRUPTCY PROCESS.
THEN ALSO ONE KEY COMPONENT OF A
FINE IS MAINTAINING SETTLEMENT
VALUE LEVELS A SIMILAR TO WHAT'S
HAPPENED DOWN IN SOME OF THE
FIRES TO DATE BETWEEN THE
SETTLEMENTS TING INSURANCE
COMPANIES IN THE UTILITIES.
HOW DO YOU MAINTAIN THE
SUBROGATION LETTERS LEVELS AND
PUT THAT INTO LEGISLATION?
THE KNOWLEDGE THAT IF YOU DON'T
ADDRESS THESE CHALLENGES THE
SIZE OF A FIND HOW BIG WOULD
NEED TO BE COULD BE BIGGER AND
SO IT'S IMPORTANT TO UNDERSTAND
HOW THE STEPS TO BE DONE -- AS
YOU THINK ABOUT THIS AND
LEGISLATION.
I'M SICK ALL THE CHALLENGES WE
DID NOT GET CONCLUSIVE EVIDENCE
REGARDING HOW YOU WOULD.
DEAL WITH THEM AND LEGISLATE
THEM I THINK THERE ARE SOME GOOD
IDEAS OUT THERE.
BUT WE WANTED TO MAKE YOU AWARE
OF THE CHALLENGES BUT AS A BODY
WE THOUGHT IT WAS IMPORTANT TO
TRANSMIT TO YOU.
AS A BROADER SET OF POSSIBLE
RECOMMENDATIONS THAT WE THOUGHT
WOULD BE WORTH WHILE YOU'RE AT
REVIEW A CONSIDERATION.
SO WITH THAT THANK YOU FOR YOUR
TIME I LOOK FORWARD TO YOUR
QUESTIONS [inaudible]
QUESTIONS.
THAT ARE HILL THANK YOU MISTER
CHAIR AND THE COMMISSION PETER
AND THANK YOU FOR BEING HERE AND
FOR YOUR HARD WORK AND A YEAR.
THE TREMENDOUS DEDICATED PUBLIC
SERVANT AND THANK YOU FOR THAT.
I AM CURIOUS ABOUT THE ELECTRIC
UTILITY WILDFIRE BOARD AND AS IT
WAS -- POSED IN THE IN THE
REPORT IT'S NOT REALLY SETS OUT
RULES AND REGULATIONS AND
PROCEDURES FOR ALL UTILITIES
COULD MANDATE RATE YOU KNOW
THERE'S A WHOLE LIST OF THINGS
THAT IT CAN DO DEVELOP IN OUR A.
D. HAVE FINE AND PENALTY IS --
FORTY BUT ASIDE FROM THE
INCLUSION OF THE FUEL USED IN
THE AT THE E. U. W..
BOARD HOW DOES THIS BOARD DIFFER
FROM THE CURRENT CHIEF UC.
OPERATIONS AND RESPONSIBILITIES.
WE HAD A GOOD DISCUSSION ABOUT
THIS ON FRIDAY AND THE AUTHORS
OF THOSE RECOMMENDATIONS REALLY
HIGHLIGHTED THAT THEY BROUGHT
THIS IDEA OF A VEHICLE FORD
BECAUSE OF THE NEED TO FOCUS ON
THESE ISSUES.
THAT THERE ARE THESE EFFORTS AS
YOU NOTED HAPPENING AT THE P.
YOU SEE AND ARE ALSO HAPPENING
AT EACH PUBLICLY OWNED UTILITY.
BUT GIVEN THE URGENCY OF THE
ISSUE IT MIGHT MAKE SENSE TO
HAVE A NEW STANDING BODY THAT IS
CONCENTRATED ON THESE TOPICS --
IN TERMS OF THE DIFFERENCE FROM
THE P. YOU SEE AGAIN I THINK IT
COMES DOWN TO A MATTER OF
RESOURCES AS MUCH AS ANYTHING --
IF YOU STATUS IN NEW BOARD THERE
WOULD OF COURSE BE ATTENTION TO
WHAT RESOURCES WOULD BE NEEDED.
THOSE ARE ALSO RESOURCES THAT
COULD BE DEPLOYED AT THE P. YOU
SEE AS WELL TO ADDRESS SOME OF
THESE SAME CONCERNS.
BUT I THINK WE FELT IT WAS
IMPORTANT TO RAISE THIS ISSUE
FOR YOU AND TO THINK ABOUT HOW
DO YOU ELEVATE IT EITHER WITH AN
AGENCY OR WITH A NEW BODY.
WAS THERE ANY TALK.
WAS THERE ANY DISCUSSION AS TO
HOW YOU WOULD DEAL WITH SOME OF
THE IF THERE'S SOME BUT YOU DO
PRETORIA RULINGS THAT WOULD COME
FROM THAT AN APPEAL PROCESS OR
AND HOW THAT WOULD.
A WITH THE NEW BOARD HOW WITH TO
PROCESS BE ADMINISTERED IN THERE
TO GET INTO THE DETAILS OF THAT
MUCH SURE IT DID NOT GET INTO
THOSE DETAILS ONE OF THE
CHALLENGES THAT WE DID DISCUSS
THOUGH WAS.
MAKING SURE WE DON'T HAVE. TWO
DIFFERENT REGULATORS THEY'LL BE
OPINING ON THE SAME ISSUE AND WE
APPRECIATE THAT THE PUBLIC
UTILITIES COMMISSION -- IS BY
THE CONSTITUTION THE ECONOMIC
REGULATOR FOR THE I. O. U.'S AND
SO IF YOU WERE TO HAVE A
SEPARATE BOARD.
YOU WOULD WANT TO MAKE SURE
WHATEVER DECISIONS THAT THEY'VE
PASSED OUR OUR BINDING --
IMPROPERLY FLOW THROUGH THE P.
YOU SEE BUT I WOULD SAY THAT IS
A CHALLENGE.
ANOTHER ISSUE THAT I REASON OUR
DISCUSSION WAS AT THE P. YOU SEE
DOES OVERALL SAFETY OVERSIGHT
FOR THE INVESTOR OWNED UTILITIES
AND THERE AR SEVERAL OTHER
PROCESSES IN PLACE ARE RELATED
TO WILDFIRES.
SEED ONE ALL OF THESE TO BE
COORDINATED AND HARMONIZED THIS
INCLUDES THE ONE ONE NEW NEW
BOARD END OF HOW WOULD THE NEW
BOARD -- YOU KNOW THERE'S
STREAMLINING.
PROCESS SEASON AND PROCEDURAL
DESIGNATIONS IN THIS THE
GOVERNOR SHRIKE FORCE THEY WERE
TALKING ABOUT THE STREAMLINING
EFFORT -- DO YOU SEE THAT THIS
COULD.
OF THE CREATION THE NEW NEW
BOARD COULD ACCOMPLISH THAT OR
IS IT JUST MERELY TRANSFERRING
THOSE SAME IMBEDDED PROBLEMS AT
THE CPUC HAS TO THE NEW BOARD
THAT -- AND THE NEW STRUCTURE IT
IS A BEEN ANY DISCUSSION AS TO
HOW THAT WOULD.
WOULD BE IMPLEMENTED A COULD BE.
IT WAS NOT -- IN EFFECT THE
RESEARCHER THANK YOU -- ONE OF
THE COST RECOVERY OPTIONS
PRESENTED IN THE IN THE WELL IN
YOU'VE MENTIONED IT -- WAS THE
CHANGE -- FROM THE PRUDENCE THE
PRESUMPTION OF PRUDENCE RATHER
THAN THE PRESUMPTION OF
IMPRUDENCE.
OF MORE ALIGNED TO THE FOR MODEL
OF DOING THAT -- IN YOU
MENTIONED THAT THAT IS THE CASE
CAN YOU CAN YOU EXPLAIN A LITTLE
BIT OF THE HISTORY BEHIND THE C.
P. UC'S PRESUMPTION.
OF PRUDENCE AND HOW THAT CAME
ABOUT AND AND WHAT YOU CAN DIG
DOWN A LITTLE BIT INTO THAT
WHOLE ISSUE OF OF DETERMINE
LIABILITY AND PRUDENCE.
SURE SO THE THE WAY IN WHICH
THAT THE P. YOU SEE CURRENTLY
DOES.
PREVIOUSLY REQUIRES THAT THE
UTILITIES PROVE BEYOND
PROPONENTS OF EVIDENCE THAT
COSTS ARE JUST AND REASONABLE.
AND THAT IS THE STANDARD A
METHOD THAT'S USED ACROSS ALMOST
ALL PUBLIC UTILITIES COMMISSION
AND ACROSS OTHER MATTERS THAT
ARE DEALT WITH IN THE P. YOU SEE --
THERE HASN'T BEEN MUCH
EXPERIENCE WITH LITIGATING COSTS
RELATED TO CATASTROPHIC
WILDFIRES HAS ONLY BEEN ONE
PARTICULAR CASE BEFORE THE PC.
THE PC DECIDED NOT TO PASS ALONG
THOSE COST OF THOUGH -- THAT
SHOULD NOT BE A SOON TO BE
PRESIDENT FOR OUR FUTURE CASES.
I THINK ONE OF THE THINGS THAT
WE HEARD WHICH IS A CHALLENGES
THAT.
THIS IS IN RELATIVELY NEW AREA
FOR THINKING ABOUT WHAT IS
PRUDENT.
AND SO DETERMINING WHAT PRUDENT
BEHAVIOR IS CAN BE CHALLENGING
AND OVER TIME IT SHOULD BE
EASIER AS WE HAVE THINGS LIKE
THE WILD FIRE MITIGATION PLANS
ACTIVE.
AND MORE COLLECTIVE EXPERIENCE.
BUT GIVEN THAT THE LIMóN
EXPERIENCE WE HAVE.
ENDED I THINK SIGNIFICANT
CONCERN FROM INVESTORS THAT IT'S
NOT CLEAR UP FRONT WHAT THE
UTILITY SHOULD BE DOING.
WE TRIED TO THINK ABOUT WHAT
WOULD BE A REASONABLE STEP AT
THIS TIME -- IN TERMS OF
RECONCILING SOME OF THOSE
CONCERNS IN NOT WANTING TO WE
ACTUALLY RECOMMEND AGAINST
HAVING A PRESET STAY AT A PRE
SET LIST.
OF ACTIVITIES THAT ARE
CONSIDERED PRUDENT BECAUSE WE
THINK IT'S TOO MUCH SHORT TOO
PREMATURE TO DO THAT -- BUT WE
DO THINK.
THAT IS NOT UNREASONABLE TO DO
IT FOR DOES WHICH IS ASSUME THAT
THE UTILITIES HAVE BEEN PRUDENT.
AND THEN COLLECT EVIDENCE TO THE
CONTRARY THIS IS NOT MEAN THE
UTILITY DOESN'T HAVE TO MAKE ITS
CASE THEY DO -- BUT IT DOES
SHIFT THE BURDEN -- I
ACKNOWLEDGE THAT THIS IS A
DEVIATION FROM CURRENT PRACTICE
AND SO I THINK TO BE SUCCESSFUL
IT'S IMPORTANT TO MAKE SURE THAT
INTERVENOR IS THE OFFICER SAFETY
ENFORCEMENT HAVE THE RESOURCES
TO DO THEIR OWN ANALYSIS THEIR
OWN MODELING AND THAT THEY GET
SUFFICIENT DATA.
DISCOVERY FROM THE UTILITIES THE
AND THAT WAS MY FIRST GOING TO
BE MY FINAL QUESTION HOW WOULD
THEY GET.
IF WE CHANGE THAT STANDARD HOW
WOULD THEN THE INTERVENOR
WHOEVER'S INVOLVED IN TRYING TO
DETERMINE THAT PRUDENCE OR
IMPROVING STANDARD.
HOW WOULD THEY GET THE DATA THE
INFORMATION AND -- IT'S
NECESSARY TO BUILD A CASE IF
NECESSARY AND SO I THINK IT
WOULD BE THE SAME WAY THAT THEY
CURRENTLY GET THAT INFORMATION --
IF THEY'RE ALLOWED TO GET ACCESS
THROUGH.
THEY TO DISCOVERY THERE WOULD BE
A ACTIVE PROCEEDING -- I THINK
THIS IS REALLY GETTING INTO SOME
FINER POINTS OF THE WEEDS BY
PROCESS WHERE YOU NEED TO GO IS
MAKING SURE THAT PARTIES HAVE
ACCESS TO INTERVIEW --
COMPENSATION TO HIRE CONSULTANTS
AN ANALYST TO DO A SUPPORT THIS
WORK.
AND I WILL SAY THIS IS NOT ME IN
THE EYE YOU TO THE P. YOU SEE
ULTIMATELY MAINTAINS ITS
DISCRETION IN THIS CASE -- AND
WE'LL WAIT THE EVIDENCE -- BUT
IT DOES PROVIDE SOME SHIFTED THE
BURDEN WITHOUT ASSUMING
AUTOMATIC COST RECOVERY.
THANK YOU THANK YOU.
THANK YOU.
CENTER MORE LIKE.
MISTER CHAIR THANK YOU MISS
PETERMAN JUST A FEW QUICK
QUESTIONS THE FIRST THIS IS MORE
OF A DETAIL ORIENTED -- AS YOU
LOOK INTO UTILITY.
ACTIVITY THERE'S A ARE A RULE.
TWENTY EIGHT AND B. AND ALLOWS
FOR CREDITS AND BE ABLE TO USE
THOSE THOSE FUNDS FOR
BEAUTIFICATION TO PERHAPS
UNDERGROUND.
CERTAIN A UTILITY LINES WHAT WAS
THAT REVIEWED BY YOUR COMMITTEE.
IT WAS NOT.
A MODELS -- WE HAVE YOU KNOW IN
CALIFORNIA SOME I USE THAT HAVE
DONE WELL ON BEEN PROACTIVE AND
WE'VE GOT ONE THAT'S CREATED
PLENTY OF I MEDIA.
ATTENTION.
AND WE HAVE OTHER STATES THAT
ALSO HAVE.
FIRE RISKS SO DO WE LOOK AT
MODELS OF HERE'S HOW DID UTILITY
SHOULD RUN HERE'S HOW IT'S DONE
IN.
A STATE THAT HASN'T HAD THE
PROBLEMS REVIEWS WE'VE AT SO
MAKE A COUPLE OBSERVATIONS ALONG
THOSE LINES -- AS A PART OF FROM
WHAT I UNDERSTAND THE WILD FIRE
MITIGATION PLAN PROCEEDING AT
THE P. YOU SEE.
THEY DID TAKE INFORMATION AND
REVIEW WHAT ARE SOME OF THE BEST
PRACTICES IN THIS AREA -- AND SO
THERE'S SOME EXAMPLES OUT THERE.
OTHER STATES HAVE NOT HAD FIRES
OF THIS SIZE NOR DO THEY HAVE
THE AMOUNT FRANKLY OF LAND AND
PROPERTY VALUE IN HARM'S WAY AND
SO THEY HAVE NOT HAD BECAUSE THE
SAME LEVEL OF DAMAGE TO DEAL
WITH.
WE DID GET A PRESENTATION FROM
THE P. YOU SEE IN OUR FIRST
MEETING THAT TALKED ABOUT SOME
OF THE GEOGRAPHIC DIFFERENCES
BETWEEN THE UTILITIES WHICH WILL
MAKE SURE TO PROVIDE.
TO YOUR COMMITTEE BUT ONE THING
THAT IS STRIKING IS THE SIZE OF
THE TERRITORIES THAT WE'RE
TALKING ABOUT AND HOW MUCH OF
THAT TERRITORY IS IN A HI
WILDFIRE RISK AREA.
P. JEANNIE AND WE'LL JUST PUT
MANAGEMENT QUESTIONS AND ISSUES
ASIDE HAS A TERRITORY THAT IS
MORE AT RISK.
P. JEANNIE ALSO HAS A LOWER
PERCENTAGE OF UNDER GROUNDING
AND THAT'S ACTUALLY A RESULT OF
LAW IN ONE OF THINGS THAT WE
HAVE LEARNED ABOUT WAS THERE'S A
LAW ON THE SIXTIES.
THAT MEANT THAT NEW COULD
RESIDENTIAL COMMUNITIES HAD
UNDER GROUNDING WIRES AND SO SAN
DIEGO DEVELOP LATER AND HAS A
GREATER PERCENTAGE OF WIRES
UNDERGROUND.
STILL P. GENIE IS STARTING AT A
DIFFERENT PLACE -- AND SO IT'S
IMPORTANT TO TAKE LESSONS FROM
THE OTHER UTILITIES BUT ALSO
THINK ABOUTJUST PRACTICALLY
WHAT DOES THAT MEAN ON THE
GROUND -- FOR EACH OF THEM.
THE LAST QUESTION AND I DON'T
KNOW HOW.
TO KEEP IT SHORT BUT WE'VE UP
WITH A PAINTING HERE.
AND AND I NEED TO MOVE
ELECTRICITY FROM ONE SIDE TO THE
OTHER.
SO I NEED.
TO TALK TO THE OWNER THEIR
PROPERTY WHETHER IT'S FEDERAL
STATE OR PRIVATE.
SAY I NEED TO MOVE THIS BUT
CRITICS HAVE CUSTOMERS AND I I
NEED TO DO IT.
SO STARTING JUST FROM SCRATCH
LIKE THE LIKE WE'RE JUST
STARTING WITH A CLEAN SLATE.
HOW WOULD I NEGOTIATE WITH THE
UTILITIES SAY HEY I YOU CAN GO
AHEAD AND COME THROUGH MY
PROPERTY?
BUT HERE THE THINGS YOU NEED TO
DO TO MAKE SURE THAT MY PROPERTY
IS NOT.
ENDANGERED OR AT RISK AND WHAT
KIND OF POLICIES AND PROCEDURES
WHAT I PUT IN PLACE.
THAT'S THE BIG QUESTION WHICH I
DON'T HAVE A GREAT ANSWER FOR IT
BUT I'LL SAY.
THERE ARE RULES AND SUCH IN
PLACE REGARDING WHAT ACCESS TO
THE RIGHT AWAY MEANS AND WHAT
MAINTENANCE HAS TO BE DONE --
THERE SEVERAL GENERAL ORDERS
RELATED TO THAT SO I WOULD GO
BACK AND LOOK AND AT THE
EXISTING ORDERS AND SAY ARE THEY
SUFFICIENT ENOUGH -- I WILL SAY
THAT THERE HAVE BEEN UPDATES TO
THE RULES AROUND VEGETATION
MANAGEMENT -- OVER THE LAST
COUPLE YEARS AS RESPONSE TO THE
FIRES AND SO -- ONE QUESTION
WILL BE DO THEY GO FAR ENOUGH --
BUT FROM WHAT I UNDERSTAND WE
HAVE SOME OF THE MOST AGGRESSIVE
RULES IN PLACE FOR PROTECTION OF
THE RIGHT AWAY.
THANK YOU THANK YOU MISTER SIR
JACKSON.
THANK YOU THANK YOU VERY MUCH
AND I SHARE THE H. --
APPRECIATION OF MEMBERS OF THIS
COMMITTEE KNOWING YOUR LONG
STANDING WORK IN IN THIS AREA
AND OTHERS AND YOUR INTELLECT
AND AN ABILITY.
TO SORT OF CULL THROUGH LAW TO
DIFFICULT SCENARIOS -- IN
PREPARING THIS REPORT -- I'M
WONDERING WHAT WAS YOUR NUMBER
ONE PRIORITY.
WHAT WAS YOUR NUMBER ONE FOCUS
IN THIS EFFORT?
SO I WOULD SAY AT LARGE IT WAS
RECOMMENDING A SERIES OF
RECOMMENDATIONS THAT CAN PUT
CALIFORNIA ON THE RIGHT PATH.
AND BY RIGHT PATH I MEAN A
WILDFIRE.
RISKS.
SITUATION A UTILITY HEALTH
SITUATION.
THAT MADE WILD FIRE VICTIMS
BETTER OFF THAT MAKE CUSTOMERS
WHO LIVE IN THE WILDLY INTERVENE
INTERFACE BETTER OFF.
AND THAT MAKE ELECTRIC CUSTOMERS
BETTER OFF [inaudible]
SO.
I SIT HERE IN IN MY NUMBER ONE
CONCERN -- AS SOMEONE WHO IS
BEEN THROUGH A NUMBER OF THESE
EVENTS.
BASED UPON WHERE I LIVE BASED
UPON.
THE INTENSITY OF CLIMATE CHANGE
AND BASED UPON HAVING JUST HAD.
ONE OF THE MAJOR FIRES IN
CALIFORNIA HISTORY.
MY CONCERN IS PUBLIC SAFETY.
AND OF PROTECTING LIFE AND
PROPERTY.
SO WHEN YOU TALK ABOUT -- THE
CONCERN OF CHANGING THE BURDEN.
OF FROM A STRICT LIABILITY -- TO
A FAULT BASED SYSTEM.
THE FIRST THING THAT COMES TO MY
MIND IS THAT WE'VE HAD A STRICT
LIABILITY SYSTEM.
AND YET THOSE COMPANIES WHO.
RECOGNIZE THAT THEY ARE GOING TO
BE LIABLE IF THEIR EQUIPMENT
CAUSES OF FIRE -- HAVEN'T TAKEN
THAT RESPONSIBILITY PARTICULARLY
SERIOUSLY.
IF WE THEN REDUCE THAT
REQUIREMENT TO A FALSE A FULL TO
BASED STANDARD HOW IS IT THAT
WE'RE GOING TO FIND THOSE
COMPANIES.
TAKING THEIR RESPONSIBILITY
SERIOUSLY WHEN THEY NO LONGER
ARE GOING TO BE HELD LAW OR
LIKELY TO BE HELD A 100%.
LIABLE.
SO IT COULD YOU COULD YOU
EXPLAIN THE THINKING ON THAT
BECAUSE IF THEY'RE NOT WILLING
TO DO WHAT THEY SHOULD DO TO
PROTECT AGAINST CEASE FIRES NOW
WITH A WITH ESSENTIALLY AN
ABSOLUTE LIABILITY HOW DO YOU
THINK.
OF THAT THEY'RE GOING TO TAKE
THAT RESPONSIBILITY SERIOUSLY
WHEN THEIR LIABILITY IS ACTUALLY
REDUCED.
SO I THINK THAT THE MOTIVATION
FOR TAKING A FIRE SERIOUSLY IS
FIRST OF ALL.
IT JUST STARTING TO UNDERSTAND
THE LIKELIHOOD IN PREVALENCE OF
THESE FIRES REALLY UNDERSTANDING
THE WILD FIRE RISK.
AND THEN ALSO IDENTIFYING WATER
WAYS IN WHICH TO MITIGATE THAT
RISK AND THOSE ARE BOTH THINGS
THAT I THINK WE'VE ALL
COLLECTIVELY COME TO A BETTER
UNDERSTANDING OF IN THE LAST.
TWELVE TO TWENTY FOUR MONTHS.
AND SO WE DID NOT GET TESTIMONY
FROM THE UTILITIES AND THAT THE
PRESENCE OF THAT STRICT
LIABILITY STANDARD WAS THE
MOTIVATING FACTOR IN TERMS OF
THEM REDUCING WILD FIRE RISK.
SO I THINK THE WAY THAT WE GET
THAT ACTION IS TO MAKE SURE THAT
WE YOU REQUIRE MEDICATION THAT
WE INVEST IN MITIGATION.
AND THAT'S ONE OF THE REASONS.
WHY I CAME TO THE PLACE OF
UNDERSTANDING AND BELIEVING THAT
WE NEED TO MAKE SURE THAT OUR
UTILITIES?
BUT PEOPLE WANT INVEST IN OUR
UTILITIES BECAUSE WE NEED THAT
INVESTMENT IN ORDER TO FUND THIS
MEDICATION THAT WE'RE TALKING
ABOUT.
I THINK ONCE YOU START SETTING
THE STANDARDS IN PLACE AND YOU
PUT IN A PLACE. TO HAVE THE
STANDARDS INVOLVED THEN YOU MAKE
SURE THAT IF UTILITY MANAGEMENT
DOES NOT ACT PRUDENTLY THAT
THERE ARE FINES AND PENALTIES.
I THINK AGAIN OVER THE NEXT FEW
YEARS OUR COLLECTIVE
UNDERSTANDING OF WHAT IS PRUDENT
MANAGE IT WHAT IT WHAT IS BEING
A PRINT MANAGER WILL BECOME MORE
CLEAR.
AND THEN IT'LL BE EASIER. TO THE
WHOLE THE UTILITIES ACCOUNTABLE.
WHEN THEY'RE AT FAULT
[inaudible]
SO.
YOU SAY THAT OUR COLLECTIVE
UNDERSTANDING OF PRUDENT
MANAGEMENT WILL BECOME CLEAR WHO
IS GOING TO MAKE THIS CLEAR ARE
WE GOING TO LOOK TO THE P. YOU
SEE.
BECAUSE THE P. YOU SEE -- HS
ACKNOWLEDGE I THINK A ONE OF OUR
HEARINGS THAT THEY DON'T HAVE
THE CAPACITY THEY'RE NOT EXPERTS
IN THIS FIELD.
SO WHERE ARE YOU GOING TO BE
LOOKING -- TO GET ASSURANCES AT
SO THAT THE PUBLIC HAS
CONFIDENCE THAT THERE THAT THERE
IS PRUDENT MANAGEMENT OF OUR
ELECTRICAL SYSTEMS SO THAT WE
ARE WHEN WHEN SOMEONE COMES AND
SAYS -- I'M NOT SURE I WANT TO
LET YOU PUT AN EASEMENT ACROSS
MY LAND.
NOW WE HAVE TO DO THAT AND
THAT'S WHEN THE REASONS WE HAVE
INVERSE CONDEMNATION.
RIGHT BECAUSE YOU ARE TAKING
AWAY SOMEONE'S ENJOYMENT OF
THEIR PROPERTY -- IN ORDER FOR A
GREATER GOOD THEORETICALLY AND
IF SOMETHING HAPPENS THAT
IMPAIRS THAT ENJOYMENT THE I AEA
FIRE.
THAT THAT COMPANY OR WHOEVER IT
IS NEEDS TO TAKE RESPONSIBILITY
FOR IT SO.
HOW WE GONNA GET TO THAT PLACE --
WHO'S GOING TO BE THE ONE TO
DECIDE WHAT PRUDENT MANAGEMENT
IS.
OUR RECOMMENDATION IS STILL TO
MAINTAIN THAT FUNCTION AT THE
PUBLIC UTILITIES COMMISSION.
AS YOU NOTED THE PUBLIC
UTILITIES COMMISSION MAY HAVE
TOLD YOU THAT THEY DON'T HAVE
THAT EXPERTISE AND THEY DON'T
HAVE THE EXPERTISE THE WAY THAT
HAVE THE EXPERTISE SURROUNDS --
OTHER INVESTMENTS I CAN GAS FOR
EXAMPLE BUT I THINK THE
CHALLENGES THERE'S THE EXPERTISE
ISN'T WIDELY OUT THERE PERIOD
RIGHT BECAUSE WE'RE TAKING
ABOUT A COMBINATION OF THINGS
IT'S WHAT DOES IT MEAN TO SAFELY
OPERATE ONE INDIVIDUAL PIECE OF
EQUIPMENT.
WHICH THERE IS A LOT OF
EXPERIENCE ON AND THEN WHAT IS
IT MEAN TO OPERATE THAT
EQUIPMENT SAFELY GIVEN THE
POSSIBILITY THAT IT MIGHT IGNITE
A FIRE WHICH MAY LEAD TO A
SIGNIFICANT AMOUNT OF HUMAN AND
ECONOMIC DAMAGE.
WHICH IS HARD TO FIGURE OUT HOW
MUCH THAT WILL BE AND SO THERE'S
A SEVERAL THINGS THAT HAPPEN
BETWEEN AT MISSION AND WHEN WE
GET TO THE POINT WHERE WE HAVE
WILD FIRE VICTIMS AND I THINK
WHAT ARE REPORTING KNOWLEDGES.
IS THAT THERE ARE SEVERAL
DIFFERENT STAKEHOLDERS THAT HAVE
SOME ROLE IN THAT PROCESS AND
THEREFORE WE THINK THAT THE
RESPONSIBILITY FOR MEDICATION
INVESTMENT AND RECOVERY OF COSTS
SHOULD SPREAD ACROSS ALL THOSE
DIFFERENT STAKEHOLDERS -- I'LL
JUST SAY ALSO IT'S MY
UNDERSTANDING TO THAT THE P. YOU
SEE IS DEVELOPING ITS CAPACITY
MORE -- BUT THAT'S WHY WE SAID
IF THERE IS A NOTHER ENTITY THAT
THE STATE FEELS MORE COMFORTABLE
WITH CONCENTRATING THAT
KNOWLEDGE IN THAT IS SOMETHING
WORTH PURSUING AS WELL WHEN I
TALK TO EXPERTS OUT THERE
EVERYONE'S TRYING TO FIGURE THIS
OUT AT THE SAME TIME INSURANCE
COMPANIES UTILITIES THE
REGULATORS.
ABOUT WHAT IS A REASONABLE
MITIGATION -- AND HAD OF THOSE
COSTS COMPARE WITH OTHER COST
THAT WE WANT INVESTMENT YOU WANT
THE TILDE THREE MAKING.
SO IF I MET ONE LAST QUESTION.
SO -- WE LOOK NOW OUR I THINK
MANY OF US LOOK NOW TO THE WORK
THAT'S BEEN DONE BY SAN DIEGO
GAS ELECTRIC IS A RESULT OF THE
PC HOLDING THEM RESPONSIBLE IF
YOU WELL WITHOUT THE ABILITY.
TO GET REIMBURSED AND I GUESS
IT'S UNDER JUDICIAL REVIEW BUT
AT THAT POINT IN TIME I THINK
WAS.
TWO THOUSAND SEVEN THEY WENT OUT
TO A AND CREATED A SYSTEM THAT
HAS USED THE THE BEST PRACTICES
THEY CREATED USING TECHNOLOGY IS
SYSTEM WHICH NOW HAS HAD I THINK
A SIGNIFICANT -- A POSITIVE
IMPACT ON MITIGATING THOSE
POTENTIAL WILDFIRES.
SO WHEN YOU -- CONSIDER.
THAT THIS HAS BEEN DONE THAT
THERE HAS BEEN SUFFICIENT
MOTIVATION.
AND IT WAS A COST BASED
MOTIVATION IF YOU WILL FROM THE
FIRE I THINK IN TWO THOUSAND AND
THREE OR TWO THOUSAND AND SEVEN
IN THAT AREA.
WE WE HAVE SEEN AN EXAMPLE WHEN
A COMPANY YOU UNDERSTAND SO IT'S
BASICALLY THEY'RE ON THE HOOK.
TO GO OUT INTO DO THESE THINGS
THAT YOU GET A WE'RE TALKING
ABOUT BEING DONE THEN YOU HAVE A
COMPANY LIKE P. JEANNIE.
THAT HAS SEEN ITSELF MORE I
WOULD SAY AS A PRIVATE ENTITY
GIVING BONUSES TO ITSELF AND AND
DOING THINGS THAT HAVE REALLY
NOT BEEN NECESSARILY IN THE BEST
INTEREST OF THE PUBLIC.
HOW DO YOU?
IF YOU KNOW HOW DO YOU BALANCE
THOSE TWO HOW DO YOU JUSTIFY.
REDUCING A LIABILITY COMPONENT.
WHERE YOU SEE ONE ONE COMPANY
TOOK IT PRETTY SERIOUSLY?
AND WITH THE STATE OF THE ART
PROGRAM AND ANOTHER THE KEEPS
INSISTING UPON GIVING BONUSES TO
ITSELF AND TO ITS PEOPLE AND
THEN RUNNING INTO THE BANKRUPTCY
COURT WE SAW THIS TWENTY YEARS
AGO -- WHEN THEY DON'T LIKE?
THE LIABILITIES THAT THEY'VE.
CREATED FOR THEMSELVES SO.
HOW HOW DO WE EXPLAIN THIS TO
THE PUBLIC HOW DO WE AND AND
MOST IMPORTANTLY HOW DO WE
PROTECT AGAINST THESE KINDS OF
FIRES -- GIVEN CHOICES THAT ARE
BEING MADE BY ONE COMPANY OVER
ANOTHER. ONE ONE OF OUR
RECOMMENDATIONS.
RELATES TO WILDFIRE FIND AND
WHAT WE ARE VERY EXPLICIT ABOUT
IS HOW MUCH A UTILITY SHOULD
CONTRIBUTE TO THAT FUN SHOULD BE
TIED TO THEIR ACTUARIAL RISK.
SO AND THAT COULD BE A FUNCTION
OF BOTH THEIR WILDFIRE GEOGRAPHY
RISK AS WELL AS THEIR PAST
EXPERIENCE OF WILDFIRES SO IN
THAT SITUATION YOU EXPECTED
UTILITY LIKE P. JEANNIE. TO GROW
TO BEAR A GREATER SHARE OF THE
COST -- SANDY -- GAS AND
ELECTRIC HAS DEMONSTRATED NOW
WORLD CLASS TECHNOLOGY WITH WILD
FIRE DETECTION AND PREVENTION.
I WILL SAY THAT THEY MADE THOSE
INVESTMENTS YEARS BEFORE THE P.
YOU SEE DECIDED ON WHETHER THEY
COULD RECOVER THOSE COSTS THE P.
YOU SEATED INSIDE ON THAT.
TWENTY SEVENTEEN AND WHAT WE
HEARD FROM AT THE G.
REPRESENTATIVES IN OUR FORUM WAS.
THEY JUST SAID YOU NEVER AGAIN
WE DON'T WANT TO FIRE THAT BAD
IN OUR TERRITORY EVER AGAIN SO
WE'RE GOING TO DO WHAT IT TAKES --
THE WHAT WE HEARD WAS NOT THAT
IT WAS A DIRECT RESPONSE TO
STRICT LIABILITY ALTHOUGH OF
COURSE THAT CAN BE A FACTOR AND
SO. ONE OF THE THINGS I THINK WE
NEED TO BE SENSITIVE TO TO A SAN
DIEGO HAS DONE IS THEY'VE BEEN
ABLE TO USE CAMERAS AND
TECHNOLOGIES TO FIGURE OUT WHEN
THE SHUT OFF THE POWER.
BUT NOT NECESSARILY HOW TO
QUICKLY STOP A FIRE SO THERE ARE
THESE OTHER CIRCUMSTANCES.
WHICH CONTRIBUTE TO A FIRE
DAMAGE BUT I DO THINK THOSE ARE
ALL TECHNOLOGIES AND INVESTMENTS
THAT ARE UTILITIES NEED TO BE
DOING.
BUT I KNOW THAT IT'S NOT
SOMETHING THAT THE PUBLIC
UTILITIES COMMISSION ORDERED TO
THE OTHER UTILITIES TO DO OR THE
LEGISLATURE DID AS WELL AND SO I
THINK WE ARE NOW IN A PLACE.
WHERE WE REALLY LOOK AT THIS
CLOSELY AND SAID OKAY HERE THE
TYPES OF THINGS WE WANT TO SEE?
BUT THEY DO CONTRIBUTE TO COST
SAN DIEGO HAS THE HIGHEST
ELECTRIC RATES OF ALL THE
INVESTOR OWNED UTILITIES AND SO
ONE OF THE THINGS THAT WE WERE
STRUCK BY IN THE TESTIMONY WE
GOT.
WAS HOW ELECTRIC RATES ARE GOING
UP IN PARTICULAR HOW ELECTRIC
CUSTOMERS ARE PAYING FOR WHILE
FIRE MITIGATION IN ADDITION TO
DAMAGE.
AS WE DO THINK IT'S IMPORTANT TO
BE SENSITIVE TO THAT IMPACT
WHICH IS WHY WE RECOMMEND MORE
BROADLY SOCIALIZING THE COST.
THANK CENTER CENTER HERTZBERG.
THE MISMATCH CHAIRMAN THANK YOU
VERY MUCH FOR SETTING.
THIS HEARING TODAY ON YOUR
BIRTHDAY YOUR GREAT COMMITMENT
TO PUBLIC SERVICES DEMONSTRATED
HERE.
BIRTHDAY AND I ALSO WANT TO SAY
THAT DESPITE THE REFERENCES
THERE WILL BE NO EASEMENTS AT
THE ASSEMBLY.
I DON'T THINK THAT'S HAPPENING.
THERE JACKSON TALKED ABOUT BOND
HOW TO EXPLAIN THIS TO THE
PUBLIC.
YOU TALKED ABOUT ON A SERIES OF
RECOMMENDATIONS THAT WE CAN PUT --
PUT US ON THE RIGHT PATH -- I
THE PEOPLE OF CALIFORNIA ARE
WATCHING AND I WOULD SAY THAT.
IN IN THE OTHER POINT YOU MADE
THAT PEOPLE WANT TO INVEST IN
OUR UTILITIES.
I LOOK AT YOUR FIRST
RECOMMENDATION THE CORE WITHOUT
JUDGMENT AND SAY IT'S
CONSTITUTIONAL QUESTION.
SO HERE WE ARE WERE DELIVERED BY
THE RATING AGENCIES A DOCUMENT
THAT SAYS.
THAT UNLESS LEGISLATION PASSES
THAT REDUCES THE CREDIT RISK TO
CALIFORNIA LOOK TO TELL THESE
ARE CURRENT EXPECTATIONS YOU TO
DOWNGRADE UTILITIES AT AROUND
JULY TWELFTH.
WE'RE GOING TO FACE A DOWNGRADE
WE FURTHER HAVE ONE OF OUR
INVESTOR OWNED UTILITIES IN
BANKRUPTCY ANYBODY WHO'S EVER
BEEN A LAWYER DEALING WITH
BANKRUPTCY COURTS MISSILE CASKEY
KNOW.
THAT IT TAKES A LONG TIME TO GET
ANY RESOLUTION.
SO IF WE'RE GOING TO TAKE YOUR
COURSE OF ACTION WE'RE GONNA DAN
PASSED BY TWO THIRDS VOTES OF
BOTH HOUSES OF THE LEGISLATURE
SOMETHING TO PUT ON THE BALLOT
FOR NOTE THE ASTEST WAY
POSSIBLE MARCH OF TWO THOUSAND
AND TWENTY RIGHT.
N. WERE FACED AT THE SAME TIME
WITH THIS ISSUE OF THE INVESTOR
OWNED UTILITY IN IN IN IN IN THE
NORTH HAVING ITS CHALLENGES THE
RATING AGENCIES SAYING WHAT
THEY'RE SAYING.
HOW IS THAT FROM MY PERSPECTIVE
AT LEAST GOT INFORMED BY THE THE
ADVICE YOU GAVE OF PUTTING US ON
THE RIGHT PATH BOTH INSPIRING
INVESTMENT IN THE UTILITIES?
AND MAKING SURE THAT WE DON'T
HAVE THIS PROBLEM HOW DO WE
REACH THAT BALANCE I'M TRYING TO
LISTEN TO THE RECOMMENDATIONS IN
EARNEST LISTENING TO WHAT THE
GOVERNOR DID IN EARNEST ABOUT
BUT WE CERTAINLY KNOW WE'RE IN A
TOUGH SITUATION.
BUT THE QUESTION IS DO THESE
RECOMMENDATIONS REALLY PUT US ON
A PATH TO TO TO CHEAT THE
DELIVERABLES THAT YOU TALK ABOUT
PARTICULARLY.
IN THE EVENT WE HAVE ANOTHER
WILDFIRE.
IN A VASE MERE -- IN IN THE NEAR
TERM.
SO I WOULD.
READ ALL THESE RECOMMENDATIONS.
AS A COMPLETE SET.
I THINK ONE NEEDS TO BE CAREFUL
ABOUT.
PARSING OUT ANYONE ALONE BECAUSE
I DON'T THINK THERE'S ONE
RECOMMENDATION ALONE THAT GETS
YOU.
A SOLUTION AND SO.
ALWAYS MENTION THE FIRST ONE
FIRST BECAUSE THAT'S HOW WE
FIRST DEALT WITH IT MAY MEASURE
MENTION IT LAST -- BUT YOU KNOW
JUST BEGIN TAKING A STEP BACK
ABOUT.
AT A HIGH LEVEL YOU KNOW HOW I
THINK THROUGH THESE
RECOMMENDATIONS.
YEAH WE WERE ASKED TO LOOK AT
HOW DO WE ASK WHO ACTUALLY
ALLOCATE COST.
AND THE INTERPRETATION OF THE
STRICT LIABILITY -- THE STRICT
LIABILITY INTERPRETATION OF THE
INVERSE CONDEMNATION DOCTRINE
MEANS THAT THESE COST FALL TO
UTILITY SHAREHOLDERS AND REPAIRS.
AND OTHER STATES THEY FALL TO A
BROADER SET OF INDIVIDUALS
[inaudible]
SO.
THAT IS ONE WAY TO THINK ABOUT
SOCIALIZING COSTS MORE BROADLY
IS THE CHANGE THAT
INTERPRETATION.
IF THAT INTERPRETATION IS NOT
CHANGED THEN WE ARE IN A
SITUATION WHERE THESE COSTS FALL
TO SHAREHOLDERS AND RATE PAYERS
AND INVESTORS ARE SAYING WE
THINK IT'S A VERY RISKY
INVESTMENT FOR US TO INVEST IN
UTILITIES WHERE THERE'S AN
UNCAPPED THE LIABILITY FOR
SHAREHOLDERS.
WE'RE GOING TO ASK THAT ALL
THOSE COSTS AS MUCH AS POSSIBLE
FALL TWO ELECTRIC CUSTOMERS.
LEAD TO IS THAT FAIR GIVEN THAT
THESE ELECTRIC CUSTOMERS.
ARE JUST A DIFFERENT NAME FOR
CALIFORNIANS BUT IT'S ALL ABOUT
KIND OF HOW MUCH ELECTRICITY USE.
WE GOT LOTS OF EVIDENCE THAT
ELECTRIC CUSTOMER KOSTER
INCREASING AND WE'RE ASKING
ELECTRIC CUSTOMERS TO INVEST IN
THE MITIGATION.
AND PAY FOR THE DAMAGE.
AND SO THAT LED TO THE
RECOMMENDATION OF A FUND -- WITH
ONE MORE THING.
WHEN WE LOOK AT COST RECOVERY WE
HAD TO ADDRESS THIS QUESTION
ABOUT HOW DO YOU MAKE IT?
MORE REASONABLE TO INVEST IN
CALIFORNIA TILL THESE BECAUSE WE
LOOK AT WHY PEOPLE INVESTING
UTILITIES THERE'S A CAP UPSIDE
TO INVESTING IN UTILITY YOU KNOW
THAT WE SET THE RATE OF RETURN.
THEY'RE CONSIDERED HISTORICALLY
PRETTY SAFE INVESTMENTS AND ALL
THE THINGS THAT ARE HAPPENING OR
MAKING THEM MORE RISKY
INVESTMENTS AND THAT'S GOING TO
COST MORE ULTIMATELY. FOR
RATEPAYERS IN TERMS OF WHAT THE
UTILITIES HAVE TO BORROW.
SO THEN WE GET TO THE QUESTION
OF IF YOU CAN'T HAVE ALL THE LET
YOUR CUSTOMERS PAY FOR THESE
LIABILITIES THAT ARE TEN ELEVEN
TIMES WITH THE INSURANCE CAN
COVER.
THEN HOW DO WE MORE BROADLY
SOCIALIZING WHICH IS WHY HE
RECOMMENDED A FUN WHICH TAKES US
BACK TO SOCIALIZING ACROSS
PROPERTY OWNERS.
THE EASIEST MIGHT BE TO
SOCIALIZE ACOSTA TAXPAYERS WHICH
ALMOST GET YOU BACK FULL CIRCLE
TO WHAT A CHANGE TO THE INVERSE
CONDEMNATION DOCTRINE WOULD DO
AND SO THAT'S HOW THESE THINGS
ALL IN A RELAY IT REALLY GETS TO
WE'VE GOT LIABILITIES.
BEYOND WHAT WE COULD IMAGINE
IT'S OUR BIGGEST RECOMMENDATION
WHICH I JUST TO START WITH IS
REDUCE THE AMOUNT OF WILD FIRE
RISK WHAT WE KNOW IS THAT
THERE'S MORE FINANCIAL
MECHANISMS AVAILABLE TO US
THEY'LL BE MORE INSURANCE
AVAILABLE MORE THINGS LIKE
CATASTROPHIC BONDS THE SMALLER
THE RISK.
AND WE ARE TAKING THE STEPS NINE
A ONE IS TAKING US IN THAT
DIRECTION BUT WE KNOW THAT WILL
TAKE SOME TIME AND SO I THINK
THE CHALLENGE FOR OUR COMMISSION
WAS.
WE WE REALLY NEED PROTECTION IS
IN THESE NEXT FEW YEARS.
AND THE THINGS THAT GIVE US
THEIR GIVE US THAT BUFFER GIVE
US THAT BACKSTOP ARE HARD TO DO.
SO WE HAVE TRIED TO MAKE
RECOMMENDATIONS THAT ACKNOWLEDGE
THAT THIS COULD BE A TEMPORARY
ISSUE MAYBE THIS YOU NEED TO
KNOW A FINE THAT'S REALLY GONNA
BE LIQUID FOR TEN YEARS AND OVER
TIME IT'LL TELL OUT.
MAYBE WANT TO THINK ABOUT COST
RECOVERY FOR FORM THAT WAY
REVISITING YOU'RE LOOKING AT IT
AGAIN IN SEVERAL YEARS BUT FOR
NOW.
I THINK WE'RE TRYING TO
RECOMMEND HOW DO YOU.
YEAH HOW DO YOU STOP OF THE
INCREASING COST OF CERTAINTY AND
UNTIL THERE SOME REAL CLEAR
DIRECTION ABOUT WHERE THIS ENDS
I THINK WE'RE GOING TO CONTINUE
TO SEE.
POTENTIALLY YOU KNOW MORE
DOWNGRADES MORE BANKRUPTCIES AND
LESS RESOLUTION FOR WELFARE
VICTIMS I GUESS FOLLOWS GERMANS
ONE MOMENT THAT'S EXACTLY I'M
TRYING TO GET TO GIVEN THE FACT
THAT WE JUST GOT THIS FROM.
WE GOT MOODY'S REPORT NOW WE
JUST GOT THE REPORT FROM FROM --
STANDARD AND POOR'S THAT THE
IMPLEMENTATION IF YOU WANTED TO
TALK ABOUT.
THE INVERSE AND IT REQUIRES A
BALLOT INITIATIVE FOR PEOPLE TO
BE COMFORTABLE THERE'S NO WAY
THE THE YOU KNOW WE'VE GOT THE
SITUATION WE HAVE INVESTOR OWNED
UTILITIES AS I SEE IT.
AND THEY NEED TO BE STABILIZE IT
CROSSES FIVE HUNDRED MILLION
DOLLARS A WEEK WHEN CENTER
JACKSON AYE WERE HERE SOME TIME
AGO.
AT THE STATE ACTUALLY PAYING
THOSE COSTS CORRECT AND SO THE
QUESTION IS.
WHAT'S UP WITH THE SUCH AS THE
BROUGHT IDEAS FOR A PIECE OF
PAPER WE'RE NOW IN A SITUATION
WHERE WE'RE TOLD BY STANDARD AND
POOR'S YOU GOT TO JULY TWELFTH
LADIES AND GENTLEMAN.
AND PART OF THAT IS GOING TO BE
THIS ODD SITUATION YOU CORRECTLY
IDENTIFY IS TO INSPIRE-CONFIDENCE THE EARTHQUAKE
AUTHORITY.
WE HAD THIS HORRIBLE EARTHQUAKE
AUTHORITY THE COMMUNITIES THAT I
REPRESENT AND THE GOOD NEWS IS
WE HAVEN'T HAD ANOTHER BIG
EARTHQUAKE SO WE HAVING A
PROBLEM WE DON'T HAVE ANOTHER
BIG WILD FIRE.
BUT THIS BANKRUPTCY IN THIS IN
SECURITY IS CAUSED BY THE
CONCERN THAT WE MIGHT.
AND SO OUR JOB IS TO PROTECT
AGAINST IF WE MIKE TO GIVE
CONFIDENCE AS YOU SUGGESTED FOR
THE PEOPLE WHO WANT TO INVEST IN
THEIR UTILITIES IN CALIFORNIA SO
IT SEEMS TO ME.
IS A FOUNDATIONAL QUESTION AS WE
APPROACH THIS PROBLEM SOLVING WE
HAVE TO BE GUIDED AT ITS CORE
ADDITIONALLY BY HOW MUCH CAPITAL
IS GOING TO COST US WHAT'S IT
GOING TO COST RATE PAYERS AND
EVERYBODY ELSE.
IF PEOPLE DON'T HAVE CONFIDENCE
AND THE RATINGS ARE TURN ARE ARE
TURNED INTO JUNK WE HAVE TO MAKE
SURE WE HAVE TRIPLE A RATING
BONDS AND SO EVERY DECISION WE
MAKE.
HAVE TO BE IMPLEMENTED IN THE
PROCESS AND MAYBE AT THE END OF
THAT PROCESS YOU COULD LOOK AT
THE LIABILITY ISSUE BUT THAT'S
NOT WHAT WE LEAD OFF FROM.
AND THAT WE HAVE TO COME UP WITH
AT THE CORE OF WHAT WE'RE DOING.
INSPIRING CONFIDENCE IN THE
FINANCIAL MARKETS SO THAT PEOPLE
KNOW THAT THAT THEIR COST OF
BORROWING COST OF THE UTILITY
RATES ARE NOT GOING TO GO UP AND
THAT THERE'S MONEY AVAILABLE TO
PAY FOR VICTIMS.
AND SERVE THE PEOPLE OF
CALIFORNIA AND I JUST TALK ABOUT
THIS IN BROAD TERMS THIS
CRITICALLY IMPORTANT THAT WE ARE
THE PLACE WITH THE PRACTICAL
HAPPENS WITH THE RUBBR MEETS
THE ROAD AND WE HAVE TO FIGURE
THAT SOLUTION.
AND WHAT THE IMPLEMENTATION
LOOKS LIKE.
THE END I DON'T DISAGREE I THINK
THE LAST POINT I WOULD MAKE IS
THAT ALL OF THESE THINGS ARE
DIFFERENT TIME HORIZONS AND HAVE.
DIFFERENT LEGAL CHALLENGES AND
SO -- I THINK YOUR POINT IS WELL
TAKEN MAY THE I THINK THE
REPORS NOTE THAT THEY WOULD
LIKE TO SEE A CHANGE THE COST
RECOVERY STANDARD THAT'S
PROBABLY THE MOST DIRECTING THAT
YOU CAN DO -- TO INCREASE
INVESTOR CONFIDENCE.
WE WANT TO BE SENSITIVE TO THE
FACT THAT THAT ON ITS OWN COULD
JUST SHIFT COSTS ONLY TO
ELECTRIC CUSTOMERS WHICH WILL
NOT BE SUSTAINABLE -- BUT I
APPRECIATE THE CHALLENGE BEFORE
YOU.
THE SPEARMAN THANK YOU VERY VERY
MUCH -- FOR ALL THE TIMES I SAID
EARLIER -- THE AMOUNT OF TIME
AND AFTER THAT'S GONE INTO THIS
IS JUST INCREDIBLY PROCEED.
THANK YOU FOR YOUR UNLESS THAT
CONTAIN LESS KNOW HOW WE CAN BE
OF SERVICE [inaudible]
OKAY [inaudible]
COMMISSIONER LARA.
WANT TO THANK YOU FOR TAKING THE
TIME -- TO JOIN US TODAY.
THE CALIFORNIA DEPARTMENT OF
INSURANCE IS DONE SOME EXTENSIVE
WORK ON THE ISSUE OF WILDFIRES.
AND THEIR IMPACT ON RESIDENTIAL
INSURANCE.
THE DEPARTMENT PUBLISHED A
REPORT ABOUT EIGHTEEN MONTHS AGO
ON THE AVAILABILITY AND
AFFORDABILITY OF COVERAGE FOR
WHILE FAR LOSS.
IN RESIDENTIAL PROPERTY
INSURANCE IN THE WILDLAND URBAN
INTERFACE AND OTHER HIGH RISK
AREAS OF CALIFORNIA.
THEREFORE YOUR PERSPECTIVE ON
THE DISCUSSION AND
RECOMMENDATIONS ON THE
COMMISSION REPORT WILL BE VERY
HELPFUL TO OUR WORK I REALLY
APPRECIATE YOU COMING THANK YOU
THANK YOU MISTER MEMBERS -- IT'S
GREAT TO BE HERE AGAIN -- AS YOU
KNOW SINCE TAKING OFFICE HE BEEN
WORKING TOWARDS ASSISTING
VICTIMS OF THE TWENTY SEVENTEEN
AND TWENTY EIGHTEEN WILDFIRES
WITH INSURANCE CLAIMS.
BEING THE MAJOR FOCUS OF MY
DEPARTMENT DURING THE LAST
HANDFUL OF MONTHS -- WE HAVE
VISITED -- PARADISE AGORA HILLS
MALIBU CHICO SANTA ROSA AT THE
DEPARTMENT AND HAVE HAVE HELD
MULTIPLE WORKSHOPS TO HELP
HOMEOWNERS HOMEOWNERS NAVIGATE
THEIR POLICIES.
WE WILL ALSO ORGANIZE THE
WELFARE RESILIENCE SUMMIT.
WHERE WILL WE INVITED INSURANCE
COMMISSIONER IS ACTUALLY FROM
ACROSS THE COUNTRY TO COME TO
CALIFORNIA TO VIEW THE DAMAGE OF
THE CAMPFIRE AND ENGAGE IN
POLICY DISCUSSIONS WITH OUR
STATES?
WITH OTHER STATES ON INSURANCE
AND WHILE FAR RISK.
A IT SHOULD BE CLEAR TO EVERYONE
BY NOW THAT CALIFORNIA HAS THE
MOST TO GAIN.
OF ANY STATE -- FROM REDUCING
THE RISK OF EXTREME WILDFIRES
AND THE MOST TO LOSE IF RISKS
ARE CONTINUE TO CLIMB.
WE ALL NEED TO BE FOCUSED ON
REDUCING RISK THE OF
AVAILABILITY TO FIND AFFORDABLE
INSURANCE IMPROVE THE WE REDUCE
THE RISKS TO OUR COMMUNITIES
WILDFIRES HAVE BEEN A PART OF
CALIFORNIA FOR ENTIRE HISTORY
BUT CLIMATE CHANGE ON THE GROWTH.
OF OUR POPULATION CAN BE A
DANGEROUS COMBINATION.
LOCAL COMMUNITIES ARE ASKING
WHAT CAN THEY DO TO REDUCE
IMPACTS OF WILDFIRES WE NEED TO
PROVIDE THE INCENTIVES THAT
PROMOTE WHILE FIRE MITIGATION
ACTIONS.
INCLUDING STATEWIDE INITIATIVES
THAT EMBRACE OUR NATURAL FOR
STRUCTURE HARDEN EXISTING HOMES
AND IMPROVE COMMUNITY LEVEL
RESILIENCE.
OUR DEPARTMENT OF INSURANCE
STAFF OF CONSULTED ON THE NINE
ONE COMMISSION REPORT OUR
DEPARTMENT PRESENTED MULTIPLE --
PRESENTED AT MULTIPLE COMMISSION
MEETINGS AND PROVIDED NUMEROUS
RECOMMENDATIONS AIMED AT KEEPING
INSURANCE AFFORDABLE AND
AVAILABLE TO ALL CALIFORNIANS.
AS YOU ALSO NOYCE ALSO SERVE ON
THE GOVERNOR'S STRIKE TEAM.
I WANT TO HIGHLIGHT A FEW
RECOMMENDATIONS WITHIN THE NINE
A ONE COMMISSION REPORT THAT I
THINK PARTICULARLY STE OUR
STRONG POLICY PROPOSALS AS THE
SENATE ENGAGES IN DISCUSSIONS ON
WILDFIRE POLICY.
RELATED TO HOME HARDENING AND
NON RENEWAL PROTECTION.
UNDER INSURANCE AND IMPROVEMENTS
TO THE FAIR PLAN AND THE
CALIFORNIA ASSURANCE GUARANTEE
ASSOCIATION.
HOME HARDING THE RECOMMENDATIONS
ON THE HOME HARDING IN THE
INSURANCE CHAPTER ARE CONSISTENT
WITH THE RECOMMENDATIONS FROM
THE DEPARTMENT OF INSURANCE.
THE REPORT SUGGESTS CREATING A
STATEWIDE STANDARD.
OF FOR HARDING HOMES AND
REQUIRING INSURERS TO WRITE
POLICIES FOR HOMEOWNERS WHO MEET
THAT STANDARD.
HOME HARDING BENEFIT BENEFITS
CONSUMERS INSURERS AND THE STATE
BY REDUCING ANTICIPATED FUTURE
LOSSES.
THE KEY IS TO REQUIRE A CLEAR
EFFECTIVE AND ACHIEVABLE BAR FOR
HOMEOWNERS TO MEET.
UP WE HAVE A WELL WE HAVE WELL
RECOGNIZED A SUCCESSFUL MODEL
TODAY IN THE WELFARE PARTNERS
PROGRAM IN BOULDER COLORADO
WHERE RISK REDUCTION STANDARD
WITH THAT AND IF HOMEOWNER.
MEETS SET THE SURE WERE RIGHT
THE INSURANCE FOR THAT WHOLE
PROPERTY.
THAT GIVES HOMEOWNERS AND
COMMUNITIESA CLEAR INCENTIVE TO
MAKE EXPENDITURES TO DO THE WORK
TO REDUCE THE RISK.
UNDER INSURANCE AFTER EVERY
WHILE FOR THAT WE SEE VICTIMS
WHOSE -- INSURANCE LIMITS DO NOT
COME EVEN CLOSE TO COVERING THE
COST TO REBUILD.
THE PROBLEM THIS PROBLEM
DECREASES THE ABILITY FOR
COMMUNITIES TO RECOVER FROM
WILDFIRES AND HAS A RIPPING
AFFECT IN THE ENTIRE STATE.
IN AN ERA WHERE WE HAVE ACCESS
TO MORE AND MORE DATA ON
INSURANCE IS PERSISTENT.
THIS IS WHY GETTING A LIMB
GETTING THE LIMIT RIGHT ART FOR
YOUR COVERAGE A OF AN INSURANCE
POLICY IS INCREDIBLY IMPORTANT.
COVERAGE A IS A PORTION OF THE
INSURANCE POLICY THAT COVERS THE
COST OF REPAIRING REBUILDING AND
REPLACING THE PHYSICAL STRUCTURE
OF A PERSON'S HOME.
HERE'S WHAT HAPPENS HAVING TO
LOWER THE LIMIT IN YOUR COVERAGE
A AFFECTS MULTIPLE OTHER PARTS
OF YOUR HOMEOWNER'S POLICY
INCLUDING YOUR ADDITIONAL LIVING
EXPENSES.
OTHER STRUCTURES ON YOUR
PROPERTY YOUR CONTENTS LIMIT AND
YOUR BUILDING CODE UPGRADE
COVERAGE.
UNDER INSURANCE IS THEREFORE
CREATING SIGNIFICANT IMPACTS ON
HOMEOWNERS ABILITY TO MOVE
FORWARD AFTER A MAJOR
CATASTROPHE.
THE NINE NO ONE REPORT
RECOMMENDS A MANDATORY ANNUAL
CHECK IN ON COVERAGE LIMITS BY
INSURERS WITH THAT WHAT THEIR
CUSTOMERS BEFORE RENEWAL OR
BEFORE WRITING A NEW HOMEOWNER
POLICY WE SUPPORT THIS CONCEPT.
AS STEPS TOWARDS ADDRESSING THE
AND INSURANCE PROBLEMS IS
CRITICAL IT IS ALSO CRITICAL
THAT CONSUMERS BE INFORMED OF A
CURRENT.
REALISTIC ESTIMATES OF THE
ACTUAL COST TO REBUILD THEIR
HOMES SHOULD THERE FOR US OFFER
A TOTAL LOSS.
WE IN THE DEPARTMENT OF ALSO
BEEN WORKING ON APPROVING
pCONTRACTS THAT ARE EASIER TO
COMPREHEND WITH GLASS LEGAL
JARGON AND WE CONTINUE TO FIGURE
OUT HOW WE CAN MAKE THIS EASIER
FOR THE POLICY HOLDER.
MANY OF THAT IS -- GUARANTEED
AND REQUIRED BY STATUTE BUT
WE'RE TRYING TO FIGURE OUT HOW
TECHNOLOGY CAN HELP WITH A
LESSENING THE NUMBER OF PAGES IN
A CONTRACT MAKING IT EASIER TO
UNDERSTAND.
IN TERMS OF WHAT YOU'RE ACTUALLY
COVERED AND IF YOU WANT TO REFER
TO THE CODE SECTION THAT GOVERNS
THAT SPECIFIC PIECE OF THE
POLICY YOU CAN EITHERCLICK OR
WE CAN PROVIDE YOU WITH THAT.
ADDENDUM TO YOUR POLICY BUT WE
WANT TO BE ABLE TO MAKE SURE
THAT THE POLICY OLDER CLEARLY
UNDERSTANDS WHAT THEY'RE
ENTERING INTO WHAT THEIR COVER.
FOR THAT THEN THEY CAN MAKE THE
APPROPRIATE -- WE CAN MAKE THE
APPROPRIATE DECISION FOR THEM
AND FOR THEIR FAMILY -- FOR THE
FAIR PLAN AND BEFORE THE
CALIFORNIA INSURANCE GUARANTEES
SO STATION THE FAIR PLAN.
IS AS YOU KNOW THE INSURER OF
LAST RESORT IN THE STATE AND THE
CALIFORNIA SHOWS GUARANTEE
ASSOCIATION ISSUES UP THE CLAIMS
ARE PAID EVEN IF THE INSURED
GOALS AND SOLVE IT.
THE FAIR PLAN LIMIT HAS NOT BEEN
INCREASED SINCE THE NINETEEN
NINETIES AT HOME PRICES IN
CALIFORNIA OF CERTAINLY INCREASE
SINCE THAT TIME. TO FURTHER
COMPLICATE MATTERS THE COVERAGE
IS VERY LIMITED -- DWELLING FIRE
POLICY WITH LIMITED PERILS AND
NO LIABILITY COVERAGE NOT
CONSISTENT WITH MOST HOMEOWNERS
NEEDS THE CALIFORNIA ASSURANCE
GUARANTEE ASSOCIATION LIMIT HAS
NOT BEEN INCREASED SINCE ITS
INCEPTION IN.
NINETEEN SIXTY NINE AND SHOULD
BE INCREASED FOR OUR CURRENT
LEVELS.
OF FIVE HUNDRED THOUSAND DOLLARS.
SO IN SUMMARY MORE GENERALLY WE
WE SUPPORT THE PORTIONS OF THE
REPORT THE FOCUS ON REDUCING
FUTURE RISK.
THIS INCLUDES INVESTMENTS IN
NATURAL FOR STRUCTURE HOME
HARDENING AND ESTABLISHING
STRONGER RULES ON LAND USE
DECISIONS WE NEED REAL
PARTNERSHIP BETWEEN STATE LOCAL
GOVERNMENTS WHEN IT COMES TO
REDUCING THAT RISK.
AND HAVE MADE SEVERAL AND AND
WE'VE HEARD FROM SEVERAL
COUNTIES IN THE WORLD AND URBAN
INTERFACE WANT TO WORK TOGETHER
WITH THE DEPARTMENT TO FIND
CREATIVE SOLUTIONS. FOR THE
RESIDENTS CAN FIND AND RETAIN
INSURANCE THAT THEY NEED TO
STATE TO DO THAT WE MUST HAVE A
SHARED EFFORT AND HARDING IS
THIS EXISTING HOMES.
AND MAKE DATA DRIVEN DECISIONS
ABOUT NEW DEVELOPMENT -- IN
ASKING LOCAL GOVERNMENTS
DEVELOPERS AND HOMEOWNERS IN THE
WORLD AND URBAN INTERFACE TO DO
THEIR PART WE ALSO NEED TO ASK
INSURERS TO DO THEIR PART AS
WELL.
MANY POLICY MET AND MANY POLICY
CHOICES -- WILL BE -- WILL NEED.
TO YOU KNOW WHAT WE NEED TO MAKE
TOGETHER THEY WILL ULTIMATELY
ALSO BE TOUGH DECISIONS TO MAKE
THAT COULD HAVE AN IMPACT ON THE
PRICE OF INSURANCE -- WELL WE
ALL WANT TO DO AS MUCH AS WE CAN
TO MAKE INSURANCE AVAILABLE
THROUGHOUT THE STATE WE
RECOGNIZE THATTHE AREAS OF HIGH
RISK WILL HAVE HIGHER PREMIUMS.
EVEN IF THE HOMES ARE HARD AND
IN THE LAST TWO YEARS ALONE
INSURANCE CARRIERS HAVE
SUBMITTED OVER A HUNDRED
APPLICATIONS TO OUR DEPARTMENT
REQUESTING RATE INCREASES FOR
HOME OWNERS INSURANCE.
THIS IS MORE THAN DOUBLE THE
FILINGS FROM THE PREVIOUS TWO
YEARS AND PRESCRIBE AND AND AS
PRESCRIBER Là IN ENSURING THAT
THE RATES ARE ACTUALLY SOUND WE
HAVE MADE UP -- WE HAVE APPROVED
THOSE FILINGS WHERE TEACHERS
HAVE SUPPORTED THE PROJECTIONS --
FOR FUTURE LOST WHAT WE MAKE
THOSE TOUGH DECISIONS I AM
HOPEFUL THAT WE WILL BE ABLE TO
STRIKE A BALANCE.
THAT -- WILL ALSO DISTANCE TO BE
SAFE HAVE INSURANCE COVERAGE AND
REMAIN IN THE COMMUNITIES THAT
HAVE BEEN THEIR HOMES FOR
DECADES.
THE DEPARTMENT AGREES WITH THE
SEVERAL THE RECOMMENDATIONS AND
THE INSURANCE CHAPTER.
AND I KEEP BY COMMON SHORT TO
NOT REINSTATE WHAT IS ALREADY IN
THE REPORT.
BUT HAPPY TO ANSWER ANY
QUESTIONS ANY CLOSE BY
REITERATING THAT UPFRONT
INVESTMENTS IN PREVENTION AND
MITIGATION RESILIENCE WILL
REDUCE FUTURE REST.
AND BENEFIT TO HOMEOWNERS
COMMUNITIES INDUSTRY LOCAL
GOVERNMENTS AND OUR STATE WE
JUST CANNOT RESPOND AFTER AN
AFTERMATH WE HAVE TO LEARN HOW
TO BE MUCH MORE PROACTIVE.
THANK YOU.
ASK FOR QUESTIONS I DID WANT TO
THANK ALL THE MEMBERS -- FOR
BEING HERE TODAY WE DID HAVE
SENATOR RUBIO WHO WAS AT A
FUNERAL THIS AFTERNOON THAT.
COULD NOT BE WITH US WATER MAKE
SURE -- TO WE SHOULD ALL RIGHT
WITH THAT WAS SO NOTED -- SO
WITH THAT SAID -- MCGUIRE.
THANK YOU SO MUCH SHERMAN DINO
WANNA TAKE A MOMENT TO THANK YOU
THE CHAIR -- FOR HIS WORK NOT
JUST OVER THE PAST MANY BANDS
BUT FOR THE LAST COUPLE OF YEARS
ON THIS.
IMPORTANT ISSUE IN GRATEFUL FOR
YOUR LEADERSHIP ON THIS AS WELL
AND I ALSO WANT TO ACKNOWLEDGE
OUR INSURANCE COMMISSIONER WHO
IS HIT THE GROUND RUNNING --
COMING INTO THIS NEW ROLE IN
BEING ACTIVE ENGAGE IN THOSE
COMMUNITIES THAT HAVE BEEN
RAVAGED BY THESE WHILE AND FIRES
AND JUST WANT TO ACKNOWLEDGE
YOUR HARD WORK SIR NO THERE'S A
LOT OF WORK AHEAD -- AND THEN
ALSO THIS IS TALK ABOUT WHAT
WE'RE SEEING ON THE GROUND --
pARE REELING -- IN THEIR REAL IN
BECAUSE THEY CAN ACCESS OUR
TRADITIONAL INSURANCE.
AT SAID THEY HAVE.
BEEN HIT BY A COMMITTEES BEEN
HIT BY WHILE IN FIRES.
AND EVEN IF THEY LIVE MILES AWAY
OR LIVING IN THE CORPORATE
COMMUNITY IN A COUNTY THERE'S
BEEN HIT BY WILDFIRES THEY CAN
ACCESS TRADITIONAL INSURANCE.
AND EVENTUALLY THIS IS GOING TO
IMPACT ECONOMY OF THIS GREAT
STATE.
END UP WILD -- I AM SO GRATEFUL.
FOR THE COMMISSIONER TALKING
ABOUT THE CALIFORNIA FAIR PLAN I
THINK IT LEASE IN THE REPORT
HAVE SOME CONCERNS -- AND I KNOW
THAT -- THE COMMISSION IS
CONTINUE TO WORK ON THIS ISSUE.
A FEW ITEMS IS IF YOU LIVE IN
MENDOCINO COUNTY IT'S AN ITEM
THAT I MENTIONED LAST TIME.
MENDOCINO COUNTY AND NOT EVEN
NEAR A WHILE IN FIRE.
TRADITIONALLY WERE PAYING NINE
THOUSAND DOLLARS FOR YOUR HOME
OR POLICY. FIFTEEN SEVENTEEN HER
SQUARE FOOT HOME YOU KNOW PAIN.
TWENTY ONE THOUSAND A YEAR.
BUT YOU'RE SIMPLY PRICING FOLKS
OUT.
THERE ARE ENTIRE COMMUNITIES IN
COUNTIES THAT.
HAVE BEEN IMPACTED BY WHILE THE
FIRE THEY CAN'T GO TO A
TRADITIONAL INSURANCE CARRIER.
SO THERE I HAVEN'T BEEN A TURN
TO THE FAIR PLAN AND THEN GET IN
OUT OF STATE WRITER TO TRY TO BE
ABLE TO COVER.
THEIR HOME WHICH IS OUR NUMBER
ONE ASSET.
IN SOME OF THE CONCERNS THAT I
HAVE IN THE RECOMMENDATIONS THAT
ARE COMING FORWARD.
WOULD BE THAT -- ONLY ALONE
FUNDING SUBSIDY TO HOMEOWNERS
WHO CURRENTLY LIVE IN HIGH RISK
AREAS -- IN CURRENTLY INSURED BY
THE FAIR PLAYING -- CONCERN WITH
THAT IS.
WHAT DO YOU DO WHEN YOU SELL
YOUR HOME -- AND WE NEED TO
CONTINUE THAT A FAIR PLAYING ON
AND COMPLETELY AGREE WITH
INSURANCE COMMISSIONER WE NEED
TO MAKE IT MORE ROBUST AND LOOK
AT HOW WE'RE GOING TO BE ABLE.
TO PUT ADDITIONAL INVESTMENT IN
THAT -- ANY OTHER CONCERNS --
THAT I KNOW THAT THE CHAIR IS
ALSO WORKING ON IS -- IN THE
REPORT SHOULD BE AN UNAVAILABLE
TO HOMEOWNERS WHO MOVING TO HIGH
RISK AREAS IN THE FUTURE WELL.
LET'S BE HONEST IF I HAVE A HOME
AND I PUT MY LIFE SAVINGS INTO
THAT HOME.
AND I NEED TO BE ABLE TO TAKE
CARE MY AILING WIFE FOR HUSBAND --
I'M GONNA HAVE TO SELL THAT HOME
WHY CAN'T SELL MY HOME IF I
CAN'T GET THAT NEXT HOMEOWNERS
CAN BE TO GET INSURANCE.
I'M OR A BAREBONE INSURANCE AT
THE FAIR PLAN AS WELL SO.
YOU KNOW THAT THAT'S SOMETHING
THEY THE COMMISSION IS CURRENTLY
WORKING ON AND I'M GRATEFUL FOR
THAT.
VERY GRATEFUL FOR THE HOME FIRE
RISK EDUCTION IN COMMUTER
RESTRICTION HOME HARDENING.
I ESPECIALLY THE TUBS FIRE THAT
AS SENATOR DODD NICE OFFER STAND
CENTER JACKSON IS SEEN TIME AND
TIME AGAIN IN HER DISTRICT IN
EVEN WITH THOSE ENHANCE SOME
MORNING CENTERS THAT WE HAVE NOW.
I THINK WE NEED TO GO ABOVE AND
BEYOND.
IN IF FOLKS TO GO ABOVE AND
BEYOND.
LOVE THAT WORD TAKE A LOOK AT
THE OLORADO MODEL BECAUSE AT
THAT WILL WORK IN EACH SIDE IS
GOING TO HAVE TO BE ABLE TO GIVE.
HOMEOWNERS ARE GONNA HAVE TO BE
A BECOME MORE ROBUST IN HOME
HARDENING INSURANCE CARRIERS AND
TO BECOME OPEN TO COVERING --
AND THE THE ISSUE IN REGARD TO
NON RENEWALS. FORTY FIVE DAYS IS
COMPLETE B. S..
I AND IT HURTS A FAMILY IN
CRISIS -- I UNDERSTAND THAT
THERE ARE CONDITIONS IT WITHIN
THIS BUT WE NEED AT LEAST GIVE A
YEAR TO BE A PROVIDE THE OPTION.
TO BE ABLE TO FIGURE OUT HOW TO
BE -- TO COVER THEMSELVES AND
THEIR FAMILIES -- AND I
APPRECIATE.
THE INSURANCE COMMISSIONER UP ON
THAT IS WELL I HAVE SEVERAL
OTHER ITEMS BUT I'LL LEAVE IT
THERE BUT AGAIN.
THE CHAIR TO THE TRANSMISSION
THANK YOU AND I THINK THAT WE
HAVE A LONG WAY TO GO -- AND
INSURING THAT FOLKS ARE GOING TO
BE A TO STAY IN THE COMMUNITIES
THAT THEY LOVE -- IN THE STATE
THEY LIVE IN [inaudible]
CENTER STERN [inaudible]
FAMOUS CHAIR -- THANK YOU MISTER
COMMISSIONER FOR SHOWING UP.
BRING YOUR STAFF AND DOING THE
HARD WORK I MEAN.
C. ENGAGEMENT IS COMPLEX AND
CRITICAL BUT THE THE COMMUNITY
APPRECIATES YOUR PRESENCE AND
YOUR DEPARTMENT BEING OUT THERE
WORKING THROUGH THE COMPLEXITY
IN SOME OF THESE GAPS WERE
SEEING IN THESE COMPLEX HERE AND
HAVING A FAIR PLAN AND NOT
KNOWING.
YOU KNOW YOU YOU'RE YOU'RE
DISPARITY IN COVERAGE IN.
ALL THE NITTY GRITTY OF DEALING
WITH THE EXISTING CHALLENGES I
WANTED TO GIVE YOU AN
OPPORTUNITY COMMENT -- A LITTLE
FURTHER ON THIS HOME HARDENING
QUESTION ANOTHER SOME -- A FEW
ALTERNATIVE RECOMMENDATIONS THAT
THE COMMISSION PUT FORWARD --
LOOKING AT SORT OF A TIERED
MITIGATION CREDIT APPROACH.
VERSES A STANDARDS BASED
APPROACH AND THEN THERE'S ALSO
TALK ABOUT.
A FUND -- WHICH WE CURRENTLY
DON'T HAVE ANY SORT OF HOME
HARDENING FUN THERE'S NO SORT OF
FORMAL ARCHITECTURE THAT I CAN
TELL.
IN THE STATE BUDGET OR SO CAN
YOU ABSOLUTELY AWAY IN ON THAT
SO YOU KNOW THE THE PREMISE ON
ALL THE SOLUTIONS ARE BEING
DISCUSSED AT THE LEGISLATIVE
LEVEL.
ALL HAVE TO HAVE SOME SORT OF
COMPONENT OF MEDICATION.
BECAUSE EVEN IF YOU HAVE A
CONVERSATION ABOUT YOU KNOW WHAT
ARE WE GONNA DO WITH INVERSE
WHAT ARE WE GONNA DO WITH THE
FIND AT THE END OF THE DAY
SOMEBODY'S GOING TO PAY. FOR
THAT RIGHT AND YOU'RE GONNA PAY
THROUGH YOUR YOUR INSURANCE
POLICY YOU'RE GONNA PAY THROUGH
YOUR ENERGY BILL -- AND THE FACT
IS THAT WE HAVE TO FIGURE OUT
HOW DO WE GET AHEAD OF THIS
PROBLEM.
AND BY REALLY FOCUSING ON
MITIGATION ANY FUND THAT WE
CREATE SHOULD HAVE A PERCENTAGE
OF THAT GOING TOWARDS MITIGATION
BECAUSE THE END OF THE DAY IF WE
REDUCE THE RISK.
WE GET THE INSURANCE COMPANIES
TO ONE STAY AND HOPEFULLY
CONTINUE TO WRITE IN THE
SENSITIVE AREAS RIGHT.
SO THE DEPARTMENT'S VISION IS
WHATEVER WE DO IN THE
LEGISLATIVE ARENA OR TO THE
GOVERNOR IT HAS TO HAVE A
MEETING A CLEAR MITIGATION
COMPONENT.
WITH CLEAR POLICIES NOT ONLY AT
THE INDIVIDUAL HOME LEVEL BUT AT
THE COMMUNITY LEVEL RIGHT
BECAUSE IF AND WE SEE THIS TIME
AND TIME AGAIN FROM.
YOU KNOW MALIBU TO SANTA ROSA
THERE ARE FOLKS THAT DID
ABSOLUTELY EVERYTHING TO
MITIGATE BUT THEIR NEIGHBORS DID.
RIGHT AND SO THERE'S A MAYBE
THAT WOULD HAVE IMPACTED IF WE
ALL WOULD HAVE COME TOGETHER AS
A COMMUNITY TO HAVE DONE THAT
BUT ALSO WHAT ARE THE
RESPONSIBILITIES OF THE LOCAL
GOVERNMENT. TO INITIATE
MITIGATION METHODS RIGHT AND AND
STRATEGIES WITHIN THEIR
COMMUNITY AS NOW YOU KNOW.
DO WE HAVE THE THE THE THE PROP
THE PROPERTY GRAYSON INGRESS --
SO THAT WE CAN BE ABLE TO ACCESS
FOLKS YOU KNOW FOLKS THAT
PERISHED IN IN IN PARADISE
LITERALLY THERE WAS ONE ROAD IN.
AND WE COULD YOU I WAS TOO LATE
FOR FOLKS TO TRY TO GET OUT ONCE
THE SMOKING MAN.
SO OUR APPROACH THE DEPARTMENT
IS.
WHATEVER SOLUTION WE COME TO IT
HAS TO HAVE A MITIGATION
APPROACH SO THAT AT AND IT'S
GOING TO BE CLEAR AND
UNDERSTANDABLE SO THAT WE CAN
THEN AT THE DEPARTMENT MEASURE.
IF THEY'RE BEING APPROPRIATE
WHEN IT COMES TO THAT SO -- THAT
IS ESSENTIALLY THE MESSAGE WE I
I COME TO BRING IS.
WHATEVER WE DECIDE LET'S MAKE
SURE THAT IT HAS TO HAVE A
ROBUST.
MITIGATION COMPONENT BECAUSE
THAT'S WHAT ALLOWS US TO GET
AHEAD OF THE GAME IT ALLOWS US
TO THEN MAKE THE THE PAGE FOR
THE INSURANCE INDUSTRY THE STATE
AND RIGHT IN THESE COMMUNITIES --
AND THEN WE CAN DEMONSTRATE JUST
AS WE'RE DEMONSTRATING AND AND
IN THIS COLORADO EXAMPLE IS IF
IT'S DONE IN A WAY THAT IT'S
COMMUNAL IN THE ENTIRE COMMUNITY.
THEN WE CAN GO BACK TO JUST COME
TO SAY WELL YOU HAVE TO WRITE
THESE IN THESE AREAS RIGHT.
SO WHATEVER WE DO I'M SAYING IS
WE NEED TO HAVE THAT MEDICATION.
I COULDN'T AGREE MORE AND I FEEL
IT IS THE ONE AREA WHERE WE MAY
BE A LITTLE BIT BEHIND I KNOW
THERE'S BEEN A LOT OF TALK ABOUT.
PRUDENT SEE STAND AS A REVIEW UP
FRONT WILDFIRE FUN BUT I KNOW
THAT YOU KNOW OF WHETHER CENTER
REQUIRE OTHERS HERE WHO OF FOLKS
WHO EXPOSE HAVING THEIR POLICIES
CANCELED WE'RE GONNA HAVE. TO TO
MAKE A PUSH HERE I'M I'M
CONCERNED FRANKLY IN THE
COUNTIES WHERE WERE YOU KNOW
THOSE THOSE TOUGH TO REACH
SPACES WHERE YOU NEED.
BRUSH CLEARANCE ARE GOING TO
PRIVATE LANDS AND PEOPLE SAY NO
ANSWER PUSH BACK ON FIRE WE'RE
GONNA BE LOOKING AT SORT OF
TOUGHER TOOLS TO HELP POPLE GET
THAT ACCESS BUT TO YOUR POINT.
YOU'RE GOING TO TAKE THOSE STEPS
AND PUT IN THE EFFORT AND YOU
GET NO CREDIT ON THE BACK AND
YOU'RE STILL YOU'RE STILL NOT
GONNA BE ENSURE YOUR UNDER
INSURED.
YOU KNOW PEOPLE WENT THROUGH ALL
THAT HEADACHE FOR NOTHING SO
WILL AND SO ON AND IF WE GET TO
A POINT WHERE WHERE WERE.
WE YOU KNOW WE'VE MANDATE
INSURANCE OBVIOUSLY BEFORE WHEN
WE TALKED YOU KNOW GOOD DRIVERS.
WERE REASONABLE DRIVER YOU'LL
NEED TO PROVIDE INSURANCE
COVERAGE FOR THEM BUT AGAIN THE
FACT IS THAT WE NEED TO FOCUS ON
THE THE THE MITIGATION PART THE
RESILIENCY PART BECAUSE NO
MATTER WHAT IT'S GOING TO COST
US OF IF THAT COMMUTE DOES NOT.
MITIGATE AND WE MANDATE THAT
INSURANCE THE RATES ARE GOING TO
BE TO THE POINT WHERE PEOPLE CAN
AFFORD THEM ANYWAYS RIGHT.
SO AGAIN NOT THAT IT'S A SILVER
BULLET BUT I THINK IT IS REALLY
KEY TO WHATEVER WE MAKE IS THAT
HOW DO WE GET AHEAD OF THE GAME.
HOW DO WE THEN HAVE THE TOUGH
CONVERSATIONS WITH OUR LOCAL
GOVERNMENTS?
ABOUT WHAT ARE.
MITIGATION EFFORTS THAT NEED TO
BE MADE ONCE YOU REBUILD AND BY
THE WAY WE'RE TALKING ABOUT --
NOT GETTING THAN I FROM ENOUGH
MONEY TO BE ABLE TO REBUILD THIS
IS WHY THE COVERAGE A PART OF
YOUR POLICY SO CRITICAL OF ITS.
UP TO DATE.
THEN YOU KNOW YOU GET THE 10%
PIECE SO THAT IT ALLOWS YOU TO
BE ABLE TO PAY FOR THOSE
UPGRADES THOSE -- THAT WITH THAT
ARE MANDATED BY THE STATE AND BY
THE LOCAL GOVERNMENTS.
SO WHY WE WE AGREE WITH THE
COMMISSION'S RECOMMENDATION THAT
THERE SHOULD BE A REGULAR VISITS.
SO THAT WE CAN LET THE CONSUMER
KNOW HEY ARE YOU UP TO DATE ON
YOUR COVERAGE BECAUSE THAT GIVES
YOU THAT 10% THAT YOU NEED. TO
BE ABLE TO PAY AND IF YOU'RE UP
TO DATE.
GIVES YOU THE MONEY TO BE ABLE
TO THE ID'S BEAR THE THOUGH THE
BRUNT.
OF THE MITIGATION EFFORTS OF THE
STANDARDS AND AND COLD YOU NEED
TO UP.
BILL TO NOW THANK YOU.
ALL RIGHT -- CENTER HILL THEN
CENTER WILL CASKEY AND THEN
CENTER JACKSON [inaudible]
YOUR AND THE DRAFT COMMISSION
REPORT CALLED ON FOR DISABILITY
UTILITIES THE THE THE COMMUNITY
AND FIND THE WILD HEALTHCARE
FUNDS.
IN ACCORDANCE IS TO MAINTAIN THE
SPECIFIED LEVEL OF COMMERCIAL.
WILDFIRE LIABILITY GENERAL
LIABILITY ISURANCE IN ORDER TO
PARTICIPATE IN THAT FUND THE
COMMISSION.
DOES THE DEPARTMENT OF INSURANCE
TODAY TRACK UTILITY INSURANCE
PURCHASES AT ALL.
NO THAT IS UNDER THE PC PC IS
TRUE ON THE INSURANCE OR DO YOU
FEEL THAT YOU SHOULD PAY
ATTENTION -- WE HAVE SOME.
ABSOLUTELY FACTOR THAT WE WOULD
NEED THE RESOURCES OBVIOUSLY TO
BE ABLE. TO TO TO DO THIS BUT WE
FEEL THAT WE WOULD ALSO BE AN
APPROPRIATE OPPORTUNITY FOR US
TO LOOK NOT ONLY AT THE
INSURANCE THESE BUT THE RE
INSURANCE NEEDS RIGHT OF
UTILITIES.
AFTER THAT FALLS UNDER THE THE
CPC RIGHT THANK YOU.
THE CENTER WILL CASKEY.
I I GUESS I NEED A LITTLE
CLARIFICATION I'M ON PAGE THREE
OF THE REPORT AND I'M TO THE
QUESTIONS THAT WERE RAISED BY MY
COLLEAGUE FROM THE NORTH COAST.
IT SAYS THAT THE VAST MAJORITY
OF HOME INSURANCE IF INDICATE
97% IS FROM THE TRADITIONAL
ADMITTED CARRIERS THEN THEY SAY
ANOTHER 1%.
IS FROM THIS -- SURPLUS LINES
AND WE ONLY HAVE THIRTY FOUR
THOUSAND PEOPLE THAT ARE IN THE
FAIR PLAN.
SO IS IT THE CONSUMER THE JUST
THE SIZE THAT THEY DON'T WANT TO
HAVE INSURANCE OR IS THERE.
IS IT THE INSURER.
YOU KNOW IF THE IT SEEMS LIKE
THEY'VE GOT THESE THREE
ALTERNATIVES SAY THE MARKET THE
SURPLUS LINES IN THE FAIR PLAN --
BECAUSE YOU KNOW WE HAVE
UNINSURED SO THAT'S A THAT'S A
PERSON WHO OWNS A HOUSE MAYBE
WITH THEIR LIFE SAVINGS SAVINGS
THAT SAY THEY'RE GONNA GO NAKED
SO I'M WONDER.
IS I I WANT TO MAKE IT
AFFORDABLE AND AND DO THAT BUT
IS IT THAT BIG OF A PROBLEM I
GUESS IN YOUR WELL YOU KNOW
THAT'S THAT'S BEEN CHANGING
ESPECIALLY AFTER LAST YEAR -- WE
WE ARE SEEING AN UPTICK -- OF
FOLKS UTILIZING THE ACTUAL FAIR
PLAN -- AGAIN WE DON'T FEEL IT'S
IT YOU KNOW IT'S REALLY THE
FUTURE OF LAST RESORT.
BUT IN TERMS OF PEOPLE GOING
WITHOUT INSURANCE I MEAN HE YOU
NEED THE INSURANCE TO BE A BIT
OF THE OUT TO TAKE THE HOME OUT
SO -- I DON'T I DON'T I MEAN I
BY THE WAY LET ME I FORGOT TO
INTRODUCE JILL ARCHER MY AS A
SPECIAL DEPUTY -- IN THE
DEPARTMENT WHO'S BEEN HELPING ME
DEAL WITH A LOT OF THESE ISSUES
I DIDN'T A GUEST THERE'S A
PHENOMENA THAT GOES ON IS WHEN
YOU HAVE A MORTGAGE YOU
OBVIOUSLY HAVE TO HAVE INSURANCE
WHAT HAPPENS IS PEOPLE.
PAY OFF THEIR MORTGAGE AND THEN
THEY CANCEL THEIR INSURANCE.
IN A WHICH IS YOUR RESPONSIBLE
BEHAVIOR ESPECIALLY GIVEN
CLIMATE CHANGE AND THE INCREASED
DANGER I THINK THERE'S JUST THIS
EXPECTATION THAT.
IN VERSUS GOING TO PAY FOR
EVERYTHING AND I'M GONNA BE MADE
WHOLE AND THAT NOT A LOT OF
PEOPLE BUT THERE THERE ARE WE'VE
TALKED ABOUT IN THE REPORT.
WE DON'T KNOW THE NUMBERS OF
UNINSURED.
THE PEOPLE WE DO KNOW THAT THE
FAIR PLAN WHICH RIGHTS MAY BE
CLOSER CLOSER TO A HUNDRED AND
THIRTY THOUSAND HOMES --
CURRENTLY BUT THAT NUMBER HAS
BEEN INCREASING DRAMATICALLY IN
WILDFIRE AREAS WHILE IT IS GOING
DOWN AND URBAN AREAS.
SO IT IS A SMALL NUMBER AND THE
THE A SURPLUS LINES MIGHT HAVE
ONLY HAD TWENTY THOUSAND
POLICIES.
A YEAR OR TWO AGO AND NOW
THEY'RE UP TO SIXTY SEVENTY
THOUSAND POLICIES.
SO WHILE THE NUMBERS ARE STILL
VERY SMALL AND THOSE ARE KIND
END OF LAST YEAR.
WE THINK THERE'S BEEN A LOT OF A
LOT OF COMPLAINTS I'M SURE THAT
PEOPLE ARE HEARING.
IN MANY DISTRICTS OF PEOPLE
BEING NON RENEWED OR HAVING
THEIR PREMIUMS.
RADICALLY INCREASE SO THOSE ARE
KIND OF THEIR JUST SIGNALS.
BUT YET AT THIS MOMENT YOU WOULD
SAY YES THE MARKET PLACE IS
RESPONDING.
BUT IF YOU'RE IN SOME OF THESE
OUTLYING AREAS OR HIGHER RISK
AREAS YOU WOULD SAY THERE'S A
CRISIS.
IN A A QUESTION ON THE
MEDICATION NOT [inaudible]
TO NOT TO BEAT.
ORGAN BE BETTER HERE BUT THE
SENATE VERSION FOR LONG TERM
RESILIENCY INVESTMENT ON THE CAP
AND TRADE THE HUNDRED MILLION
DOLLARS WAS NOT.
ACCEPTED BY THE ADMINISTRATION
NOR WAS THE REGIONAL FOREST
RESTORATION PROJECTS THAT WE PUT
IN FOR HEALTHY FOREST WAS
REJECTED BY THIS ADMINISTRATION
BUT WITH THAT SAID -- YOU KNOW
THE STATE LACKS THE ABILITY TO
PLACE A LIEN ON PEOPLE'S
PROPERTY.
THE LOCAL GOVERNMENT CAN DO IT
THE CITY CAN DO IT THE WATER
DISTRICT CAN DO IT BUT THE STATE
DOESN'T HAVE THE AUTHORITY IF
WE'RE REALLY SERIOUS ABOUT
HARDENING AND HARDENING ASSETS
AND TREE REMOVAL FOR THE
MEDICATION.
WE DON'T HAVE THAT TOOL TO IN
FOR SAY WE WILL REMOVE THE TREE
AND WE WILL.
CHARGE YOU HOMEOWNER AND WE'LL
PUT IT ON BECAUSE OUR GUESTS
THAT'S ANOTHER TOOL YOU THINK
IT'S AN IMPORTANT TOOL OR NOT A
NECESSARY TOOL WELL I I CAN ONLY
SPEAK TOWARDS WHAT I'VE HEARD
FROM.
AND IT SEEMS TO ME THAT FOLKS --
FAIL TO DO THE APPROPRIATE
HARDENING ONE BECAUSE THEY JUST
CAN'T AFFORD IT.
I AND THEY'RE ALREADY PAYING
VERY HIGH PREMIUMS -- AND SO
WHEN THE DEVASTATION HAPPENS.
THE LEAST OF THE CONSIDER TRYING
JUST TO GET THE DWELLING BACK
AND MANY OF THEM SAY I I CAN'T
AFFORD THE THE THE THE UPGRADES.
HENCE WHY AGAIN THE COVERAGE A
IS CRITICAL BUT I DON'T THINK
WE'RE AT A POINT WHERE -- FOR
ITS NOT THAT FOLKS ARE JUST NOT
WILLING TO DO IT. ONE THERE'S
NOT A CLEAR BENCHMARK OF WHAT
SHOULD BE DONE. TO HARDEN YOUR
HOME IN A IN A GIVEN COMMUNITY
COMMUNITIES ARE VERY DIFFERENT
FROM OBVIOUSLY AS WE KNOW FROM
TOWN TO TOWN.
AND REGION TO REGION FILTERS
IT'S HARDER TO PROVIDE A SET
RECOMMENDATION WHY WE THINK YOU
KNOW CAL FIRE THE DEPARTMENT AND
ALTHOUGH THOSE OF US THAT DO
THIS WORK.
SHOULD COME TOGETHER TO FIGURE
OUT FOR THE COMMUNITY A WHAT
WOULD BE THE APPROPRIATE.
MITIGATION MEASURES AND
HARDENING MEASURES FOR THAT
COMMUNITY SO THAT THEN WE COULD
PUT THAT INTO -- AWAIT THAT'S
EASY FOR THEM TO UNDERSTAND SO
WE KNOW CLEARLY WHAT THE TO DO
COMMUNITY BE YOU NEED TO DO THIS.
IT'S VERY DIFFICULT TO YOU SEE
TO RAIN TOPOGRAPHY EVERYTHING'S
DIFFERENT IN THE STATE AND THE
NEEDS ARE GOING TO BE DIFFERENT
RIGHT NOW COMMUNITIES -- YOU
KNOW YOU KNOW WHAT SOME
STANDARDS ARE BUT YOU REALLY IN
TERMS OF A COMMUNAL.
ASPECT WE DON'T HAVE A FRAMEWORK
OF WHAT PEOPLE SHOULD FOLLOW IN
A REGIONAL ASPECT OF MEDICATION
AND AND HARDENING.
THERE CENTER JACK.
MISSION FOR BEING WITH US AND
THANK YOU ALSO TO YOUR STAFF --
I HAPPEN TO HAVE BEEN THE NON
RENEWED THIS YEAR AS A RESULT OF
THE THOMAS FIRE HAVING SPENT
THIRTY YEARS WITH THE SAME
INSURANCE COMPANY -- THEY JUST
SIMPLY T
RISK IN THIS AREA BY.
WE'RE WE'RE LEAVING -- AND THE
PROCESS OF TRYING TO RE RENEW
HAVING DONE ALL THE THE
MITIGATION STEPS IS
EXTRAORDINARY AND SO.
I WOULD BE VERY INTERESTED IF
THERE ARE SOME THINGS WE CAN DO --
THAT WILL -- PUT PRESSURE ON THE
INSURANCE COMPANIES IN A
SITUATION WHERE YOU HAVE TAKEN
ALL THE NECESSARY STEPS AND YOU
JUST HAPPEN TO LIVE IN THE WILL
WEAK.
AND YOU'VE DONE HARDENING OF
YOUR HOME YOU'VE TAKEN ALL ALL
MEASURES THAT ARE AVAILABLE --
IS THERE ANYTHING WE CAN DO
LEGISLATIVELY TO REQUIRE THE
INSURANCE COMPANIES MAN I DON'T
KNOW WHAT THIRTY YEARS OF
PREMIUMS ARE BUT I CAN ASSURE
YOU IT'S A LOT MORE THAN WE'VE
GOTTEN.
BACK -- ALTHOUGH OF BECAUSE WE
DID HAVE CLOSE TO ADEQUATE
INSURANCE ALTHOUGH PROBABLY NOT
WHEN WE WERE -- OF FORCED TO TO
VACATE OUR HOME.
WE WERE COMPENSATED WHEN WE ST
ELSEWHERE DURING THAT PERIOD OF
TIME THESE ARE THE SMALL THINGS
THAT ACTUALLY ATTENDED THEY CAN
BE VERY IMPORTANT.
BUT I'M WONDERING.
IS THERE ANYTHING THAT.
WE CAN DO LEGISLATIVELY TO HELP
YOU WHEN YOU GET THESE COMPANIES
WHO DON'T WANT TO WRITE ANYMORE
INSURANCE OUR A IF YOU'VE DONE
ALL THE THINGS THAT YOU SHOULD
HAVE DONE -- BECAUSE FRANKLY
GOING OUT AND TRYING TO FIND NEW
INSURANCE -- IS FOR HER
EXPENSIVE BOTH THE PROCESS AND
AT THE END OF THE DAY YOU CAN AS
SOMEONE MENTIONED GET -- SOME
INADEQUATE INSURANCE LOCALLY AND
THEN YOU HAVE TO GO OUT OF STATE
THEIR PEOPLE ALWAYS WILLING TO
WRITE INSURANCE.
BUT WITHIN OUR OWN STATE WHAT
CAN WE DO. TO BRING OUR OWN
COMPANIES TO THE TABLE MORE
EFFECTIVELY AND IS THERE A TOOL
OR THEIR TOOLS THAT WE CAN BE
LOOKING AT THE WE DON'T HAVE NOW
THAT WILL.
REQUIRE THEY INSURE YOU I MEAN
IF YOU DON'T OWN YOUR HOME. ONE
OF THE CONDITIONS YOU'RE
MENTIONING IS TO GET A MORTGAGE
YOU NEED TO HAVE INSURANCE
SICKLY THE LENDER WANTS TO BE
SURE THEY'RE GOING TO BE
COMPENSATED.
IF YOU LOSE THE HOME YOU DON'T
HAVE INSURANCE THEY FOR CLOSING
THE MORE MORTGAGE YOU DO YOU
LEAVE.
YOUR GONE SO WE HAVE A PROBLEM
WITH LACK OF HOUSING WHEN PEOPLE
LOSE THEIR HOMES THROUGH THESE
KINDS OF CONDITIONS.
WHAT IF ANYTHING CAN WE DO A
LEGISLATIVELY TO PROTECT AGAINST
ACTUALLY WHAT THE DISCUSSIONS AS
WE MENTIONED EARLIER WERE -- IF
YOU DO THE APPROPRIATE HARDENING
THAT WE WOULD REQUIRE YOU.
TO PROVIDE INSURANCE FOR THOSE
HOMES IS THAT THE LONG HOURS
SAID SOMETHING WILL HAVE TO DO
SOMETHING THAT WERE THAT IT'S
THE PART OF THE RECOMMENDATION
THAT WE WORK WITH WE WORK WITH --
THAT I KNOW ONE COMMISSION.
BUT AGAIN NOW WE HAVE TO FIGURE
OUT CLEAR.
EVIDENTIARY DATA DRIVEN
STANDARDS THAT ARE GOING TO GET
US TO A POINT WHERE WE CAN PROVE
THAT THESE TECHNIQUES ARE GOING
OUT.
I ACTUALLY GONNA HELP ENOUGH
FIRE SITUATION OBVIOUSLY WE'RE
GOING TO HAVE THIS THE ISSUES
LIKE PARADISE WHERE.
THEY'RE JUST DEVASTATING AND YOU
KNOW THE CONTROLLING OF THAT IS
VERY UNIQUE -- BUT THOSE ARE
PART OF THE RECOMMENDATIONS THAT
WE ARE SUPPORTING.
THAT IF YOU DO EVERY IT ONCE WE
COME UP WITH EXACTLY WHAT WE
FEEL IS APPROPRIATE FOR YOU TO
HARD IN YOUR HOME.
GIVEN THE COMMUNITY THAT YOU
LIVE IN.
YOUR LIVING AND THAT YOU SHOULD
BE.
INTEREST COVERAGE SHOULD BE
REQUIRED TO OFFER A POLICY YOU
SHOW -- THAT I ASSUME THEN THAT
YOU'RE SUPPORTING MY SP ONE
EIGHTY TWO WHICH ACTUALLY DOES
ADDED.
TO IT -- REQUIRES HEIGHTENED
COMMUNITY ENGAGEMENT.
IN PLANNING STANDARDS -- IT ALSO
REQUIRES RETROFIT PLANS IN THOSE
HOMES THAT ALREADY BUILT IN
THESE AREAS I'M ASSUMING THESE
ARE THE KINDS OF THINGS.
THAT YOU'RE TALKING ABOUT AND IT
ALSO A BETTER COMMUNITY ALERT
STANDARDS FOR THOSE COMMUNITIES
ALL OF THE THINGS WERE THOSE AND
OTHER THINGS THAT WE'RE LOOKING
AT AS FOR CONTINUE TO HAVE
CONVERSATIONS WITH THE STRIKE
FORCE AND SO.
ARE WE GETTING ANY -- POSITIVE
RESPONSE FROM THE INSURANCE
INDUSTRY ON THIS OR THEY
RESISTING THE NOTION OF US GOD
FOR BID TELLING THEM WHAT THEY
HAVE TO DO TO CONTINUE DOING
BUSINESS AND MAKING LOTS OF
MONEY HERE IN CALIFORNIA.
THE ARMY WERE THERE THE PART OF
THE DISCUSSIONS WE'VE MET WITH
THE INDUSTRY TWICE NOW -- THERE
HAS BEEN VERY FRUITFUL
DISCUSSIONS IN TERMS OF YOU KNOW
WHAT.
ARE THE OBLIGATIONS THAT WE ARE
EXPECTING OF OF COVERAGE OF
PEOPLE TO DO THE RIGHT THING --
BUT ALSO YOU KNOW.
WE HAVE TO FIGURE OUT HOW THAT
IMPACTS ULTIMATELY -- THE
HOMEOWNER IF WE REQUIRE IN FORCE --
AN INSURANCE PRODUCT THEN IF
IT'S NOT AFFORDABLE HYDRO.
WE'RE STILL BACK AT SQUARE ZERO
ALL RIGHT SO HOW DO WE THEN
FIGURE OUT -- A BALANCE OF WHAT
IS A OF MITIGATION EFFORT WAS A
HEARTENING THAT THE INSURANCE
COMPANIES ARE GOING TO SEE
THROUGH DATA AT STRIVE AND THAT
SAYS.
THIS CAN ACTUALLY PROTECT YOU
AND FURTHER MORE IF THE
COMMUNITY THEN ENGAGES AND THE
CITY EITHER ON A REGIONAL LEVEL.
THAT GIVE THE INSURER -- OF A
BETTER IDEA OF THE FACT THAT
IT'S NOT JUST.
YOU KNOW PARTIAL BY PARCEL THAT
IT'S ACTUALLY ENTIRE COMMUNITY
THAT COULD BE INSURABLE AND
MAYBE DRAW AT RISK A LITTLE DOWN
WHICH WILL HOPEFULLY BRING THE
PREMIUMS DOWN SO I KNOW FROM MY
OWN EXPERIENCE OUR LOCAL FIRE
DEPARTMENT COMES OUT AND THEY DO
AN INSPECTION THEY GIVE YOU
NOTICE.
IF YOU DON'T CLEAR OFF X. WARREN
SEE THEY'LL DO IT FOR YOU.
THEY DON'T NECESSARILY DO A
WEALTH BUT THEY WILL CLEAR THE
AREA AND IS THIS THE KIND OF
THING YOU'RE TALKING ABOUT THAT
PROACTIVE APPROACH
RECOMMENDATIONS THAT WE WOULD BE
LOOKING AT IN THE DEPARTMENT IS
THAT.
THERE THERE'D BE A ACCESS TO A
FIRE STATION WITHIN A CERTAIN
AMOUNT OF MILES IN THIS IN A
GIVEN COMMUNITY OR NEIGHBORHOOD --
THESE ARE ALL THINGS THAT WE'RE
LOOKING AT AND WILL BE UNVEILING
SHORTLY ONCE YOU KNOW THE THE
STRIKE FOR SYSTEM HAVING
CONVERSATIONS BUT THOSE ARE THE
THINGS THAT EXACTLY WE'RE
LOOKING AT VERY THANK YOU.
OKAY THE LAST -- WERE OVER.
OKAY SIR MORE LUCK THAN CENTER
HUESO AND HE WILL BE THE LAST
WORD.
THANK YOU MR CHAIRMAN
COMMISSIONERS LARA -- WHEN A
INSURANCE COMPANY THAT'S NOT
WITHIN CALIFORNIA OR MAYBE
WITHIN CALIFORNIA WANTS TO SELL
HOMEOWNERS INSURANCE THEY HAVE
TO REGISTER THROUGH YOUR
DEPARTMENT IS THAT CORRECT
CORRECT?
AND SO IF THEY WANT TO DISENGAGE
AND SELLING INSURANCE WITH THEY
HAVE.
TO ON REGISTER OR REQUEST TO BE
[inaudible]
TERMINATOR.
REMOVED FROM THE MARKET PLACE
THEY AN AND FOR CAN WITHDRAW
FORMALLY FROM A LINE OF BUSINESS
THEY WOULD FILE FROM THE DIP.
WITH THE DEPARTMENT BUT IF THEY
WANT TO REDUCE THEIR WRITINGS.
TO MAYBE A HIGHER STANDARD OF OR
A LOWER AMOUNT OF RISK.
BY THEIR UNDERWRITING THEY CAN
DO THAT WITHOUT ANY NOTIFICATION.
AND SIMPLY THE NOTIFICATION THAT
GOES OUT TO THE CUSTOMER.
THE CONSUMER ABOUT THE FORTY
FIVE DAY NOTICE NON RENEWAL --
SENATOR JACKSON MENTIONED.
DESPITE.
WHATEVER YOU'VE DONE AT YOUR
PROPERTY THEY'VE JUST DECIDED TO
RETRENCH.
THEY CAN DO THAT UNILATERALLY
DISARM THEIR OWN ON THEIR OWN
YES AND THEN -- SO THOSE AT THAT
HAVE.
REQUESTED TO BE REGISTERED ARE
YOU KEEP TRACK OF THAT AND AND
OR DO WE HAVE A TREND LINE
THAT'S GOING A CERTAIN DIRECTION
WOULD TRACK THAT BUT I DON'T
THINK ANY ANSWER -- HAS FILED TO
WITHDRAW FROM THE LINE FROM
WRITING HOMEOWNERS INSURANCE OR
FIRE INSURANCE.
SO WE HAVE NOT SEEN ONE
COMPANIES SAY THAT'S ENOUGH FOR
LEAVING CALIFORNIA. TO MY
KNOWLEDGE THAT IS CORRECT YOU'RE
JUST HANGING ONE COMPANY DO THAT
THEY'RE JUST SAYING WE WE DON'T
WANT TO BE IN SANTA BARBARA
ANYMORE.
PARTS OF SANTA BARBARA POTENTIAL.
AND I I SUSPECT PARTS OF ALL
PLACES THERE WHERE THERE HAVE
BEEN THE FIRES YEAH YEAH WITH
THE THIS IS A UNIVERSAL PROBLEM
AND AND THE WE'RE WE'RE SEEING
REAL.
CHALLENGE BECAUSE THE COSTS OF
REINSURER THE COST OF INSURANCE
EVEN IF THEY DO RENEW.
CAN BE TRIPLE FOUR TIMES FIVE
TIMES THE ORIGINAL COST AND FOR
PEOPLE ON FIXED INCOMES.
THAT BECOMES A BONE CRUSHER
THANK THEY CAN'T DO IT SO.
YOU KNOW THERE'S OBVIOUSLY WE
DON'T WANT THE COMPANIES TO GO
OUT OF BUSINESS BUT WE REALLY
VERY VULNERABLE NOW AND AND THE
THE FAIR PLAN DOES NOT.
DOES NOT PROTECT A ADEQUATELY
OUR FOR OUR PROPERTY JACKSON
JUST AS YOU WERE MENTIONING NOT
TO BELIEVE THE POINT BUT IF.
WE WE WE WANNA HEALTHY INSURANCE
MARKET WE NEED IT IN ORDER TO
PAY OUT THE CLAIMS -- AND SO.
YOU KNOW AGAIN AS WE HAVE THESE
DISCUSSIONS ABOUT FUNDS ABOUT --
DIFFERENT WAYS OF PAYING -- FOR
EITHER THE LIABILITY OF THE
UTILITIES ARE OR THE HOMEOWNERS.
WE OFFER ALSO AFTER SENATE UNDER
INSURANCES CONTINUES TO BE A
MAJOR POLICIES ARE FOLKS THAT.
ARE NOT YET EVEN PAYING FOR WHAT
THEY'RE A PROPERLY SHOULD BE
COVERED.
FOR YET WE'RE HAVING
CONVERSATIONS ABOUT.
YOU KNOW TAKING ON ADDITIONAL A
FEE OR ATTACKS AND AND THAT JUST
MAKES IT DIFFICULT FOR EVEN MORE
DIFFICULT FOR FOLKS.
THAT CURRENTLY ARE STILL UNDER
INSURED FOR THE PUBLIC THE
COUNTY HAVE.
SO I'M JUST TRYING TO CONFIRM
ANECDOTAL DATA.
SO IT'S IT'S NOT THAT THERE IS
THERE IS WE DON'T HAVE.
A TREND OF COMPANIES LEAVING
CALIFORNIA'S THAT'S THAT'S GOOD
TO HEAR THE ISSUE IS.
THEY'RE GETTING OUT A CERTAIN
GEOGRAPHICAL ZONES OR MAYBE
THEY'RE ASKING A MUCH HIGHER
PREMIUM CORRECT SO -- AND IT IN
FOLLOWING UP WITH WHAT YOU JUST
SAID YOU KNOW HOW TO YOU KNOW
STILL MAKE A GOOD MARKET FOR
INSURANCE COMPANIES.
WE'VE HAD PROP ONE OF THREE IN
PLACE FOR THREE DECADES NOW.
IS THE TIME TO LOOK AT MAYBE
SOME MODIFICATIONS ARE YOU
GETTING PUSHED BACK FROM THE
INDUSTRY IS SAYS WHAT IF YOU HAD
A MAGIC ONE YOU COULD FIX X. OR
Y. OR Z..
THAT WOULD MAKE THE MARKET MORE
COMPETITIVE AND MAYBE PREMIUMS
LOWER.
WELL I MEAN I HAVE YET TO MEET
ONE ENSURE WHO DOESN'T.
WHO WHO LIKES PROP THIRTY ONE
BUT -- I'LL TELL YOU IF IF.
THEY WANT TO INCREASE THE RATES
THERE'S A PROCESS FOR THAT
WITHIN PROP ONE OF THREE WE'RE
NOT STOPPING THAT FROM HAPPENING
AND ACTUALLY SAID SEVERAL
COMPANIES HAVE -- ARE UTILIZING
THAT.
PUBLIC PROCESS TO BE ABLE TO TO
RAISE OUR RATES IT'S JUST A HAS
A TENS OF HAVING TO GO THROUGH
THIS PUBLIC PROCESS WHICH WE
FEEL IS IMPORTANT TO MAINTAIN A
FOR GUNNERY SOMEBODY'S RATES.
BEYOND THE 7% SO THERE IS A
PROCESS FOR FOLKS TO RAISE THE
RATES CURRENTLY UNDER PROP ONE
OF THREE WHICH WE FEEL IS
IMPORTANT -- NOW THE THE THE
CONVERSATION AROUND -- HOW DO WE
CONTINUE A ROBUST MARKET AND
HAVING THE YOU KNOW AS WE KNOW
THE INSURANCE MARKET IN
CALIFORNIA IS THE LARGEST IN THE
COUNTRY WHICH GIVES THE FROM THE
WAY?
BUT WHAT EVER -- YOU KNOW IT'S
LITERALLY LIKE A BALLOON WE'VE
YOU SQUEEZE ONE WAY IT'S GONNA
YOU KNOW IT'S EXPAND AND THE
OTHER WAY AND WHO'S GONNA COVER.
SOMEBODY'S GONNA ALWAYS PAY AND
WE'RE TRYING TO FIGURE OUT AS A
DEPARTMENT OURSELVES.
HOW DO WE GET AHEAD OF THIS IS
THIS IS WHERE WE KEEP GOING BACK
TO MITIGATION?
BECAUSE OF WE INCENTIVIZE
COMMUNITIES TO DO THE RIGHT
THING AT A REGIONAL LEVEL.
A CREATES A A HOPEFULLY CREATES
A A AN ENVIRONMENT BY WHICH THE
INSURERS WANNA RIGHT CONTINUE TO
WRITE.
AND THAT WE'RE DOING EVERYTHING
RIGHT TO PREVENT FUTURE FIRES.
SO I THINK IT GETS.
TESTY WHEN YOU START FREAKING
OUT WELL THERE'S A CURRENT
PROCESS IN PLACE NOW IF YOU WANT
TO GO HIGHER WHICH IS.
YOU KNOW WE HAVE OUR ACTUARY
ILLS WE HAVE OUR ACTUARIES AND
EVERYBODY LOOKING AT MAKING SURE
OF IT'S JUSTIFIED AND WE'VE BEEN.
WE'VE WE'VE HAD TWO OF REYES WE
HAVE HAD RAISE RATES BECAUSE
IT'S JUSTIFIABLY NEEDED. FOR
THIS COMPANY OR THE IN THE
MARKET TO CONTINUE TO BE ROBUST --
AND SO YOU KNOW THERE'S GONNA BE
PEOPLE THAT ARE NOT GOING TO
WANT TO GO TO THE PROCESS
BECAUSE CLEARLY THEY DON'T WANT
THE PUBLIC.
YOU KNOW PROCESS TO INDICATE
THAT THE UNION OF RAISE OUR
RATES.
BUT THERE IS A PROCESS IN PLACE
THE BUT THE VOTERS VOTED FOR
THIS. TO TO CREATE MORE
TRANSPARENCY FOR US -- BUT IT
DOESN'T LIMIT YOU DON'T NEED TO
AND THE PROCESS RIGHT RIGHT I'M
JUST CURIOUS IF THERE WAS SOME.
AREA WHERE YOU CAP TIGHT YEAH
YOU KNOW THAT'S A LEGITIMATE
GRIPE.
IN MAYBE WE OUGHT TO LOOK AT IT
SO YOU'RE SAYING THERE ISN'T.
BUT WHEN YOU ARE THEIR TRENDS
THEN OF OF MORE COMPANIES COMING
TO YOU FOR RATE INCREASES ABOVE
7% ABSOLUTELY WHAT WHAT 10% 20%
50%.
ARE A NUMBER OF RATE FILINGS
DOUBLED THE LAST TWO YEARS
SEVENTEEN OR EIGHTEEN WERE
DOUBLE THE NUMBER OF HOME WONDER
RATE INCREASE FILINGS.
IN THE TWO PRIOR YEARS AND THOSE
HAVE BEEN APPROVED THE SEVENTEEN
EIGHTEEN RATE FILINGS FOR
INCREASES I HAVE ALL BEEN
APPROVED.
OKAY SO IT HAS GONE UP.
SIX THANK YOU THANK YOU
COMMISSIONER THANK YOU MISTER OR
HUESO [inaudible]
ALL.
WELCOME SENATOR AND I ALSO
APPLAUD YOUR JUMPING INTO THE
THE WEEDS.
IMMEDIATELY UPON -- COME IN AND
OFFICE OF CONGRADULATIONS ON ON
ALL YOUR SUCCESS.
AND FOR STEPPING UP TO THIS VERY
IMPORTANT TASK BUT JUST
FOLLOWING UP WITH WITH THAT I
MEAN WAS THAT INCREASE SUPPOSED
TO OF A MINUTES INTENDED PURPOSE
WAS.
TO INJECT SOME -- SOME HEALTH
INTO THE INSURANCE MARKET I MEAN
IS THAT.
YEAH -- RATE INCREASES ARE
NGUYEN ANSWERS LOOK AT THEIR
PAST LOSS EXPERIENCE AND PROJECT
WHAT THEY'RE GOING TO NEED TO
CHARGE NEXT YEAR.
SO IT IT YOU KNOW A AYE ON ON
ACTUARIAL ANALYSIS YES.
SO WHEN WHEN I LOOKED AT LETTER
THAT WAS SENT BY -- THE
INSURANCE INDUSTRY RECALL.
REGARDS -- TO THE REPORT --
THERE IS SO.
I STRUGGLE TO UNDERSTAND IT BUT
THE REASON I'M ASKING QUESTIONS
SO TRY TO UNDERSTAND WHAT KIND
OF SYSTEM THAT WE HAVE -- UNDER
OF THE REPORTS -- APPENDIX THREE
THEY THEY MAY RESPOND TO SOME OF
THE RECOMMENDATIONS
RECOMMENDATION NUMBER.
TWO IS THAT CALIFORNIA'S SHOULD
PROVIDE PRESERVE ITS RISK BASED
APPROACH TO PRICE IN HOME
INSURANCE.
AND THEY RESPOND.
THAT CALIFORNIA THAT WE SHOULD
CHANGE THAT SENT US TO SAY.
THE CALIFORNIA SHOULD EMBRACE
RISK BRACE PRICE INSURANCE AND
SO THE QUESTION I HAVE IS DO WE
HAVE.
A RISK BASED APPROACH. TWO OF
PRICE INSURANCE.
YES -- THE RATE INCREASE WHY DID
THEY SAY THAT WE DON'T.
I THINK THEY WOULD ALWAYS LIKE
MORE RATE TO I I GUESS BUT THAT
THEY SEGMENT THE RATE SO THAT
HIGHER WILD FIRE RISK AREAS.
PAY SIGNIFICANTLY HIGHER
PREMIUMS SO THAT'S THE THAT'S
WHAT THE END GAME I MEAN --
THEY'RE IDENTIFYING.
CALIFORNIA PUTS CAPS IN TERMS OF
RATES RIGHT SO THROUGH YOUR
OFFICE YOU DECIDE THIS IS WHAT'S.
NOT NOT A CAP WHAT'S FAIR PRICE
WE WOULD APPROVE WHATEVER IS
ACTUALLY PROVEN TO BE THE
NECESSARY RATE INCREASE.
THEY CAN INCREASE BY AS MUCH AS
THEY ARE ABLE TO JUSTIFY ACTUAR
AND THEY WOULD BE LIKE TO BE
LESS REGULATE IN THAT AREA IS
THAT WHAT THAT IS ALL ABOUT I'M
JUST TRYING TO UNDERSTAND WHAT
THIS IS ABOUT OKAY.
AND AND WITH THAT WOULD IN
REGARDS -- TO POLICY LIMITS AND
YOU KNOW OTHER OTHER OTHER OTHER
RECOMMENDATIONS THEY'D LIKE TO
BE ABLE TO SET THAT.
IN TERMS OF AND SAY -- WILL PUT
MORE MONEY INTO THIS
[inaudible]
OF I MEAN THE FAIR PLAN WAS
BASICALLY ESTABLISHED BECAUSE WE
COULDN'T ENSURE CERTAIN AREAS IS
THAT A LACK OF INSURANCE IN
THOSE AREAS SET BY THE FACT THAT
WE WE TRY TO REGULATE.
WHAT THE INSURANCE COMPANY KNOWS
THE FAIR PLAN WHEN IT WENT INTO
EFFECT WILL LONG BEFORE
PROPOSITION ONE OF?
THREE AND ARGUABLY WERE IN NOW
THEY WERE HIGH RISK AREAS BUT
ALSO AREAS THAT INSURERS SIMPLY
CHOSE NOT TO WRITE.
URBAN AREAS THAT THEY DID NOT
KNOW RIGHT.
URBAN AREAS THAT HAVE MAYBE LOW
INCOME I KNOW I WAS RAISED IN A
CALIFORNIA FOR THE FAIR PLAN
NEIGHBORHOODS SO I KNOW WHAT
THAT MEANS.
BUT THE THE OTHER QUESTION IS
REGARDING THE FAIR PLAN.
AND STRENGTHENED UNIT -- THERE'S
ALSO THEY MAKE A CASE FOR
SUBSIDIZED IN THE FOR PLAN AS A
FOR PLAN EVER BEEN SUBSIDIZED
DOES IT REQUIRE SUBSIDY.
AND IS IT UNDER FUNDED.
OF I THINK WHEN THE A FAIR PLAN
WAS INITIALLY CREATED IN SIR --
IS MADE A CONTRIBUTION. TWO OF
FUNDED.
THEY ACTUALLY HAVE RECEIVED --
DISTRIBUTIONS FROM THE FAIR PLAN
OF PROFITS IN RECENT YEARS.
HOWEVER I THE FAIR PLAN DID
SUFFER SIGNIFICANT LOSSES IN TWO
THOUSAND SEVENTEEN AND TWO
THOUSAND EIGHTEEN I DON'T KNOW
THAT THEY'VE HAD TO DO AN
ASSESSMENT.
BUT THE INSURERS ARE THE
BACKSTOP IF THE FAIR PLAN WERE
TO GO THROUGH ITS CAPITAL AND
REINSURANCE.
THANK.
THANK YOU BOTH VERY MUCH
COMMISSIONER THANK YOU THANK YOU
NUMBERS WE SHOULD BE A THANK YOU.
HE NOW OUR FINAL -- PANELISTS IS
PROFESSOR MICHAEL LARA THIS WAR
WILL DISCUSS ISSUES CONCERNING
COST RECOVERY AS WELL AS FIND
CONCEPTS AND RECOMMENDATIONS
PERTAINING.
THE PAYMENT WHILE FAR RELATED
CLAIMS WELL I WELCOME YOU --
PROFESSOR LAURA I APOLOGIZE FOR
THE SECOND TIME IN A ROW YOU'RE
THE LAST ONE ON THE YOU KNOW ON
THE ORDER.
IT'S CERTAINLY NOT THAT THAT IS --
THE LEAST IMPORTANT BECAUSE ALL
THESE ISSUES ARE INCREDIBLY
IMPORTANT SO THANK YOU FOR YOUR
GREAT WORK FOR BEING HERE.
ALL.
THANK YOU FOR HAVING ME -- AND I
APOLOGIZE BUT CITY BETWEEN YOU
AND A BIRTHDAY DINNER -- ORDERED
OUT OF THE I'M IN A I'M IN A
SPEECH TODAY -- PRIMARILY ABOUT
THE SUB CHAPTER THAT -- CHAIR
PETERMAN AND I WORKED ON
TOGETHER -- BUT BEFORE I DO THAT
I WANT TO JUST SECOND SOMETHING
THAT BOTH -- CHAIR PETER MEN AND
COMMISSIONER LARA HAVE
EMPHASIZED AND I THINK THIS
REALLY CAME OUT OF ALL THE
TESTIMONY THAT WE HEARD.
THE IMPORTANCE OF FULLY FUNDING
AN INTENSIVE MEDICATION EFFORT
IN THE STATE OF CALIFORNIA.
I THINK CANNOT BE OVERSTATED --
WE ARE CONTEMPLATING MULTI
BILLION DOLLAR INVESTMENTS -- IN
TERMS OF SOCIALIZING COSTS.
AND I THINK THE THE WORK THAT
THE DAY NINE A ONE COMMITTEE DID
LAST YEAR TO REALLY RAMP UP OUR
INVESTMENT AND WHILE FOR
MEDICATION IS IS ADMIRABLE AND
WE NEED TO KEEP GOING FURTHER
THAN THAT.
THERE'S SO MUCH TO BE DONE AND
THERE THE PAYOFF TO MITIGATION
IS NOT SOMETHING ON THE ORDER OF
SIX TO ONE AND SO.
IT'S SOMETHING THAT WE SHOULD BE
LOOKING AT OPPORTUNITIES TO FOR
INVESTMENT -- LOOKING AT THE
COMMUNITY LEVEL.
AND IN TERMS OF FUELS MANAGEMENT
AND FUEL LOAD -- AND ALSO.
AT THE INDIVIDUAL HOMEOWNER
LEVEL IN TERMS OF HOME HARDENING
AND DEFENSIBLE SPACE -- CHAU.
I AM GONNA FOCUS BRIEFLY AND
THEN -- HOPEFULLY LEAVE TIME FOR
QUESTIONS ON OUR DISCUSSION THE
OF A WILDFIRE FUND.
AS AN OPTION AND ASSOCIATED.
ASPECTS OF COST RECOVERY -- OUR
COMMISSION -- ULTIMATELY
RECOMMENDED THE CREATION OF WHAT
WE CALL -- A WILDFIRE VICTIMS
FUND [inaudible]
AND I THINK THE BEST WAY TO
THINK ABOUT THIS PROPOSAL IS AS
SORT OF A SECOND INSURANCE
POLICY [inaudible] FOR UTILITIES.
THE CURRENT UTILITY LIABILITY
COVERAGE IS ON THE ORDER OF A
BILLION TO BILLION HALF DOLLARS
THAT'S REALLY LIMITED BY
CAPACITY IN GLOBAL MARKETS IN
YOU KNOW WILLINGNESS TO INSURE.
CALIFORNIA WILDFIRE RISK BELIEVE
IT OR NOT IS PRETTY LIMITED AT
THIS POINT.
AND UTILITY STRUGGLE TO OBTAIN
INSURANCE IS TO GIVE YOU A SENSE
THAT INSURANCE TYPICALLY COSTS --
THIRTY CENTS ON THE DOLLAR SO TO
COVER A BILLION DOLLARS RIGHT
NOW UTILITIES HAVE TO PAY ABOUT
THREE HUNDRED MILLION DOLLARS
PER YEAR.
SO IT'S VERY EXPENSIVE INSURANCE
THINK ABOUT IF YOUR HOMEOWNER'S
POLICIES COST THAT MUCH RIGHT --
SO.
THE VICTIMS FIND WOULD SERVE AS
KIND OF A SECONDARY INSURANCE
POLICY IN A THE GOAL OF FAT IS
REALLY TO PROTECT RATE PAYERS
FROM WILDFIRE COSTS.
AND TO CREATE GREATER CERTAINTY
FOR VICTIMS THAT THEY WILL
ACTUALLY GET PAID RATHER THAN
SEEING THEIR CLAIMS SETTLED AND
AND NOT PAID BECAUSE THE COMPANY
ENTERED BANKRUPTCY OR DISCHARGED
IN BANKRUPTCY AND PAID AT A MUCH
DISCOUNTED RATE -- THERE
ENORMOUS CHALLENGES -- TO
EXECUTING ON THIS KIND OF A
POLICY AND WE ARE.
CLEAR ABOUT THEM IN THE REPORT
AND I RECOMMEND THAT YOU THINK
ABOUT THE POLICY PROPOSAL BUT
ALSO READ OUR OUR DISCUSSION OF
THE CHALLENGES AND I THINK THE
BIGGEST CHALLENGE IS REALLY
INVOLVED -- THEY NEED TO GET
CONTRIBUTION [inaudible]
SUBSTANTIAL CONTRIBUTION REALLY
SHARED SACRIFICE -- FROM
UTILITIES POTENTIALLY FROM OTHER
PARTIES -- THERE ARE THERE IS
PERHAPS SOME CLARITY ABOUT HOW
AND IF THERE IS SOME SORT OF A
FIND HOW RATE PAYERS MIGHT
CONTRIBUTE TO THAT.
BY EXTENSION OF THE CURRENTLY --
IN FOR STATE IF YOU ARE BOND
CHARGE -- THERE'S MUCH LESS
CLARITY ABOUT HOW OTHER ACTORS
THAT ARE.
ACCOUNTABLE AND SHOULD BE HELD
ACCOUNTABLE AND SHOULD SHARE IN
THE COSTS OF THE DRAMATIC
INCREASE RISKS THAT THE STATE IS
CONFRONTING.
SHOULD CONTRIBUTE AND THAT'S A
THAT'S A KEY CHALLENGE SECONDARY
CHALLENGER JUST MENTION BY.
ARCHER PETERMAN IS THE ISSUE OF
HOW.
A COMPANY THAT IS IN BANKRUPTCY
COULD CONTRIBUTE. TO FIND AND
THEREFORE JOIN THE FUND.
OBVIOUSLY THAT'S A BIG QUESTION
FOR P. JEANNIE BUT I THINK THAT
THERE ARE CREATIVE SOLUTIONS
THAT ARE POSSIBLE.
IF THERE IS LEADERSHIP SHOWN BY
THE STATE A DIRECTION CHARTED BY
THE STATE I THINK THERE'S THERE
ARE POSSIBILITIES FOR OVERCOMING
MATCH CHALLENGES WHILE -- I
WOULD EMPHASIZE THAT.
THIS KIND OF A PROPOSAL ALLOWS
FOR RULES THAT WOULD REQUIRE.
RE CAPITALIZATION TO THE FIND IF
AND WHEN UTILITIES ARE IMPRUDENT
OR NEGLIGENT.
IN THERE ARE EITHER CONSTRUCTION
MAINTENANCE OR OPERATION OF
THEIR SYSTEM IF UTILITIES DO BAD
THINGS THERE'S NO REASON THAT A
FUNDS COULDN'T REQUIRE THEM. TO
TO READ -- REPAY THE FUND FOR
SOME FRACTION OF THE LOSSES --
THE BENEFIT OF THIS SORT OF A
FIND IS THAT IT WOULD ALLOW AS I
SAID -- PROVIDE ESSENTIALLY LIKE
A MOAT BETWEEN WILDFIRE COSTS
AND RATE PAYERS THAT ARE ALREADY
BURDENS.
IT WOULD ALSO CREATE GREATER
CERTAINTY THAT HE VICTIMS WILL
ACTUALLY GET PAID AND GET PAID
HOPEFULLY AT FASTER AND MORE
TIMELY FASHION -- IT WOULD ALSO.
INCREASE THE SOLVENCY AND REDUCE
THE BANKRUPTCY RISK FOR THE
UTILITIES WHICH HAS A SECONDARY
IMPACT ON RATE PAYERS IN TERMS
OF LOWER -- BORROWING COSTS
ACOSTA CAPITAL GENERALLY FOR
UTILITIES THE I. O. U.'S HAVE
RECENTLY ASKED FOR A SIX HUNDRED
BASIS POINT INCREASE.
IN THEIR COST OF CAPITAL THAT IS --
TO PUT IT MILDLY EXTRAORDINARY --
AND ON AFFORDABLE FOR THE STATE
I MEAN IT'S A SIMPLE AS THAT IF
WE'RE GOING TO MAINTAIN A BEST
IN CLASS ELECTRICITY
INFRASTRUCTURE PARTICULARLY ONE
THAT GETS CLEANER.
OVERTIME AND DELIVERS ON OUR
CLIMATE GOALS.
WE CAN'T HAVE 1617% COSTS
CAPITAL JUST DOESN'T I'M NOT
CLEAR HOW THAT COULD WORK.
SO.
A LARGE UTILITY FUND WOULD HELP
TO SOLVE THOSE ISSUES --
IMPORTANTLY WE SUGGEST THAT.
IT SHOULD NOT BE FOREVER.
THIS IS THE KIND OF FIND THAT
NEEDS TO EXISTS NOW IN THE
PRESENT SITUATION BUT NEED NOT
INDOOR INDEFINITELY.
AND THAT WE WOULD RECOMMEND THAT
ANY IF IF THE SORT OF AN
APPROACH IS TAKEN OR OF ANY SORT
OF A FUND IS CREATED THERE BE
PERIODIC OFF RAMPS FOR
CONSIDERATION -- THAT TO WIND
DOWN THE FUND IF AND WHEN
WILDFIRE RISKS ARE REDUCED AND
WE CAN BE CONFIDENT THAT A VERY
LARGE FUND IS NO LONGER REQUIRED --
WE GO INTO SOME DETAIL IN THE
REPORT ALSO ABOUT.
THE CONSIDERATIONS ENTER INTO
HOW BIG A FUND WE NEED.
AND I THINK THAT THE REALITY IS
THAT THE RISK MODELING IS
UNCERTAIN.
AND WE HAVE THERE ARE VARIOUS
ESTIMATES THAT ARE OUT THERE IN
THE IN THE DISCUSSION AROUND HOW
BIG A FINE SHOULD BE I I DON'T
REALLY NEED TO GET INTO THAT
HERE BUT I CAN SPEAK TO THE THE
FACTORS THAT MATTER IF YOU LIKE --
I WANT TO ADDRESS IN SOME DETAIL.
AN ALTERNATIVE SUGGESTION A
SMALLER FUND THAT WE ALSO
CONSIDERED AND THINK MAY HAVE
SOME MERIT -- THIS IS TERMS IN
THE DISCUSSION IN THE BUILDING A
LIQUIDITY FUND -- AND I THINK IN
CONTRAST TO THE SORT OF
INSURANCE POLICY MODEL THE RIGHT
WAY TO THINK ABOUT A LIQUIDITY
FIND CONCEPTUALLY.
THIS IS SORT OF LIKE A BRIDGE
LOAN. FOR UTILITIES AND THE GOAL
HERE WOULD BE TO PROVIDE MONEY
TO THE UTILITIES AS SOON AS IT'S
NEEDED TO PAY VICTIMS AFTER A
BIG FIRE -- BUT TEND TO REQUIRE
REPAYMENT OF THAT MONEY AT THE
POINT WHERE A COST RECOVERY
APPLICATION OCCURS.
ANY IDEA.
IN CONTRAST TO SORT OF THE
SOLVENCY CREATING STABILITY --
LONG TERM STABILITY GOAL OF THE
THE VICTIMS FIND.
THE GLOBAL EQUITY FIND IS TO
PREVENT INVESTOR PANIC FROM
GETTING OUT OF CONTROL AND
LEADING TO A BANKRUPTCY AND
CERTAINLY THERE WAS A BIT OF A
PANIC -- PRIOR TO THE P. JEANNIE
FILING P. JEANNIE WAS
ESSENTIALLY ISOLATED FROM ALL OF
ITS ACCESS TO CAPITAL BY ANY
MEANS.
AND FACED A CASH SQUEEZE AS ITS
CREDITORS WERE ASKING FOR
PAYMENT.
PAYMENT OF OF LIABILITIES THAT
MIGHT COME DUE AT THE END OF THE
MONTH.
SO A LIQUIDITY FINE WOULD
ADDRESS THAT PROBLEM.
AND WOULD HELP -- IN THE
AFTERMATH OF A FIRE TO PREVENT
KIND OF A INVESTOR ANXIETY FROM
SPINNING OUT OF CONTROL -- IT
WOULD NOT PREVENT A BANKRUPTCY
IF THE LIABILITIES ARE IN FACT.
FROM FIRE ARE IN FACT A BIGGER
THAN THE ASSETS OF THE COMPANY
RIGHT SO IT'LL PREVENT PANIC
FROM GETTING OUT OF CONTROL IT
WILL NOT PREVENT THE CALM AND
REASONED INVESTOR WHO SORT OF
WAYS THE ASSETS AND LIABILITIES
AND LOOKS AT THE MAN SAYS THESE
WILDFIRE LIFE IS ARE. TOO BIG.
FROM WALKING AWAY FROM OUR
UTILITIES.
SO THAT'S THE I THINK THE
CONTRAST -- THE BENEFIT OF A
LIQUIDITY FUND IS A COULD BE
SMALLER.
RIGHT IT COULD BE SUBSTANTIALLY
SMALLER THAN IS -- WOULD BE
REQUIRED TO ACTUALLY PAY LAIMS
AS AN INSURANCE POLICY WOULD DO.
WE MAKE A ESSENTIALLY. TWO KINDS
OF COST RECOVERY RECOMMENDATIONS
ENSURE PETERMAN MENTION THEM I'M
JUST GONNA FOR FRAME THEM
BRIEFLY IN THE CONTEXT OF THIS
FUND DISCUSSION -- WE MENTIONED
SOME SMALL WHAT WE THINK OF A
SMALLER MODIFICATIONS IS OURS
FIRST AND SECOND COST RECOVERY
RECOMMENDATIONS THE BURDEN SHIFT --
TO A FOR MORE FOR LIKE STANDARD
STANDARD OR AN OF EMPHASIS THAT.
THE LEGISLATURE THE GOVERNOR
COULD PLACE ON VARIOUS THOSE IN
SB NINE A ONE COST RECOVERY
FACTORS THAT IMPLICATE.
THE CONTRIBUTION OF OTHER ACTORS.
IN YES A SORT OF A LOT MAKING AN
EXPLICIT -- REQUIREMENT TO TO
EVALUATE THE THE CONTRIBUTION OF
OTHER ACTORS TO THE SEVERITY OF
A WILDFIRE THOSE ARE.
TWO MORE MODEST MODIFICATIONS TO
COST RECOVERY.
WE THINK THOSE ARE APPROPRIATE
IF THE UTILITIES ARE UNWILLING
OR UNABLE TO COME TO THE TABLE
WITH SIX SUBSTANTIAL
CONTRIBUTIONS TO SOLVING THIS
PROBLEM.
IF ON THE OTHER HAND IF THEY CAN.
FIND A WAY.
TO TRULY PARTICIPATE IN -- IN
THE SHARED SACRIFICE THAT WILL
BE NECESSARY IN THAT -- TO TO TO
STABILIZING THE SITUATION -- WE
THINK THAT LARGER --
MODIFICATIONS COST RECOVERY
MIGHT BE JUSTIFIED ONE
ALTERNATIVE WOULD BE SORT OF A
PERMANENT STRESS TESTS SO -- AN
APPLICATION OF THE NINE A ONE
STRESS TEST WHICH ARE INVESTORS
ARE BECOMING MORE FAMILIAR WITH
AS THE PROCESS PLAYS OUT AT THE
PC -- TO ON ON ON AN ONGOING
BASIS MAKE THEIR PROS AND CONS
TO THAT APPROACH -- ANOTHER
ALTERNATIVE WOULD BE TO SIMPLY
REQUIRE THAT IF THERE IS A FIRE --
AND THE UTILITY IS RESPONSIBLE --
OR IS IT FALLS I SHOULD SAY.
THAT THE UTILITY SHOULD GIVE
UPPER PERCENTAGE OF ITS MARKET
CAPITALIZATION PRIOR TO DON THE
DAY BEFORE THE FIRE RIGHTS OF
THE CHILES WERE TEN BILLION
DOLLARS.
THE DAY BEFORE FIRE IT CAUSES A
FIRE DUE TO IMPRUDENCE OR
NEGLIGENCE.
H. WHAT HAPPENS SAVE HAVE TO PAY
20% OF ITS MARKET CAP TWO
BILLION DOLLARS AND THAT'S IT
THEN THE FUND WOULD PICK UP THE
REST.
THESE KINDS OF LARGE CHANGES TO
COST RECOVERY ONLY MAKES SENSE
IF THE STATE HAS CREATED THIS
LARGE INSURANCE POLICY IN
BETWEEN.
WILDFIRE LIABILITY AND RATE
PAYERS.
RIGHT WITHOUT THAT BIG CHANGES
TO COST RECOVERY MEANS THAT RATE
PAYERS ARE MORE LIKELY TO PAY
COSTS.
I WOULD JUST ADD AND AND SECOND
AND EXTEND ON AND AND SECOND
SOMETHING THAT -- CHAIR PETERMAN
SAID -- IN HER REMARKS WHICH IS
THAT WE ALSO EMPHASIZE.
FINES FANTASY PC ENFORCEMENT
AUTHORITY IS IMPORTANT I THINK
TO THE DEGREE THAT WE ARE
OFFERING ASSISTANCE TO THE
UTILITIES WE SHOULD EMPHASIZE
THOSE ISUES AND PERHAPS ALSO
CONSIDER HOW TO MAKE MANAGEMENT
OF I'LL USE MORE ACCOUNTABLE. TO
DISTINGUISH BETWEEN SHAREHOLDERS
AND THE MANAGEMENT OF THE
UTILITIES.
AND AS WE ARE EXTENDING HELP WE
CAN ALSO ASK FOR VARIOUS THINGS
IN RETURN -- AND BE HAPPY TO
RESPOND TO QUESTIONS ON THAT IF
YOU'RE INTERESTED.
THANK YOU VERY MUCH. FOR PRESS I
WANT TO THANK YOU FOR THE FOURTH.
IN SOME INTERESTING CHALLENGES
I'D LIKE.
TO EMPHASIZE THAT WAS GOING TO
TRY TO BRING THIS UP AT THE END
BECAUSE I DON'T THINK WE'VE
TALKED ABOUT IT.
QUITE ENOUGH IN THIS HEARING SO
FAR.
YOU TALKED ABOUT WHILE FIRE
MITIGATION.
AND FUEL LOAD AND FUEL
MANAGEMENT.
CANDIDLY OVER DECADES AND I'VE
BEENENGAGED IN THIS FOR DECADES.
PART OF OUR PROBLEM IN
CALIFORNIA HAS BEEN IN THE
TENSION.
OR PURPOSEFUL NEGLECT OF FORCED
IN WILD LANDS.
MANAGING.
RATHER THAN LEAVE ME ALONE AND
THAT'S BEEN OF STATE.
LOCAL.
AND FEDERAL [inaudible]
FORMS.
A LOT OF IT'S BEEN DONE
STATUTORY AND REGULATORY.
BUT IT IS DE TOURED [inaudible]
THE OR DISMANTLED IF YOU WILL
SOME OF THE INFRASTRUCTURE THAT
WE HAVE USED. TO REMOVE FUEL.
CO GENERATION FACILITIES
[inaudible]
MALES.
RIGHT NOW THE PARADISE WE'RE
PILING UP LOGS BECAUSE WE DON'T
HAVE A PLACE TO TAKE A THAT'S
GOT TO BE A PART OF THE FUTURE.
AND PART OF THAT FUTURE HAS GOT
TO BE THE REGULATORY SCHEME.
THE STATE.
AND LOCAL LEVEL [inaudible]
I ALSO.
LIKE YOUR IDEA.
AND THIS IS.
KIND OF UNHEARD OF AROUND HERE.
IF YOU TALK ABOUT THIS
[inaudible]
LIQUIDITY [inaudible]
FUN.
BUT WHAT YOU SAID.
WAS IT SHOULD NOT BE.
AN INFINITY.
MOST THINGS WE CREATE
LEGISLATIVELY OR FOREVER YOU
NEVER GET RID OF I LOVE YOUR
POINT ABOUT THE OFF RAMP.
THAT SOMETHING WILL HAVE A
PROSPECT OF TERMINATION.
THAT'S A VERY SIGNIFICANT
DEPARTURE FROM WHERE WE'VE BEEN.
BUT I THINK INCORPORATING THAT
INTO SOME OF OUR DIALOGUE AND
MAYBE END OF TERMS OF POLICY.
MIGHT BE VERY HELPFUL.
COULD YOU EXPAND -- JUST A
MOMENT THEN ON WHERE YOU WOULD
SEE CALIFORNIA GOING NEXT.
IN TERMS OF CREATING THE
INFRASTRUCTURE FOR MANAGING THE
FEELS ON THE FORCE.
AND THE WILD LANDS.
YES SO ON THE ON THE ON THE ON
THAT WHAT I WOULD CALL THE
MITIGATION A RISK REDUCTION SIDE
RESIDES I THINK THE I WOULD
ARGUE THAT.
THERE ARE SORT OF THREE MAJOR
COMPONENTS ONE IS.
OUR FUELS MANAGEMENT IN WILD
ONCE IN TRUE WILD LANDS.
AND DAD YOU KNOW THERE ARE
CERTAINLY FIRES THAT START IN IN --
TRULY.
IN A WHILE LET AREAS AND THEN
BURN INTO COMMUNITIES -- AND
BETTER FUELS MANAGEMENT THERE
REQUIRES GREATER APPLICATION
PRESCRIBED BURNS -- SOME DEGREE
MECHANICAL THINNING -- AND WE
ARE FAR SHORT OF THE GOALS THAT
ARE HAVE BEEN ARTICULATED BY THE
STATE AND CERTAINLY THE FEDERAL
GOVERNMENT IS FAR SHORT OF THEIR
GOALS.
IN TERMS OF TREATMENT OF ACREAGE.
OF WILD LANDS I WOULD ARGUE.
MORE IMPORTANT THAN THAT RIGHT
NOW IF WE HAVE TO PRIORITIZE
THOUGH.
IS.
MANAGEMENT AT THE COMMUNITY
LEVEL FOCUSING ON WHERE PEOPLE
LIVE AND IT'S ESPECIALLY AS WE
CAN'T THINK ABOUT THE INSURANCE
CHALLENGE WHERE THERE IS VALUE
AT RISK -- REDUCING FUEL LOADS
IN COMMUNITIES IS IS CRITICAL.
I HAPPEN TO LIVE IN A IN MARIN
COUNTY -- WHERE YOU KNOW
HISTORICALLY FUEL LOADS -- PRIOR
SETTLEMENT MORE ON THE ORDER OF
TWENTY TONS PER ACRE NOW THEY'RE
ON THE ORDER OF A HUNDRED TWENTY
TIMES BREAKER IN MANY PARTS OF
MARIN COUNTY.
THAT'S A TIME BOMB.
AND IT'S A TIME BOMB WHERE THERE
ARE MANY MANY PEOPLE LIVING WITH
INADEQUATE INGRESS AND EGRESS.
AND THAT'S THE KIND OF THING
THAT NEEDS TO BE ADDRESSED AND
AND IT'S A HUGE PROBLEM.
IT'S NOT JUST COASTAL CALIFORNIA
IT'S ALSO IN THE SIERRA NEVADA.
AND I THINK THAT IS THE SECOND
SILO IN THE THIRD SILOS WE NEED
TO HER.
HARDEN HOMES AND HAVE A WAY TO
HELP LOW INCOME AND FIXED INCOME
RESIDENTS A CALIFORNIA FINANCE
HARDENING OF THEIR HOMES -- IN A
IN A WAY THAT CAN WORK FOR THEM
SO THAT THEY ARE SAFER IN A FIRE.
WELL AT LEAST WE'RE TALKING MORE
ABOUT IT NOW THEN YOU
SPECIFICALLY HAVE AND I WANT TO
THANK YOU FOR THAT.
THE SENTENCE THANK YOU SENATOR
CENTER HERTZBERG.
THANK YOU VERY MUCH I WANT TO
ADDRESS THREE THINGS THAT YOU
TALKED ABOUT.
FIRST THE BANKRUPTCY SECOND
MITIGATION TO FOLLOW ON CENTER
NIELSEN AND THIRD THE BRIDGE
LONG.
OUR JULY EACH ONE OF THOSE
POINTS A LITTLE BIT MORE DEEPLY
IN TERMS OF GIVING US GUIDES OF
HOW WE SHOULD PROCEED.
HE SAID THAT YOU SAW THE
OBVIOUSLY WE KNOW THAT THEIR
SIGNIFICANT CHALLENGES BACK TO
THE CHAPTER PROCEEDING.
THE QUICK AND YOU SAID THEY CAN
BE OVERCOME WERE YOUR WORDS WHAT
SPECIFIC GUIDANCE WOULD YOU
WOULD YOU SUGGEST TO THIS
COMMITTEE THAT WE COULD USE TO
OVERCOME THE CHALLENGES
ASSOCIATED WITH THE BANKRUPTCY
IN TRYING TO PUT TOGETHER.
A SOLUTION IN THE NEAR TERM
WE'VE GOT THE ALL THE REASONS
THATYOU KNOW WELL AND BY THE
WAY LET ME JUST THANK YOU FOR
YOUR EXTRAORDINARY WORK ON THE
STUFF AND HELP IN.
SPAWNING BELIEVE WE REALLY
APPRECIATE IT THANK YOU CENTER
HERTZBERG -- WITH RESPECT TO
BANKRUPTCY I THINK THAT -- WE
ARE SEEING DIFFERENT --
COMMITTEES WITHIN THE BANKRUPTCY
EMERGE WITH SORT OF INTERESTING
IDEAS.
ARE AND THE SENATE -- AND THE
GOVERNOR'S OFFICE -- I THINK
WOULD BENEFIT FROM UNDERSTANDING
THOSE IDEAS VETTING MA'AM.
ARM AND AND IDEALLY.
YOU KNOW IN IN A BANKRUPTCY
PROCESS YOU HAVE COMPETITION
RIGHT YOU SEXUALLY HAVE AN
AUCTION TO CREATE.
THE GREATEST ENTERPRISE VALUE
WITH THE THAT THAT'S POSSIBLE
FROM THE COMPANY SO THAT
EVERYONE WHO'S A CLAIMANT GETS
PAID AS MUCH MONEY AS POSSIBLE.
AND I THINK WE'RE SEEING THAT
SORT OF A PROCESS START TO
EMERGE I THINK JUDGMENT HOLLY.
IS.
ATTENTIVE TO THAT EMERGENCE AND
THE STATE -- CAN DO MUCH TO
ENCOURAGE IT BY SIGNALING ITS
INTEREST AND AND AND AND
SIGNALING THAT IT IS INTEREST
INTERESTED IN HEARING OFFERS.
BUT CAN I JUST DILLON SETTLED
WITH MORE YES YOU KNOW WE HAVE
LIMITED TOOLS WE GET A BUDGET
REQUEST WE CAN WE CAN AND SPEND
MONEY WE CAN DRAFT LEGISLATION
IN ORDER TO SOLVE.
HERE WE ARE IF YOU IN FACT HAVE
A NUMBER OF COMMITTEES OF IDEAS
AND YOU CAN CREATE ENTERPRISE
VALUE ALL OF WHICH ARE FANTASTIC
AND I DO THINK THERE'S
OPPORTUNITIES THERE.
BUT IN YOUR JUDGMENT IF YOU JUST
GIVE US A LITTLE BIT MORE OF
YOUR THINKING ABOUT HOW TO YOU
DRILL INTO THAT HE CAN'T ADOPT A
PARTICULAR PLAN.
CERTAINLY WE WANT AS AS
PROTECTING THE PUBLIC IS
PROTECTING RATE PAYERS AND
TAXPAYERS AND EVERYBODY ELSE.
THE MOST INTELLIGENT PLAN GOING
FORWARD HOW WOULD YOU SUGGEST WE
PROCEED THAT GIVES US THE BEST
BENEFIT.
IN THE INTRIGUE OF HOW
BANKRUPTCY COURTS WORK STILL
BOUND BY WHAT THE RATING
AGENCIES HAVE IMPOSED UPON US.
SO I I YOU KNOW I THINK ONE
APPROACH.
MIGHT BE TO IMPOSE
CONDITIONALITY RIGHT SET OUT
WHAT THE STATE WOULD LIKE MAKE
SURE THAT IT'S VETTED AND
REASONABLE -- AND THEN -- ALLOW
P. JEANNIE THE OPPORTUNITY TO
PARTICIPATE IN A PROGRAM THAT
WILL HELP TO STABILIZE IT.
IF IT SO CHOOSES AND THEN LEAVE
IT TO THE BANKRUPTCY
PARTICIPANTS TO FIGURE OUT HOW
TO ENABLE THAT PARTICIPATION IN
THAT BUT YOU WOULD SEE WITH IF
IT HAPPENED WITH THE HUNDRED AND
EIGHTY DAYS WERE P. G. IN THE
STILL HAD CONTROL OVER IT'S A
IT'S A PLAN.
THAT IF IN FACT WEEK PROVIDE
THAT LEVEL OF GUIDANCE YOU COULD
SEE THAT IN THE P. JEANNIE PLAN
WITH JUDGE MOUNT HOLLY NOW.
YES AND I THINK IF P. JEANNIE --
MANAGEMENT DID NOT COME FORWARD
WITH A PLAN THAT ALLOWED IT TO
PARTICIPATE SOMEBODY ELSE WOULD
A MALE AND JUDGMENT TALLY WOULD
ALLOW THAT PLAN -- TO PROCEED
AND WOOD WOOD WOOD BUT
PREMATURELY AND THE EXCLUSIVE
EXCLUSIVITY PERIOD AND SECONDLY
WITH RESPECT TO MITIGATION YOU
SAID SOMETHING CAUGHT MY
ATTENTION. SIX TO ONE SIX TWO
ONE THE LAST HEARING WE HAD FROM
THE GOVERNOR'S TEAM WE WE SAW
ONE CHART THAT SHOWED VERY
LIMITED IMPACT.
YOU KNOW AYE AYES FEATURE OF
NATURAL RESOURCES AND WON THE
FIRST FEELS LIKE HEARINGS I HELD
WAS CLEARING THE HUNDRED AND
THIRTY MILLION TREES BUT JUSTICE.
CENTER NIELSEN SAYS THERE WASN'T
A LOT OF INTEREST IN THE BUDGET
TIME TO BE ABLE TO SPEND THAT
MONEY.
BUT THE FOCUS IN TERMS OF YOU
ARE IN IN GIVING THE ANSWER TO
CENTER NIELSEN WHICH I THINK WAS
QUITE INSIGHTFUL WAS DIVIDING UP
THE MITIGATION IDEA TO THREE
CONSCIOUS.
PEOPLE MANAGEMENT THE CLEARING
AND ALSO THE HARDENING OF HOMES
AND THE HARDENING OF HOMES AND
CLEARING SPACE THE DISPENSABLE
SPACE I THINK SENATOR GERMAN HAS
A BILL ON THAT.
THOSE TWO THINGS COSTS THE
GREATEST AMOUNT OF BOTH WRIST TO
HUMAN LIFE.
AND PROPERTY DAMAGE TO WHICH
CENTER JACKSON REFERRED SO THE
IDEA WAS SEEMS THAT IN TERMS OF
THE RISK MANAGEMENT THAT THE
HIGHEST AND BEST USE OF THOSE
REST DOLLARS THAT WE HAVE.
GOVERNOR'S ALLOCATING OR WE
MIGHT WANT TO PROPOSE WOULD BE
TO TALK ABOUT HARDENING OF HOMES
INDISPENSABLE SPACE. TO REDUCE
THAT THAT RISK PROFILE AS MUCH
AS WE POSSIBLY COULD IS THAT A
FAIR STATEMENT.
YEAH THAT'S A FAIR STATEMENT
OKAY AND THE MORE WE PUT IN
INTELLIGENTLY OF A SPENT
[inaudible]
X. EXPEDITED AS QUICKLY AS
POSSIBLE WITH ALSO COULD FOLLOW
THAT'S SUPPORT THAT LINE IF
YOU'RE THINKING CORRECT I AGREE
I THINK TIME IS OF THE ESSENCE
OKAY LAST POINT.
WHICH FINANCING YOUR BRIDGE
FINANCING WITH RESPECT TO
LIQUIDITY FUND WHAT I'M
INTERESTED THERE YES IT DOES
GIVE US A SMALLER NUMBER YES IT
GIVES COOLEY QUIDDITY O THE
ENTITIES INTERESTING.
BUT THE MOST PROBATIVE ELEMENT
OF THAT SEEMS TO ME IS WE'LL
THAT INFORMED THE RATING
AGENCIES TO GIVE THEM COMFORT.
EVEN IF TAKE LET'S ASSUME WE DO
THE SIX TO ONE WE COME UP WITH A
LOT OF MONEY IN HARDING LET'S
ASSUME WE DO THESE OTHER THINGS.
IS A LIQUIDITY FUND AS COMPARED
BROADLY SPEAKING TO A LIABILITY
INSURANCE POLICY.
SOMETHING THAT IN YOUR BEST GAS
BECAUSE I KNOW YOU'RE JUST
GUESSING BECAUSE YOU'RE NOT A
RATING AGENCY BUT YOU CERTAINLY
HAVE SPENT A LOT OF TIME ON HERE
AT ALL WE CAN DO IS RELY ON YOUR
JUDGMENT.
IS THAT.
A COURSE THAT WILL RESULT IN THE
RATING AGENCIES.
ARE GIVING US THE CLEARANCE SO
WE DON'T HAVE THESE BIG HIGH
PRICES FOR BARRING THAT RESULTS
IN RATE PAYERS EPENSES GOING UP
BECAUSE THE COST OF CAPITAL SO I
IN MY JUDGMENT.
THE RATINGS AGENCIES AT THIS
POINT GIVEN THAT THEY'VE YOU
INVERSE CONDEMNATION REFORM IS A
LOW PROBABILITY OUTCOME.
ARE MOST INTERESTED IN --
CHANGES TO THE COST RECOVERY
REGIME THAT MAKE IT VERY CERTAIN.
THAT IF THERE IS A SO CALLED
WILDFIRE EXPENSE IT WILL BE
PASSED TO RATE PAYERS -- IF.
THE AND THAT IS WHAT WILL.
INCREASE CERTAINTY FOR INVESTORS
THAT THEY HAVE A LOWER RISK
INVESTMENTS IN A CALIFORNIA
UTILITY WHICH IS WHAT THEY WANT
TO AND FRANKLY WHAT WE WANT
UTILITIES TO BE LOW RISK AS WELL
SO THEY HAVE LOW BORROWING COSTS
AND CAN BUILD INFRASTRUCTURE.
COST EFFECTIVELY.
THE PROBLEM IS.
IN THE CURRENT SITUATION IF WE
WERE -- TO DE RISK UTILITY COST
RECOVERY THAT'S EXPOSING RATE
PAYERS TO POTENTIALLY PUNISHING
EXPENSE.
AND AND SO YOU COULD HAVE A YOU
KNOW THAT THERE THERE ARE THERE
IS PROBABLY A SWEET SPOT IN THE
LIQUIDITY FUNDS WHERE YOU BILL
TO FIND IS LARGE ENOUGH.
YOU GIVE SOME MODEST.
COST RECOVERY REFORMS AND AND
AND AND I THINK YOU KNOW PERHAPS --
YOU COULD BRAIN THE RATING
AGENCIES TO THE TABLE
PARTICULARLY IF THAT WERE PAIRED
WITH YOU KNOW MASSIVE
INVESTMENTS AND MITIGATION RIGHT
SO YOU THINK YOU'RE GONNA HAVE A
SMALLER RISK OF RAW.
I GUESS FROM MY PERSPECTIVE WE
YOU WOULD NEED TO CONSULT WITH
ASSN P. IN MOVIES AND TO TO
REALLY KNOW FOR SURE THAT AT AND
TO CAN I JUST FOLLOW UP ON THAT
JUST.
APOLOGIZE TO DRILL THE THE BILL
A LITTLE IN DEEPER WE TALKED
ABOUT VARIOUS COMMITTEES COMING
FORTH WITH IDEAS AND CREATING
COMPETITION A GREAT ENTERPRISE
VALUE.
IF YOU WERE.
TO SIX A LIQUIDITY FUND VERSUS A
LIABILITY FUND WOULD NOT BE
EASIER AND I COULD BE WRONG I'M
NOT TRYING TO BE LEADING THE NEW
ON THIS I'M JUST TRYING TO
UNDERSTAND IT BY LEADING YOU.
WOULD NOT BE EASIER IF YOU'RE
GOING TO GET EQUITY OUT OF
SHAREHOLDERS OR LENDERS WHO
WHOEVER THEY MIGHT BE WOULDN'T
IT BE EASIER ENOUGH TO GET THAT
MONEY INTO A FUND THAN JUST
BASICALLY A BANK.
WHICH WAS A LOAN FUND WHERE THEY
WOULD ACTUALLY YOU KNOW IN TERMS
OF A FOR ONE OF OUR CHALLENGE
WERE FACING IS YOU KNOW ALL
THESE THINGS WERE JUGGLING RIGHT
WE'RE TRYING TO MINIMIZE THAT
SHOCK STICKER SHOCK TO TO RATE
PAYERS IS REALLY IMPORTANT I
THINK FAIR TO SAY.
THE COMMITTEE REALLY IMPORTANT
THE SAME TIME WE WANT TO SEE IF
WE CAN TAKE ADVANTAGE OF THAT
COMPETITION IN THE IN THE WAY
THAT PROTECTS US IS CALIFORNIA
TAXPAYERS AND RATEPAYERS.
CAN WE DO THAT AND IS THE FUND
THE MODEL A BETTER MODEL TO
CONSTRUCT IN YOUR JUDGMENT THEN
THE BRIDGE FINANCING MODEL.
I THINK THE BRIDGE FINANCING
MODEL IF WE CANNOT.
BRAIN UTILITIES TO THE TABLE --
IF THEY DON'T SEE IT IS IN THEIR
INTEREST TO PARTICIPATE THE
BRIDGE FINANCING MODEL HAS A LOT
GOING FOR IT -- IF WE CAN.
AND THEY ARE WILLING -- TO PUT.
IF THEY'RE WILLING TO YOU KNOW
AND WE WE DON'T SPECIFY NUMBERS
IN OUR REPORT WE THINK OF THIS
IS KIND OF ROUGHLY EQUAL
CONTRIBUTIONS RIGHT.
RATEPAYERS PUT A DOLLAR ON THE
TABLE SHAREHOLDERS ARE PUTTING
IT ON THE TABLE IF THAT KIND OF
ARRANGEMENT AS POSSIBLE -- THEN
THE LARGER FIND -- IS A IS AN
INTRIGUING POSSIBILITY TO
CONSIDER AND WHERE DOES THE
MONEY COME FOR THE BRIDGE
FINANCING MODEL WAS A CABS
REGIONALLY IT WOULD COME FROM
REPAIRS.
BUT IT'S IMPORTANT TO REALIZE
REPAIRS WOULD NOT -- LATELY IT'S
BECAUSE IT'S A REVOLVING LOAN
REPAIRS ARE GONNA GET BACK THE
MONEY WILL GO OUT AND IT'LL COME
BACK IN.
INTERIOR.
YEAH THAT THE PRIMARY RISK THAT
I WORRY ABOUT IN THAT CONTEXT
WOULD BE.
EIGHTY A BRIDGE LOAN TO AN
ENTITY TO GOES BANKRUPT --
THAT'S THAT'S THE RISK I THINK
THEIR WAYS OF MANAGING AT RISK.
SO I THINK OUR GENEROSITY.
REALLY WANTED TO GO IN.
THANK YOU PROFESSOR WHO ARE I I
JUST WANT TO GO OVER A FEW
ASSUMPTIONS VERY BASIC -- THE
FIRST IS THAT -- CALIFORNIA IS
UNIQUE IN THIS PLANET.
THAT ARE WILDFIRES ARE STARTED
BY UTILITIES IT DOESN'T HAPPEN.
I MEAN WE HAVE WILD FIRES ALL
OVER THE GLOBE EUROPE.
FLORIDA.
ARIZONA BUT WE'RE UNIQUE THAT
THERE [inaudible]
UTILITY.
START ARM.
UTILITIES.
IN GENERAL STARFIRE'S IF YOU
STRAIN HIGH VOLTAGE WIRES THAT
ARE UNINSULATED ALL OVER THE
LANDSCAPE AND THERE ARE TREES
AND THERE IS WHETHER.
THOSE WIRES WILL EVENTUALLY FALL
DOWN AND SOMETIMES THEY WILL
START FIRES.
USUALLY THE DIFFERENCE WHAT'S
GOING ON IN CALIFORNIA THAT'S
DIFFERENT IS THAT.
WHEN THOSE FIRE STARTS AT
CERTAIN POINTS IN THE FALL IN
CALIFORNIA?
THERE IS NO WAY TO PUT THEM OUT.
OUR AND THE THE ONLY POSSIBLE
RESPONSE OF FIRST RESPONDERS TO
TRY TO MOVE PEOPLE OUT OF THE
WAY.
THAT'S DIFFERENT.
AND ENGINE THAT HASN'T BEEN THE
EXPERIENCE IN OTHER STATES AT
LEAST SO FAR.
NOW I COME FROM A COUNTY THAT
HAS WID BUYER EXPERIENCE TO ME
LOOK AT AUSTRALIA AND OTHER
MODELS.
BUT I'M JUST TRYING.
TO YOU AS WE FOCUS ON THIS TOPIC
WE'RE JUST TALKING ABOUT
CALIFORNIA THIS UNIQUE PLACE ON
THE PLANET THAT HAS UTILITIES
STARTED FIRES -- SO THAT MEANS
WE HAVE NO MODELS THERE'S NO
OTHER.
MUNICIPALITY ON THE GLOBE THAT'S
GOT A VICTIMS FUND CORRECT --
THERE ARE NO THERE'S NO
EQUIVALENT FOR UTILITY COST
WILDFIRE.
THERE ARE FUNDS THEIR SO CALLED
CATASTROPHE FUNDS THAT A NUMBER
OF STATES IN THE UNITED STATES
OF CREATED THE BEAR SOME
RESEMBLANCE SO IN PARTICULAR.
THE FLORIDA HER KINKY TAX FREE
FUND IS ONE EXAMPLE THERE ARE
MODIFICATIONS OF THE FAIR PLAN
IN OTHER STATES IN THE SOUTHEAST
THAT LOOK A LOT LIKE A
CATASTROPHE FOUNDER OF VICTIMS
FUND -- BUT THEY ARE DIFFERENT
IN THE SENSE THAT THEY PAY.
THEIR DAY ARE IN GENERAL EITHER --
THERE IS THERE IN GENERAL -- A
REINSURER SO THEY THEY BACKED
THE PRIMARY HOME INSURERS RATHER
THAN BACKING THE UTILITIES
AGAINST THIRD PARTY CLAIMS.
THANK YOU THEN I I'LL DO MORE
RESEARCH ON HER CANE.
I'D BE HAPPY TO SHARE SOME
INFORMATION WITH YOU ABOUT THAT
THAT'S REAL HELPFUL AND I
APPRECIATE THAT BECAUSE I'M.
I'M TRYING TO LOOK AT YOUR
COMMENT IT WOULD JUST TAKE
LEADERSHIP.
WE JUST YOU KNOW WE JUST NEED TO
DO THIS AND AND I'M KINDA
LOOKING AT THE CONSTRAINTS FROM
MY LITTLE VANTAGE POINT BUT I'M
LOOKING AT LET'S SAY A BUDGET
WHERE WE GET THE LARGEST BUDGET
WE'VE EVER.
PRODUCED.
WORKING ON THE BUDGET LAST NIGHT
ABOUT TEN PM.
AND I DID SEE ONE DOLLAR GO.
TO ANY FUND FOR FIRE MEDICATION
OR VICTIMS BUT I DIDN'T SEE THE
STATE'S STEP UP WITH ONE DOLLAR
I SAW A LOT OF PORK GOING TO A
LOT OF DISTRICTS IN THIS STATE --
I SAW A DEFERRED MAINTENANCE
FUND REDUCED 50% BECAUSE WE WERE
GIVING SO MUCH MONEY AWAY. TO
OTHER OTHERAREAS AND I'M AND
I'M TRYING TO FIGURE OUT WHERE
IS THE LEADERSHIP GOING TO COME
FROM -- BECAUSE JUST LAST WEEK
WE WE RECEIVED OUR COMPREHENSIVE
ANNUAL FINANCIAL REPORT.
YOU KNOW GETTING IN JUNE A YEAR
LATER AFTER THE YEAR AND ALMOST.
AND WE HAVE THE LARGEST
UNRESTRICTED NET DEFICIT OUR
STATE'S HISTORY IT'S NOW 200-13
BILLION FOR A GOVERNMENTAL
ACTIVITIES AND WE'RE TALKING
REPAIRS WERE TALKING TAXPAYERS
THEIR THEIR STOCK CAN MEAN WE'RE
TALKING OVER UTILITIES REALLY
GOVERNMENT AND JUST.
YOU KNOW SEGREGATED FORM AND AND
SO I'M I'M TRYING [inaudible]
TO FIGURE OUT.
HOW TO FIX THIS BECAUSE OUR
ELECTRICITY RATES ARE REALLY
REALLY HIGH?
P. GENIES RATES ARE WELL ABOVE
THE NATIONAL AND AND STATE RATES
AND AS WE HAVE INDUSTRY THAT'S
NOT GONNA DO WELL IF WE RAISE
THEIR RATES.
ASKING THEM TO OKAY YOU BE A
LEADER IN THEIR KIND OF GOING
WELL MAYBE WILL LEAD SOMEWHERE
ELSE BECAUSE WE CAN MANUFACTURE.
SO I'M LOOKING AT ALL THESE
CONSTRAINTS IN A BAD BALANCE
SHEET HI RATES NO WILLINGNESS TO
SET BONTA SIDE IN THIS BUDGET TO
REALLY.
SHOW SOME RESOLVE [inaudible]
SO.
I'M KIND OF DUMPING IT ON YOU
I'M KIND OF COMPLAINING BUT I'M
TRYING THIS BABY PLEADING LIKE
OKAY WHERE.
WHERE'S THE MOVEMENT GOING TO BE.
WELL I I DON'T.
HAVE A CLEAR ANSWER THEIR CENTER
MORE LUCK BUT I WOULD SAY THAT.
ANY POLICY PROPOSAL.
SHOULD GO THROUGH AN ANALYSIS
WORRIED IT IS SHOWN.
THAT THE FUND OR WHATEVER WE
ENACT -- IS BETTER FOR
RATEPAYERS.
THAN THE STATUS QUO.
RIGHT AT YOU KNOW WE NEED TO
THERE THERE NEEDS TO BE A
SHOWING.
AND THE STATUS QUO IS GRAHAM YOU
KNOW I MENTIONED ACOSTA CAPITAL
REQUESTS.
I HAD THE OTHER ISSUES ARE WHAT
HAPPENS WITH ABOUT WHILE FAR
LIABILITIES WHAT HAPPENS YOU
KNOW THE COST OF GREAT HARDENING
ARE NONTRIVIAL.
THEY'RE GONNA HAPPEN OVER THE
NEXT DECADE SO.
RATES ARE UNFORTUNATELY GOING UP.
AND THE QUESTION IS CAN A
WELFARE FUNDS.
STABILIZE THAT SITUATION MAKE
THINGS LESS BAD THAN THEY WOULD
HAVE BEEN -- AND AND AND HELP --
TO TO INSURE BOTH SAID REPAIRS
DON'T GET SURPRISED WITH THE
BILL SO THEY CAN PLAN AND ALSO
THAT VICTIMS GET PAID.
THANK YOU PROFESSOR THANK YOU
MISTER.
THANK YOU MISTER CHAIRMAN THANK
YOU PROFESSOR FOR ALL THE TIME
YOU SPENT ON THIS IT'S IT'S
PHENOMENAL MUCH APPRECIATED.
OF YOU MENTION WE TALK ABOUT THE
THE CREATION AND THE
ESTABLISHMENT FUND THAT THERE
WOULD BE.
NO OF RATE PAYERS IN THE
UTILITIES AND OTHER ACTORS WHO
THOSE OTHER ACTORS THAT WOULD
PARTICIPATE IN THAT THAT YOU SEE.
IN THE INNER REPORT.
WE SUGGESTS THAT THE LEGISLATURE
SHOULD AT LEAST CONSIDER THE
IDEA OF A SURCHARGE AND
INSURANCE RATES -- ELECTRICITY
RATES IN CALIFORNIA ARE AMONG
THE HIGHEST.
IN THE NATION OUR BILLS ARE MORE
UNDER CONTROL BECAUSE OF OUR
VERY AGGRESSIVE ENERGY
EFFICIENCY POLICIES.
ARE BY THE THE ON OUR HOME
INTEREST RATES ARE ACTUALLY --
ON THE VERY LOW AND I THINK
WE'RE FORTY SECONDS -- BEFORE
YOU EVEN ADJUST FOR INCOME AND
VALUE IN SHIRT WHICH OBVIOUSLY.
VERY DIFFERENT CALIFORNIA AND IN
MANY PLACES NOW OF COURSE.
IN THE WILL BE IN THE HIGH RISK
AREAS LIKE WHERE SENATOR JACKSON
LIVES.
OUT WHERE I LIVE -- I AND NUMBER
OF MY NEIGHBORS HAVE RECENTLY
GONE TO LLOYDS OF LONDON TO GET
THEIR POLICIES -- THEY THE COSTS
ARE MUCH HIGHER -- THE IDEA OF A
SURCHARGE AN INSURANCE RACES IS
ONE THAT WE SUGGEST WHAT WE
THINK -- YOU KNOW CONCEPTUALLY
IT MAKES SENSE THERE ARE GOING
TO BE SOME LEGAL CHALLENGES THAT
NEED TO BE OVERCOME IF THAT'S A
POLICY APPROACH IT'S TAKEN --
ESPECIALLY IN TERMS OF MANAGING
PROPOSITION TWENTY SIX
REQUIREMENTS.
OTHER ONE IS YOU KNOW WE'RE
TALKING ABOUT.
REPAIR RESPONSIBILITY IN SOME IS
PART OF THE FUND AND THEN
ELSEWHERE WHERE DO YOU SEE AND
WHERE DOES THE THE THE COMMITTEE
LOOK AT THE YOU KNOW WE SEE THAT
YOU KNOW YOU HAVE THE FUND AND
THEN.
UTILITIES WILL CONTRIBUTE
PERHAPS INSURANCE SURCHARGE ALL
OF THESE OF THE WHERE DO YOU SEE
THE RATE PAYERS ROLE IN THIS IN
TERMS OF ANOTHER PART OF THAT
WITH.
YOU KNOW THEIR RESPONSIBILITY
AND I UNDERSTAND THAT IT'S
IMPORTANT TO HAVE THEIR PRESENCE
BECAUSE OF THE THERE'S A COST
THERE REGARDLESS WHEN WE TO LOOK
AT THE THE COST OF BORROWING
MONEY AND AND AND ELSEWHERE SO
WHERE DO YOU SEE THE RATE PAYERS.
PART IN THIS IN TERMS OF THEIR
RESPONSIBILITY -- WITH A
LIABILITY WITHOUT LIABILITY IS
IT BECAUSE OF THAT.
THE FACT THAT IF YOU HAVE -- HE
WITH INVERSE IF.
AS I LOOK AT IT IF THERE'S NO
NEGLIGENCE NO LIABILITY ON THE
PART OF THE UTILITY WE WE SHOULD
SOCIALIZED ACOSTA BE I THINK
THAT EVERYONE SHOULD BE
RESPONSIBLE IS THAT WHERE YOU'RE
SEEN THAT ROLE FOR THE REPAIRS
IN THAT FUND IN THOSE OR
CIRCUMSTANCES WHERE.
THERE IS CHAIRED LIABILITY.
WELL I THINK ON THE ROLE FOR
RATE THE APPROPRIATE ROLE FOR
RATEPAYERS.
IS -- TO PAY COSTS WHEN THERE IS
NO FAULT ON THE PART OF THE
UTILITY IN A GIVEN THE INVERSE
CONDEMNATION FRAMEWORK THAT WE
HAVE -- BUT I THINK THAT THE
REALITY AND AND AND AND SPEAKING
SORT OF AS A STUDENT OF ENERGY
REGULATION IN THE UNITED STATES
THE REALITY IS THAT WHEN.
MASSIVE LIFE UNEXPECTED
LIABILITIES OCCUR IN THE POWER
SECTOR IN REGULATED INDUSTRIES
RIGHT.
IF YOU LOOK BACK THROUGH HISTORY
AT THE NUCLEAR POWER PLANT
DISALLOWANCE IS THAT OCCURRED IN
THE NINETEEN EIGHTIES FOR
EXAMPLE -- WE SEE YOU KNOW ACTOR
FOR RECENT NUCLEAR POWER PLANT
DISALLOWANCE IS THAT HAVE
OCCURRED IN SOUTH CAROLINA.
WHAT WE SEE IS A HISTORY OF
SHARED SACRIFICE RIGHT EVERYONE
IS EVERYONE IS FORCED TO
CONTRIBUTE THE SHAREHOLDERS ARE
FORCED TO CONTRIBUTE?
THE RATE PAYERS ARE FORCED TO
CONTRIBUTE BECAUSE WE ALL THAT
THE SHAREHOLDERS NEED A STABLE
BUSINESS.
THE RATE PAYERS NEED PROVISION
OF AN ESSENTIAL SERVICE.
AND USUALLY IN THE REGULAR ORDER
OF BUSINESS THAT CAN BE HANDLED
AT THE P. YOU SEE.
THROUGH A PROCESS OF REGULATION
APPLICATION OF THE PRUDENT
MANAGER STANDARD BUT THEN THERE
ARE EXTRAORDINARY TIMES WHEN.
IT IS SORT OF HIS ABOVE THE P.
UC'S PAY GRADE FRANKLY AND THE
LEGISLATURE.
LOOKS AT THE AUTHORITY IT HASN'T
HIT DELEGATES TO THE PC NORMALLY
IN AND HAS TO MAKE THAT CALL.
ABOUT HOW TO ALLOCATE
RESPONSIBILITY FOR GETTING OUT
OF A WHOLE.
ARM AND I GUESS MY VIEW WOULD BE
THAT EVERYONE SHOULD CONTRIBUTE.
THAT WE NEED TO ENSURE THAT AS
WE ARE MAKING THESE SHARED
CONTRIBUTIONS THE UTILITIES ARE
SETTING THEIR HOUSE IN ORDER.
SO THAT THIS DOESN'T HAPPEN
AGAIN.
AND WE NEED TO HOLD THE TELLY
MANAGEMENT ACCOUNTABLE AND SURE
THAT METRICS ARE IN PLACE TO SEE
THAT APPROPRIATE PERFORMANCE
GOALS ARE SAT.
AND DELIVERED ON IN A TIMELY WAY.
AND WITH WITH THOSE
PRECONDITIONS.
I THINK IT'S APPROPRIATE THAT WE
ALL CONTRIBUTE TO STATE BECAUSE
WE ALL BENEFIT WHEN THE POWER
SYSTEM WORKS WELL.
THANK YOU [inaudible]
WHO ARE?
I THINK SO MUCH IS THE CHAIR
SCRIPTURE THANKS FOR ALL YOUR
WORK SIR AT YOU HAVE BEEN LIVING
THE DREAM FOR THE PAST MANY MANY
MIND SO -- VERY GRATEFUL.
THAT THE PUBLIC TWITTER YEAH I'D
LIKE TO BE TO DRILL DOWN A
LITTLE FURTHER ON ALL ISSUES OF
MITIGATION.
AND YOU'VE BEEN SAYING TIME AND
TIME AGAIN THAT WE ARE UNDER
FUNDED.
WHETHER IT'S UNDER FUNDING WHEN
IT COMES OF VEGETATION
MANAGEMENT UNDER FIND WHEN IT
COMES TO HOME HARDENING.
SOME -- RESPONSES CAME BACK UP
WE'RE ASKING FOLKS WHO LOST
THEIR HOME.
LOST THEIR HOME AND THEY HAD --
MORE AGGRESSIVE HOME PARTIES IN
IS IN AND THEN SOME NEIGHBORS
DID -- BACK IN THE EIGHTIES.
I AND NOW WE'RE GONNA ASSN TO BE
ABLE TO REBUILD.
POTENTIALLY WITH.
HIGHER STANDARDS AGAIN.
HOW DO YOU SEE THIS PLANE NOW?
ARMED WITH THOSE FOLKS WHO MAY
NOT BE ABLE TO AFFORD -- AND
THEN THE OTHER PIECES -- HOW DO
YOU SEE THIS PLAYING OUT?
RELATED TO FOLKS WHO HAVEN'T
BEEN HIT BY FIRE BUT CAN'T GET
INSURANCE.
SO.
I I GUESS.
THE LET ME RESPOND TO THE
QUESTIONS IN TURN.
THE CHALLENGE FOR FOLKS IN
CALIFORNIA THAT ARE LIVING IN
COMMUNITIES YOU KNOW THAT HAVE
BEEN HIT BY FIRE OR HAVEN'T BEEN
HIT BY FIRE YET.
BUT WANT TO DO THE RIGHT THING
BUT LIVE IN OLDER HOUSING STOCK.
IS ENORMOUS YEAH AND I THINK THE
STATE HAS A ROLE TO PLAY NOT
NECESSARILY IN PAIN.
FOR THE THE IMPROVEMENTS THAT
NEED TO BE MADE BUT IT AT LEAST
PERHAPS IN FINANCING AND
ASSISTING.
THOSE -- HOMEOWNERS TO TO AFFORD
THE KINDS OF INVESTMENTS AND AND
THE INVESTMENTS ARE NOT MASSIVE
REYES.
TO ASPHALT ROOF.
COVERED EVE'S IT OUT BETTER
VANCE IN A MASH IN IN THE VANCE --
AND AND THEN CREATION OF
SENSIBLE SPACE.
BUT MANY PEOPLE.
CAN'T AFFORD EVEN THAT.
AND SO THERE IS A ROLE AND I
THINK FOR STATE ASSISTANCE THERE --
THE ON THE INSURANCE QUESTION.
YEAH I I THINK THERE ARE NOT
SIMPLE ANSWERS HERE OTHER THAN
THE KIND OF VERY LARGE PROGRAM.
THAT.
BOB WE'VE DISCUSSED UP THE
INSURANCE SITUATION IN
CALIFORNIA IS WHAT WE DESCRIBE
IN THE REPORT AS FRAGILE -- IT'S
DIFFICULT TO GET GOOD
INFORMATION ABOUT WHAT IS GOING
ON SO MUCH OF THE INFORMATION
ABOUT NON RENEWALS AT THIS POINT
IS REALLY ANECDOTAL -- BUT
CONCERNING VERY CONCERNING
[inaudible]
AND THE THE BIG QUESTION THAT I
HAVE IS HOW.
YOU KNOW I MENTIONED --
REINSURANCE AS AN ISSUE THE THE
ABILITY OF CALIFORNIA.
SURE IT'S RISK.
OUTSIDE THE BORDERS IS VERY
IMPORTANT FOR MAKING INSURANCE
AFFORDABLE WITHIN THE BORDERS OF
THE STATE.
AND THE FOLKS YOU KNOW IN
BERMUDA.
REALLY THAT OFFER US COVERAGE
FOR WILDFIRE.
ARE GETTING VERY NERVOUS.
AND I WORRY THAT.
WE WILL FIND A HARDENING OF THAT
MARKET LEADING TO A HARDENING OF
THE HOME INTEREST MARKET WITHIN
THE STATE.
AND IT THIS WILL SPREAD BY
BEYOND -- THERE ARE.
IT DEPENDS ON HOW YOU COUNT THEM
BUT THERE ARE ABOUT A MILLION
HOMES IN CALIFORNIA OUT OF
TWELVE MILLION.
THAT ARE AND SEVERE.
HAZARD ZONES THERE ABOUT THREE
AND A HALF MILLION IN THE WE WE
GENERALLY.
THAT'S A LOT OF HOUSING STOCK.
THE COULD FACE A REAL CRISIS IN
TERMS OF ABILITY TO NOT DEFAULT
ON A MORTGAGE OR ABILITY TO SELL.
IF -- TO A NEW BUYER WHO WOULD
HAVE TO ACQUIRE INSURANCE THEY
ACTUALLY RIGHT I THINK THAT IN
YOU'D MENTIONED RAIN COUNTY
BRING COUNTY YOU'RE SEEN ENTIRE
SWATHS OF CITIES.
AT HOMEOWNERS WHO ARE AN
INCORPORATED CITY.
OUR CHALLENGE TO BE ABLE TO
PURCHASE TRADITIONAL LAKE COUNTY
IS A WHOLE NOTHER UNIVERSE WHERE --
ENTIRE COMMUNITIES.
I THINK THE OTHER CHALLENGE THAT
WE HAVE IS THERE IS.
ISN'T A GRACE ABILITY TO COLLECT
THE DATA TO BE ABLE TO SEE THE
HARD NUMBERS OF THOSE WHO ARE
BEING NON RENEWED.
I AND I KNOW WE NEED TO TREAD
LIGHTLY ON THAT BASE OF A
PROPOSITION BUT SIMPLY BEING
ABLE TO SEE -- PERCENTAGES I
KNOW THAT SOME THAT WE'RE
LOOKING AT OF BASED OFF THE ZIP
CODE.
OF WHO IS RECEIVING NUMBER NO
ONE KNOWS I THINK IT'S GONNA BE
IMPORTANT SO THAT WERE ABLE TO
SEE REALLY WHAT THAT LIABILITY
IS.
I AUTHORS ANY DISCUSSION ABOUT
THAT BECAUSE IT'S IT'S HARD TO
BE TO GET THE ACTUAL HARD DATA I
COMPLETELY AGREE AND THAT'S ONE
OF THE REASONS THAT WE SUGGEST
THE NUMBER OF DATA CALLS.
ARE FROM THE CALIFORNIA
APARTMENT INSURANCE AND
INSURANCE CHAPTER OF OUR REPORT.
THANK YOU SO MUCH THANK YOU.
IT SEEMS TO ME THAT THE VICTIMS
WEALTH FIRE VICTIMS FUND IS
SUPERIOR TO LIQUIDITY.
FIVE BECAUSE ONE OF THE REASONS
OBVIOUSLY HAVE AN INTEREST IN.
HELPING FOR ASSISTING P. GENIE
TO HELP ITSELF EMERGE FROM
BANKRUPTCY IN YOUR AND WE'RE
TRYING TO IMPROVE.
SOLVENCY OF ALL OF ALL --
UTILITIES IN IN THE WAY WE DO
THAT IS WE TRY.
TO REDUCE THE LOOK OR MINIMIZE
THE THE LIABILITIES IN ORDER TO
INVEST WERE.
ATTRACT CAPITAL IN THE
BANKRUPTCY THAT WILL ALLOW.
A PLAN THAT WILL ASK FOR NEW
MONEY TO COME IN AND THAT MONEY
IS NOT GONNA COME IN UNLESS WE
DO SOMETHING ON THE MITIGATION
HARDENING AND ALL THAT BUT ALSO
LIMIT THE CAPITAL BECAUSE THERE
ARE FORTY NINE OTHER STATES THAT.
THAT CAPITAL FUNDS CAN PUT THEIR
MONEY INTO AND GET THEIR 10%.
RETURN ON INVESTMENT -- IT SO IF
WE DON'T TAKE CARE OF THAT PIECE
IT SEEMS LIKE.
OUR WERE JUST -- INVITING THESE
ARE THE UTILITIES. TWO YOU KNOW
THE FAULT OR ENTER INTO
BANKRUPTCY TO DEAL WITH THIS
UNCERTAINTY ON THE ON THE
LIABILITY PIECE IN MY GETTING
THIS WRONG [inaudible]
WELL -- THE THING TO REMEMBER.
IS THAT WHILE A LARGER FIND.
WELL CREATE A YOU KNOW ON AN
INSURANCE POLICY AS OPPOSED --
TO A BRIDGE LOAN IT'S A LOT MORE
EXPENSIVE.
BOB AND IF NOTHING IS FREE IN
THIS CONVERSATION.
SO -- YES I THINK IT WOULD
CREATE GREATER CERTAINTY BUT AT
A GREATER COST.
AND THE QUESTION IS -- YOU KNOW
IS IS IS IS IS IT IN THE
INTERESTS OF THE STATE GIVEN
THAT COST TO CREATE.
A FIND OF THE SCALE THAT WE'RE
TALKING ABOUT SUFFICIENT TO
MANAGE THIS RISK. TO GET TO A
HEART INTEGRATED -- AND I THINK
THE ANSWER DEPENDS ON IT DEPENDS
ESPECIALLY ON WHO IS PAYING THAT
LARGER COST.
RIGHT I MEAN A CERTAIN CERTAINLY
THE CALIFORNIA CALIFORNIA HAS A
PORTION OF IT BUT WE'RE TALKING
ABOUT P. JEANNIE VOLUNTARILY --
CONTRIBUTING TO THE TO THE FUN
EN EN THE ONLY WAY THEY'RE GOING
TO DO THAT IS A YEAR IF THEY
ATTRACT THE CAPITAL MARKETS IF
THEY LOOK AND THEY SAY WE WANT
TO PLAY BALL WITH CALIFORNIA NOW
BECAUSE THEY'VE DONE.
ALL THESE RECOMMENDATIONS THAT
YOU COME IN WELL THAT'S IT IT'S
A VOLUNTARY ACTION BY PEACHY
NEED THE SIGNALS TO THE CAPITAL
MARKET IS THAT IS THAT WE'RE
GOING TO PUT.
A CAP ON DAMAGES LET'S JUST SAY
WHAT IT IS THERE'S GONNA BE IT
HOWEVER WE SLICE OF THIS PIE
WE'RE GOING TO PUT A CAP ON
DAMAGES AND THEY SAY OKAY.
MY MONEY IS WORTH AS MUCH IN
CALIFORNIA AS IT IS IN TEXAS OR
IN RHODE ISLAND WHEREVER ELSE
THE CAPITAL MARKETS INVEST
INVESTORS AND THEN THE THE THE
DEBTOR IN POSSESSION AT LEAST IN
THE P. GENIE IS GOING TO SAY WE
WANT.
TO WE WANT TO EMERGE FROM
BANKRUPTCY WE WE HAVE THE
CERTAINTY NOW THE CALIFORNIA HAS.
PRESCRIBED FOR US WITH THIS THIS
PLAN THAT WE CAN ASK THE CAPITAL
MARKETS PUT MORE VALUE INTO THE
THE NEW DEBTOR AND WILL EMERGE
AND THEN WE WILL.
VOLUNTARILY PARTICIPATING YOU'RE
OUT WILDFIRE FITNESS OF I DON'T
SEE HOW ANY OTHER WAY TO DO IT.
IT IS HARD TO SEE A SUSTAINABLE.
SO.
THE CAPITAL MARKETS HAVE
CONCLUDED THAT THE CAPITAL
MARKETS AGREE WITH YOU SENATOR
CASKEY THEY DO NOT SEE RIGHT NOW
SUSTAINABLE BUSINESS MODEL.
BOB IN THE UTILITY SPACE IN
CALIFORNIA BECAUSE OF WHAT THEY
PERCEIVE AS I'M ON LIMITED
DOWNSIDE RISK.
AND DID THAT THERE COULD THEY
COULD WAKE UP YOU COULD INVEST
TEN DOLLARS IN CALIFORNIA YOU
COULD WAKE UP ON SUNDAY IN
SEPTEMBER AND FIND THAT THAT TEN
DOLLARS IS WORTH ONE DOLLAR --
SO.
WE NEED TO CHANGE THAT
PERCEPTION.
AT THE MINIMUM COST TO RATE
PAYERS AND TO VICTIMS.
AND I THINK THE UTILITIES AND
THEIR SHAREHOLDERS AND THEIR
BOND HOLDERS HAVE AN ENORMOUS
INTEREST IN SEEING THAT PROBLEM
SOLVED AS WELL.
AND WE SHOULD ALL CONTRIBUTE TO
A SOLUTION.
I THINK ARE INVERSE CONDEMNATION
IS WAS A LOVELY CONCEPT IN THE
NINETEENTH CENTURY WHEN WE
THOUGHT THAT SPREADING THE RISK
AROUND MEANT PUTTING IT ON TO
THE THE RATE PAYERS.
WE'RE NOW IN THE TWENTY FIRST
CENTURY AND WE HAVE EMINENT
DOMAIN WE HAVE EASEMENTS AND WE
HAVE.
INVERSE CONDEMNATION VAN THAT WE
ALL LEARNED IN IN LAW SCHOOL BUT
THE CLIMATE.
I CHANGES AND ALL THESE OTHER
FACTORS HAVE REALLY CHANGED THAT
VARIABLE AND WE'VE TALKED AROUND
AND ROUND OF WITH SPREADING THAT
SOCIALIZING THAT WRIST YOU HAVE
ANY IDEAS AT LEAST IN THE IN THE
LAW OF HOW WE MAY.
REDEFINE WHAT IT MEANS TO HAVE
UTILITIES.
OUR POLLS ON YOUR PROPERTY IN A
IN AN EASEMENT INVERSE --
EMINENT DOMAIN -- WORLD -- I
THINK THERE ARE.
WHAT I WOULD SAY IS THAT
[inaudible]
IF.
INVERSE CONDEMNATION STAYS AS IT
IS.
ARE THERE IS A TREMENDOUS REWARD.
FOR CREATIVE LAWYERS WHO
CREATIVE PROPERTY LAWYERS WHO
CAN THINK UP NEW WAYS TO SOLVE
THE KIND OF NETWORK PROBLEMS.
THAT UTILITIES HAVE HISTORICALLY
SALT USING EASEMENTS.
I'M USING UTILITY LINES MEN'S IN
ANOTHER WAY THAT DOESN'T INVOLVE
CONDEMNATION -- AND DOESN'T
DOESN'T THEREFORE CREATE THIS
PROBLEM.
COM I AM NOT SURE WHAT THAT
SOLUTION LOOKS LIKE -- BUT I
IMAGINE THAT THERE ARE YOU KNOW
THAT.
THERE ARE [inaudible]
IN PRACTICE.
UTILITIES STRIVE TO AVOID
CONDEMNING PROPERTY THEY TRY TO
REACH AGREEMENTS SETTLEMENTS
THAT DON'T INVOLVE ACTUAL USE OF
EMINENT DOMAIN AUTHORITY --
THERE ARE PROBABLY OTHER
CONTRACTUAL MODELS THAT WOULD
AVOID THE INVERSE CONDEMNATION
DOCTRINE THE PROBLEM IS THAT WE
HAVE THE SYSTEM WE HAVE.
AND IT'S BEEN BUILT USING THE
POWER OF EMINENT DOMAIN AND SO
SUBJECT TO THE LAW THAT WE HAVE.
THE CHARGES FOLLOW REQUEST LAST
WORD SENATOR HERTZBERG AND THEN
WE'RE GOING TO PUBLIC COMMENT.
ON CENTER RECOUNTS THESE
COMMENTS BECAUSE I WANT TO BUILD
ON THAT BECAUSE I THINK YOU
TOUCHED A NERVE HERE.
THANKS IMPORTANT.
ON YOU TALKED ABOUT THE COST OF
THE INSURANCE MODEL VERSUS THE
BRIDGE THE LOAN MODEL.
AND NO QUESTION IS MORE
EXPENSIVE WOULD YOU ASKED THEM
MOST PROBATIVE QUESTION OF WHO
PAYS.
WHEN YOU TALKED EARLIER ABOUT
ENTERPRISE VALUE WHAT WE HAVE
HERE IN TERMS OF WHAT'S CLEAR IS
WE HAVE RATE PAYERS ARE GOING TO
PAY DOUBLE RETAIL?
WE HAVE TAXPAYERS ARE GOING TO
PAY DOUBLE RETAIL BUT WE HAVE
THIS UNIQUE ENTERPRISE VALUE
SYSTEM WHERE FOLKS IT
PARTICULARLY P. JEAN OTHERS ARE
LOOKING AT THIS WHERE WE KNOW
WHAT A HEALTHY UTILITY.
TRADES THAT WE KNOW WHAT OUR
TRADES THAT WE KNOW WHAT THE
WHAT THE WAS TRADING AT NOW
WHETHER IT'S DEBT INSTRUMENTS
FOR EQUITY INSTRUMENTS.
THAT PROVIDES AN OPPORTUNITY TO
TAKE THE COST OFF THE BOOKS OF
THE RATE PAYERS OR TAX PAYERS.
IF IT'S ELEGANTLY DRAFTED TO BE
ABLE TO TO DEAL WITH THIS AND
THE IDEA OF THE UNLIMITED
DOWNSIDE RISKS TO WHICH CHORE TO
CHELATED.
IS GOING TO BE INFORMED BY AND
AGGRESSIVE MITIGATION SIX TO ONE
APPROACH THAT YOU JUST TALKED
ABOUT THAT COULD BE PRETTY
DRAMATIC SO I IN TERMS OF
FIGURING OUT AS THE NINE A ONE
YOUR COMMISSION TALKED ABOUT.
OF THESE VERY IS KIND OF
ELEMENTS WE'RE TRYING TO DO IS
TO TAKE THOSE THOUGHTFUL
ELEMENTS AND COBBLED THEM
TOGETHER.
IN AN APPROACH THAT DEALS WITH
THE SENATE JACKSON TALKED ABOUT
WOULD CENTER NIELSEN TALKED
ABOUT WASN'T KOWSKI JUST TALKED
ABOUT.
INTO A WAY FORWARD AND THE THE
THE COST ANALYSIS AND WHAT YOUR
CONFIRMATION ON THIS IF I'M
RIGHT ON CONFIRMATION IF I'M
WRONG. TO MEDICALLY CHANGES
BECAUSE THEY'RE NOT BECAUSE YOU
HAVE PEOPLE THERE TRADING AT
DEEP DISCOUNTS WHO DESPERATELY
WANT TO PROTECT THEIR ASSETS.
IN AND P. JEANNIE IN PARTICULAR
AND WITH RESPECT TO THE LARGER
PICTURE OF US GRADING HEALTHY
UTILITY MODEL WITH THE WITH THE
LESSON DOWNSIDE RISKS.
THAT A GREAT OPPORTUNITY RESTS
IN CAPTURING THAT ENTERPRISE
VALUE TO THOSE INSTRUMENTS.
I THINK THAT'S RIGHT RPG HAS
SIGNIFICANT LIABILITIES
OBVIOUSLY BECAUSE OF THE
PARADISE -- CATASTROPHE.
AND THE FIRES THAT OCCURRED IN
NAPA AND SONOMA COUNTIES.
BY THE REALITY IS THAT.
I HEALTHY P. JEANNIE WOULD TRADE
AT MULTIPLES OF ITS CURRENT
VALUE.
AND THE FIRMS THAT ARE INVESTING
P. JEANNIE AT PRESENT ARE NOT
TRADITIONAL UTILIY INVESTORS
THEIR HEDGE FUNDS THAT ARE EVENT
DRIVEN.
AND ARE LOOKING AT THIS AS A
OPPORTUNITY WITH SIGNIFICANT
UPSIDE.
AND I THINK IT IS REASONABLE TO
ASK THAT IF THE STATE IS GOING
TO CREATE THAT UPSIDE FOR THE
SHAREHOLDERS APPEASING NEEDED TO
SHAREHOLDERS SHARE SOME OF IT
WITH THE STATE.
GET CAPITA SIDE STATUTORILY IN
TERMS OF THE IDEAS THAT WE WANT
TO DO WE CAN REQUIRE GREATER
CONTRIBUTIONS TO THE QUOTE THE
FUNDS ARE GREATER CONTRIBUTIONS
TO THE TO THAT WILDFIRE FUNDS
THE INSURANCE FUND WE COULD
CREATE A PROCESS TO MAKE SURE
THAT WERE PROTECTED IN THAT
REGARD NOW.
WE YES THE I THINK THE STATE
COULD CONDITION ACCESS TO
VARIOUS TOOLS LIKE A WILDFIRE
FIND OR I DID A OF BETTER.
FROM THE PERSPECTIVE OF A
SHAREHOLDER BETTER COST RECOVERY
LOWER RISK COST RECOVERY
FRAMEWORK.
ON CERTAIN ACTIONS [inaudible]
THIS WAR [inaudible]
VERY MUCH.
VERY DETAILED REPORTS -- FOR
**** ALL THE TIME AND EFFORT OF
YOU AND YOU WOULD YOU PLEASE
ALSO I KNOW -- STILL HERE BUT WE
WANT TO MAKE SURE THAT YOUR YEAH.
SHE RIVETING YES -- BUT I THINK
IT'S IMPORTANT THAT -- THE OTHER
THREE COMMISSIONERS KNOW AND
UNDERSTAND HOW HOW DEEPLY
GRATEFUL WE ARE FOR YOUR SUBJECT
EXPERTISE AND HELP US THROUGH
THIS WE HAVE A LOT OF WORK TO DO
OBVIOUSLY.
THANK YOU VERY MUCH.
YOU HAVE THE HARD PART.
HELLO WE'VE GOT A PUBLIC COMMENT
SO A ONE MINUTE EACH PLEASE COME
[inaudible]
FOR THANK YOU.
PATRICK WHAT FOR THE CALIFORNIA
MUNICIPAL UTILITIES ASSOCIATION
REPRESENTING.
THE OVER FORTY PUBLICLY AND
ELECTRIC UTILITIES A PROVIDE
ELECTRICITY. TWO ABOUT -- 25% OF
THE STATE.
HOLD ON ONE SECOND.
THIS RESPOND IS BEING PAGED
[inaudible]
MR TECHNOLOGY [inaudible]
PLEASE.
PATRICK ROAD FOR THE CALIFORNIA
MUNICIPAL UTILITIES ASSOCIATION
WE CONCUR WITH YOU AND AND YOUR
THANKS TO MISSION IN THE
COMMISSIONERS FOR THEIR WORK
THEY HAVE PUT A NUMBER OF
RECOMMENDATIONS IN FRONT OF YOU.
I'M A LOT OF THEM THAT ARE
INTERCONNECTED WE BELIEVE THE
REPORT SHOULD BE LOOKED AT
HOLISTICALLY.
WE ALSO BELIEVE THAT THE
DISCUSSION OF STRICT LIABILITY
SHOULD CONTINUE TO BE. ONE THAT
IS DISCUSSED IN THIS COMMITTEE
AND OTHER FORMS IN THE
LEGISLATURE IN THE HEARING ON
FRIDAY AT THE COMMISSION THERE
SEEM TO BE BROAD AGREEMENT AMONG
THE FIVE COMMISSIONERS THAT THAT
WAS A VERY IMPORTANT POLICY
ISSUE TO CONTINUE TO LOOK AT FOR
PUBLICLY AND UTILITIES -- WHAT'S
REALLY IMPORTANT IS THAT ANY
SOLUTIONS THAT ARE PERFORMED
RECOGNIZE UNIQUE NATURE OF EACH
UTILITY ENERGY GRAPHICS SERVICE
TERRITORY.
AND LASTLY SOMETHING THAT'SCOME
UP IN THIS HEARING SEVERAL TIMES
S COSTS REPAIRS PUBLIC POLICY
INSTITUTE OF CALIFORNIA JUST
CAME OUT OF THE POLL IS AT EIGHT
AND TEN ELECTRIC CUSTOMERS ARE
CONCERNED ABOUT RISING RATES AS
A RESULT OF WILDFIRE COSTS.
NOT SOMETHING THAT IS DEFINITELY
A FRIEND OF MINE FOR OUR MEMBERS
WE LOOK FOR TO CONTINUE ENGAGING
WITH YOU IN THIS PROCESS AND
THANK YOU FOR TIME.
THANK YOU NEXT SPEAKER.
GOOD AFTERNOON CHAIR MEMBERS
DIRECT OFTEN HAVE LEAD
CALIFORNIA CITIES -- I'VE FIRST
LIKE TO THANK THE COMMISSIONERS
FOR THEIR HARD WORK ON THE
REPORT -- AS WE DISCUSSED WITH
THEM ON FRIDAY THERE'S A NUMBER
OF THINGS THAT WE DO SUPPORT IN
THAT HOWEVER WE DO DISAGREE WITH
THE RECOMMENDATIONS TO CHANGE
THE STRICT LIABILITY STANDARD OF
INVERSE CONDEMNATION TOOL FALL
BASED STANDARD.
I WOULD LIKE TO ECHO SOME OF THE
COMMENTS THAT WERE MADE BY US
SENATOR JACKSON AS WELL BY
SAYING THAT WE THINK THAT THE
KEEPING THE INVERSE CONDEMNATION
STRICT LIABILITY STANDARD AT IS
IS IS A REALLY GOOD INCENTIVE.
FOR UTILITIES DOES TAKE THE
NECESSARY STEPS TO MITIGATE
AGAINST WILD FIRE RISK HOWEVER
WE DO AGREE WITH THE COMMISSION
THAT THOUGH STEP CURRENT STATUS
QUO IS UNTENABLE AND SOMETHING
NEEDS CHANGE.
THAT'S WHY WE'RE SUPPORTIVE OF
THE CONCEPT OF A FUND IN ORDER
TO STABILIZE UTILITIES AND MAKE
SURE THAT WHILE FOR VICTIMS
INCLUDING LOCAL GOVERNMENTS ARE
MADE WHOLE AS QUICKLY AS
POSSIBLE AFTER THE FACT WERE --
COMMITTED TO WORKING WITH THE
LEGISLATURE AND THE GOVERNOR AND
THE COMMISSION ON THIS AND ARE
LOOKING FORWARD TO HELPING CRAP
THOSE PROPOSALS IN THE FUTURE
THANK YOU VERY MUCH.
YOU NEXT BIGGER.
GOOD EVENING CZ HEAT RURAL
COUNTY REPRESENTATIVES OF
CALIFORNIA AND I'D LIKE TO
BRIEFLY SO SEAT MAKE COMMENTS ON
INVERSE CONDEMNATION WITH THAT
TERRIBLE FEE FROM THE LEAGUE
THAT JUST SPOKE.
BUT I'M GONNA MOVE ONTO
INSURANCE ANIMAL TO CHEAT A
LITTLE BIT AND SAY THAT SENATORS
MCGUIRE AND JACKSON PRETTY MUCH
GAVE MY TESTIMONY ON THAT
ALREADY AM THEIR COMMENTS WERE
REALLY GREAT ON THAT.
ESPECIALLY THOSE THAT LIVE IN
RURAL COMMUNITIES RIGHT NOW WE
pCOUNTIES AND I GET CALLS ON THIS
ALMOST DAILY.
ABOUT FOLKS THAT LIVE IN THESE
AREAS THAT ARE BEING CANCELLED
AND NON RENEWED.
AND I WANT TO JUST REMEMBER THAT
MAYBE IT'S ABOUT ONE IN EVERY
TEN WILD FIRES THAT ARE CAUSED
BY SOME SORT OF UTILITY OR OR
ELECTRONIC ISSUE.
AND THESE FOLKS AREN'T OUT THERE
BEING UNINSURED BECAUSE THEY YOU
KNOW HOPE THAT LIKE A WILDFIRE
FUND OR INVERSE CONDEMNATION IS
KIND OF COVER THEIR INSURANCE
THAT THEY DON'T HAVE.
SOME OF THESE FOLKS THEIR
MORTGAGES ARE ALREADY PAID SO
THEY ARE ON FIXED INCOMES THEIR
DISABLED AND THEY'RE SAVING THAT
COSTS BY NOT HAVING INSURANCE.
THE FOLKS THAT ARE DOING DUE
DILIGENCE IN THEIR DEFENSIBLE
SPACE THESE FOLKS ARE HARDENING
THEIR HOMES ARE ARE BEING
CANCELED THE NON RENEWED WE'D
LIKE TO SEE SOME SORT OF
RESOLUTION ON THIS.
LOCAL GOVERNMENT STAND HERE
READY TO WORK WITH YOU ON THIS
ISSUE AND ALSO ON LAND USE WE'VE
WORKED WITH SENATOR JACKSON I
CAN'T BE ONE EIGHTY TWO THANK
YOU READY TO WORK ACTUALLY OCCUR
THANK YOU.
ALL ECHO THE COMMENTS OF MY
COLLEAGUES CALPERS ON BEHALF OF
THE CALIFORNIA STATE ASSOCIATION --
THE ONLY THING ALL OUT IS THAT
WE DO FEEL THE URGENCY OF TIME
WE'RE READY TO ROLL UP OUR
SLEEVES AND GET TO WORK AND
PARTNER WITH YOU ON THIS IN VERY
IMPORTANT AND CRITICAL ISSUE OF
OUR TIME THANK YOU.
THANK YOU SPEAKER DISTANCE CAR
WITH CALIFORNIA WATER SERVICE
CHAIR MEMBERS COMMITTEE THANK
YOU SO MUCH FOR YOUR TIME AND
EFFORT YOU PUT INSIDE ESPECIALLY
BEING HERE UNTIL FIVE THIRTY I'D
LIKE TO ECHO EVERYBODY'S THANKS
TO THE WALL FAR COMMISSION FOR
THE TIME AND EFFORT THEY PUT
INTO THIS ONE ASPECT.
OF THE REPORT THAT WAS DISCUSSED
ON FRIDAY THAT A ONE HIGHLIGHT
TODAY IS THAT WE'RE NOT JUST
TALKING ABOUT THREE ELECTRIC
UTILITIES AND THE STATE WE'RE
TALKING ABOUT EVERY UTILITY IN
THE STATE.
AND SPECIFICALLY WE'RE TALKING
ABOUT EVERY WATER UTILITY IN THE
STATE.
HAS NOT THIS CLEAN ENERGY AND OF
FAIR PRICED ELECTRICITY THEY
WERE TALKING ABOUT WE'RE TALKING
ABOUT CLEAN DRINKING WATER.
AND THAT'S AN ISSUE THAT WE
WOULD LIKE TO CONTINUE
DISCUSSING WITH THIS COMMITTEE --
AND HELP BUT BE PART OF THE
SOLUTION TO THIS VEXING PROBLEM
THANK YOU ALL.
THANK YOU SPEAKER PLEASE.
SELENA PRIOR WITH THE CALIFORNIA
STATE AND DOUBLE ACP I'M HERE ON
BEHALF OF DR ALICE HOFFMAN AND
THE ACTION FOR WILDLIFE
RESILIENCY I'M SORRY WILDFIRE
RESILIENCY A COALITION OF A
HUNDRED AND FIFTY ORGANIZATIONS
REPRESENTING BUSINESS LABOR
PUBLIC SAFETY ENVIRONMENT
SENIORS AND COMMUNITY GROUPS.
OUR COMMUNITY OUR COALITION WILL
BE REINFORCING THE URGENCY OF
THESE ISSUES WITH THE
LEGISLATURE AND ADVOCATING FOR
ENHANCE WILDFIRE PREVENTION IN
THE CALIBER THE CLEAR RULES AN
APPROPRIATION COSTS -- WHEN
FIRES OCCUR INCREASED INVESTMENT
IN EMERGENCY RESPONSE AND THE
ESTABLISHMENT OF WILDFIRE
RECOVERY FIND HELP VICTIMS
RECOVER WHEN FIRES TO OCCUR
THANK YOU THANK YOU?
MR CHAIRMAN MEMBERS OF THE
COMMISSION GUSTIN ON BEHALF OF
THE UTILITY WORKERS UNION OF
AMERICA IN PARTICULAR THEIR
WATER UTILITY COUNCIL AND WE'D
LIKE TO ASSOCIATE OUR COMMENTS
WITH THE PREVIOUS SPEAKER MISTER
SCAR ON THE WATER ISSUE.
WE THINK IT'S AN EMPIRE ON POOR
NATION TO TACKLE -- OUR MEMBERS
ARE VERY CONCERNED ABOUT THE
VIABILITY OF CONTINUING TO BE
ABLE TO PROVIDE.
CLEAN WATER AND AND ALSO THEIR
JOBS THERE ARE YOU KNOW PENSIONS
AND EVERYTHING ELSE THAT GOES
ALONG WITH POTENTIAL CATASTROPHE
THANK YOU [inaudible]
THANK YOU.
MR CHAIRMAN MEMBERS ARE CARLSON
Và SO SHOULD CALIFORNIA LOGGERS
FOLKS TO DO THE WORK.
I'D LIKE TO ADD TO THE MIX ON
INSURANCE AND LIABILITY IN
CONCERNS OF THAT NATURE THAT WE
ARE STARTING TO HEAR IT HAS NOT
SOLIDIFIED YET.
THE CONCEPT THAT INSURANCE MAY
NOT BE AVAILABLE FOR THE PEOPLE
WHO DO THIS WORK IN THE WOODS
PROTECTING YOUR POWER LINES AND
ADDITIONAL IN LOGGING IN GENERAL
SO.
THAT SEEMS TO BE COMING OUR WAY
IN THE SUMMER DEPENDING ON WHEN
CERTAIN -- POLICIES NON RENEW
WILL REPORT MORE THIS COMMITTEE
AND OTHERS BUT IT'S A CRISIS
WITHIN A CRISIS BECAUSE THE
NUMBER OF OUR MEMBERS DO WORK
FOR THE UTILITIES.
THANK YOU [inaudible]
THANK YOU.
HI MISTER CHAIR MEMBERS BRIDGMAN
YANNI ON BEHALF OF CLICK A
CALIFORNIA LARGE ENERGY
CONSUMERS -- WE WOULD LIKE.
TO THANK THE COMMISSION FOR THE
REPORT -- THEY HAD A DIVERSE
GROUP OF EXPERTS ON THAT
COMMITTEE CAME UP WITH A LOT OF
DIFFERENT RECOMMENDATIONS AND WE
AGREE WITH AND THE INVERSE
CONDEMNATION IS OUTDATED NEEDS
TO BE CHANGED ALONG WITH A LOT
OF THE OTHER -- IMPLEMENTATION
FOR PROTECTING RATE PAYERS SO I
WOULD LIKE YOU TO TAKE A LOOK AT
THAT I KNOW THE GOVERNOR SAID
IT'S A LONGER TERM ISSUE BUT
PLEASE DON'T SET THAT ASIDE
PLEASE TAKE A LONG HARD LOOK AT
THAT IT'S A PROTECTION FOR
RATEPAYERS THE END OF THE DAY.
THANK YOU THANK YOU NEXT SPEAKER.
HI LAUREN COMMON BE ALPHA SIERRA
CLUB CALIFORNIA THANK YOU FOR
HOSTING THIS INFORMATIONAL
HEARING WE JUST WANT TO SAY THAT
WERE HAPPY HERE THE CONTINUED
FOCUS ON HOME HARDENING AND
DEFENSIBLE SPACE AND HELPING
COMMUNITIES BECOME MORE
RESILIENT TO WILDFIRES WILL NOT.
OVER BURDENING LOW INCOME AND
DISADVANTAGED CALIFORNIANS THANK
YOU [inaudible]
THANK YOU.
WELL LOOKS LIKE THAT INCLUDES
THE BUSINESS BEFORE THIS US
SELECT COMMITTEE TODAY
APPRECIATE EVERYBODY SHOWED UP.
THANK YOU FOR THE GREAT
QUESTIONS THE MEMBERS.
AND THE WITNESSES