Public utilities: rates: wildfire expense memorandum accounts.
The introduction of AB2346 has significant implications for how public utilities manage their financial liabilities arising from wildfire incidents. Specifically, it aims to streamline the process through which electric corporations can recover costs associated with wildfires, such as settlement costs and risk mitigation investments. Furthermore, while it mandates that cost recovery requests be reviewed by the commission, it delineates which categories of expenses are eligible for recovery, potentially offering protection for consumers against unjustified rate increases.
AB2346, introduced by Assembly Member Quirk, seeks to authorize electrical corporations to establish wildfire expense memorandum accounts. This bill allows these corporations to record certain unreimbursed costs related to California wildfires that have taken place from January 1, 2015, onward. Enabling utilities to track costs like wildfire claims, legal fees, and increased insurance costs aims to provide clarity in financial management and ensure that these costs can be assessed for recovery in utility rates through regulatory approval by the California Public Utilities Commission.
The reception of AB2346 among legislators and stakeholders appears mixed. Proponents highlight the necessity of having clear mechanisms for corporations to recover legitimate wildfire-related costs, which could indirectly contribute to improved service reliability and safety. However, opposition voices express concerns regarding the potential for increased rate burdens on consumers, critiquing the bill’s provisions as allowing utilities to pass on operational risks instead of managing them effectively. The discussion surrounding the bill underscores ongoing debates over energy reliability, climate impacts, and consumer protections.
Notably, AB2346 includes provisions that no reimbursement will be required for local agencies due to the creation of new offenses related to compliance with the bill's directives. This clause has sparked contention among local governments and agencies, fearing the financial implications of added regulatory obligations without state support. The bill's balance between facilitating utility cost recovery and safeguarding against consumer exploitation is pivotal, positioning AB2346 at the intersection of public utility regulation and public interest.