WEBVTT
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We get to it, um, Ms. Sheriff.
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Yes thank you Your Honor,
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the one clarification I would add
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is the request to have PG&E conduct the redirect
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of Mr. Kenny following my cross-examination
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of him today while I am here if possible.
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If there is any, we can see what we can do.
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But with that, let's go ahead
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and continue with this panel for now.
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So I believe Ms. Kelly are you up next?
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Yes I am Your Honor.
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Okay, go ahead.
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Mr. Strauss did you have--
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I might.
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I'd also like to add just a couple questions
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if there is time today for this panel as well.
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Ah, yes.
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Thank you Your Honor.
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Go ahead Ms. Kelly.
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Thank you Your Honor, thank you.
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I believe my questions will be for Mr. Pender.
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If you would please turn to page 6-5 of your testimony.
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Yes.
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(telephone ringing)
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I'm there.
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Thank you.
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At approximately line 22 you say that PG&E
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has completed the Enhanced Vegetation Management work
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on a total of approximately 2,500 line miles,
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is that correct?
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That's correct.
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Okay.
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So what does it take for a line mile
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to be designated as completed work?
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That's a great question.
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So we have a multi-step process
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to move from identifying a line to be worked,
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through completing the work, validating it, et cetera.
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So first we have a pre-inspector,
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a vegetation arborist who goes out
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and marks the trees along that line that need to be worked.
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Now to be clear, Enhanced Vegetation Management
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is enhanced because it's above
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and beyond compliance requirements.
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So generally speaking, compliance requirements
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require a radial clearance,
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just a circle around our power lines.
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Enhanced Vegetation Management goes beyond that,
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to removing overhanging branches, extending the circle
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or the radial clearance and also identifying hazardous
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or at-risk trees adjacent to the power lines
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to be treated or to be removed or trimmed as appropriate.
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So the pre-inspector as part of the EVM program
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is walking the line, marking those trees.
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Then a tree crew comes behind that pre-inspector
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and performs the work that has bee prescribed.
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So that could be removing trees, trimming trees,
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whatever the case may be.
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When they're done we have a work verification process.
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Work verification is performed on 100%
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of the Enhanced Vegetation Management miles.
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So when the tree crew says complete,
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we have a separate inspector,
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part of the work verification process,
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who makes sure that the work
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that they performed was in line with our EVM standard.
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If they identify anything that was not in line
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with our standard, they mark those trees
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that should have been trimmed or something different
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should have occurred and then it is re-worked.
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It goes back to a tree crew to work again
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and then it gets re-work verified to make sure
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that it is in compliance with our standard.
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And then when all that's completed
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then we call a mile complete.
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Additionally, the fourth quarter of last year we added a QA,
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quality assurance step where we had a separate team
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within PG&E take a sampling of all those miles
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that had gone through all those other steps
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and was considered complete to say,
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hey if we looked at it with fresh eyes,
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would we say that those miles are complete
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and in line with our standard.
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So we have a couple of quality steps
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and certainly a couple of process steps
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to complete a mile of Enhanced Vegetation Management.
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And so what have been the results
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of the Quality Assurance performed to date?
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So there's a work verification process right
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and there's a quality assurance step
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which we pretty much only establish in the fourth quarter.
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That sampling basis found approximately 98% pass rate.
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So the miles we had said were complete,
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that quality assurance step validated it.
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98% of what they sampled was
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in fact in line with our standard.
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So that's 2% non-compliance.
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That's 2% that were assessed to not be perfectly
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in compliance with our standard, yes.
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Okay, then turning to,
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I had previously identified MCE exhibit, MC EX-2.
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Do you have that with you?
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I believe so.
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Is that excerpt from the 2019 Wildfire Safety Program?
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Correct.
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So if you go to page 136 of that document.
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Is at the top of that page,
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this relates to quality assurance results in HFTD areas.
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And it says that the target
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is met by achieving 92% meets expectations.
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So what I am understanding that you're saying today
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is PG&E is meeting 98%?
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So this language which was written in early 2019
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as part of our February submittal
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of the Wildfire Safety Plan.
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What we had in mind when we discussed this
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as you look at the top of page 136,
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it references that this QA Review
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will be performed on 100% of the EVM work.
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This is in reference essentially
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to our work verification process.
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And so, every mile is assessed under work verification
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and that was what we initially put the 92% target on.
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And what was the figure for the work verification target
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that PG&E has achieved to date?
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So as has been filed in some other environments,
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to the CPUC as well as to other venues,
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we achieved around 63%, first pass quality clearance
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on this work verification process.
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And can you explain what that 63% is a percentage of?
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So of 100% of the miles that were completed,
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which ended up being 2,500, about 2,500 miles last year,
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we did a work verification and approximately 63%
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of those miles were good to go,
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met our standard from the first check.
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The other 37% needed some rework,
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whether it was one tree or a number of trees.
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The 37% of the miles, when first assessed
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after the tree crew had completed their work,
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we found some rework that needed to be completed
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and then we would verify the miles again.
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So are you saying that in 63% of cases
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there were zero trees that had any exceptions per mile?
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That's one way to think of it.
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That all of the vegetation in that segment of line complied
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with our standard, so yes,
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there were zero exception trees on 63% of the miles.
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And for the remaining 37%
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what on average were the percentage of exception trees,
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or the number of exception trees per mile?
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Yeah I apologize, I don't have any
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of those stats off the top of my head.
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We have that information in our system, but I dunno.
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Okay.
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And I do note on the page prior,
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I'm looking at the same exhibit, MC EX-2, Page 135.
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These quality assurance results,
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the way that this is stated, calculate this as the number
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of trees correctly worked to the EMV
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or drop tree mortality scope divided by all in scope trees.
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So it sounds like a percentage of trees, is that correct?
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That's correct.
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You're right, I may have misstated it
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or it was unclear in what I initially stated.
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The 63% is of the trees in the scope of work.
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In the trees within the 2,500 miles,
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63% were good from the initial work verification
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and 37% needed additional work.
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So if I'm walking down a line mile
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and I'm counting 100 trees, 37% of those trees
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were not correctly worked, is that correct?
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Yeah, that is a correct understanding
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that after the tree crew had completed their work,
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there were 37 trees out of 100
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that still needed some rework.
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Matt, to be clear, in our first quality process
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those trees that were incompletely worked
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were then redirected for rework
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before we declared those miles complete.
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Absolutely correct.
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And can you clarify again what the percentage
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of trees that were non-compliant
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upon completion as you're defining it?
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Yeah, so after the first pass
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we would have done our rework
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and then we would have work verified a second time.
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Once all of that was done and we said
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that mile was complete, we did this QA sample
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in the fourth quarter where we didn't do every mile,
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but we sampled miles and 98% of those
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were within our EVM standard.
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And is that consistent with industry best practices?
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There's no industry best practices in this space.
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We are going above and beyond any regulatory norms.
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There are few companies who do anything like this
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in terms of the scope and scale
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of this vegetation management effort.
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So no, there's no benchmark on this metric, which is,
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if you're doing a program above and beyond compliant,
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what's your quality outcomes in that space.
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And did you refer to the vegetation management plans
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of the other utilities to determine
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how your metrics aligned with theirs?
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Yeah, I mean we've been in regular contact with,
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particularly the other two California IOUs who operate
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in a somewhat similar environment
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about how they operate their programs,
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how they measure all those things.
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And so, are you aware that SDG&E's non-compliance rate
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is approximately 1%?
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If they're measuring a slightly different thing.
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My understanding of their measure of quality
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is not the same as the scope
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of our enhanced Vegetation Management Program.
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The scope of our program,
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in terms of removing all overhangs,
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identifying at-risk trees is more complex
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and drives a higher volume of work than any
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of STG&E's vegetation programs for example.
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Okay.
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And approximately how many trees per mile does PG&E have?
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So I don't have a specific number on that.
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You can take really high-level numbers
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like we have approximately 100 million trees
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with the risk of falling into our lines.
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We have on the distribution system,
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81,000 overhead distribution circuit miles.
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So you could divide those and get some per-mile estimate,
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but of course it varies widely from the urban parts
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of our service territory to the rural
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or forested parts of our service territory.
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So thinking specifically about the high threat
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fire districts, what is that approximate number
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of trees per mile?
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I don't have that number.
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In the literature that I've read,
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it can be quite a wide range,
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but somewhere between 800 trees per mile and I believe,
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I have to find the figure, somewhere around 1,400 or so.
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Does that sound like about the scale
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that we're talking about?
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Those numbers don't surprise me,
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depending on where you sample, or something, you know,
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which miles, which counties, but...
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So Ms. Kelly,
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I think this was carryover time from--
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Yes.
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Ms. Cain that you'd asked for 10 minutes on.
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So let's do a time check.
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Okay.
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I think I have two more questions.
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I think we can accommodate that.
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Thank you.
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And then so how, for purposes of compliance with law
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and the PG&E plan, how are you defining compliance
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for purposes of this program?
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So just to be clear, you mentioned compliance
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with two things and those are very separate things.
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So compliance with the law is about the radial clearance
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around our power lines and making sure
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that no trees get too close to power lines.
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We have a number of processes, different
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than what I previously discussed related
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to EVM to maintain compliance
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with radial clearance regulations.
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So we have a routine Veg Management Program
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that inspects every line on at least an annual basis.
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00:14:29.060 --> 00:14:32.350
We have quality control and quality assurance programs
269
00:14:32.350 --> 00:14:33.900
that check that work.
270
00:14:33.900 --> 00:14:36.250
Quality control checks the work that was performed.
271
00:14:36.250 --> 00:14:38.260
Quality assurance looks at samples
272
00:14:38.260 --> 00:14:40.920
of our system at any time of the year
273
00:14:40.920 --> 00:14:43.130
and goes and looks at: Are all the trees
274
00:14:43.130 --> 00:14:45.400
in compliance with the regulation?
275
00:14:45.400 --> 00:14:49.780
And we have above 99% pass rate
276
00:14:49.780 --> 00:14:51.740
on that quality assurance program.
277
00:14:51.740 --> 00:14:53.520
Related to the legal requirement?
278
00:14:53.520 --> 00:14:54.353
Yes.
279
00:14:54.353 --> 00:14:55.186
Okay.
Yes.
280
00:14:55.186 --> 00:14:56.990
So that's legal compliance.
281
00:14:56.990 --> 00:14:59.400
And then as it relates to our Wildfire Safety Plan
282
00:14:59.400 --> 00:15:01.820
or our Wildfire Mitigation Plan,
283
00:15:01.820 --> 00:15:04.110
we have all the programs I laid out previously
284
00:15:04.110 --> 00:15:07.900
to make sure that we do the work, we check the work,
285
00:15:07.900 --> 00:15:10.290
we rework if necessary and then we validate
286
00:15:10.290 --> 00:15:12.230
that we've completed the work.
287
00:15:12.230 --> 00:15:14.740
So as it relates to compliance
288
00:15:14.740 --> 00:15:15.890
with our Wildfire Mitigation Plan,
289
00:15:15.890 --> 00:15:17.910
we've put those steps in place to make sure
290
00:15:17.910 --> 00:15:20.500
that when we say we've done enough miles
291
00:15:20.500 --> 00:15:24.010
to meet our obligation, our commitment,
292
00:15:25.090 --> 00:15:27.790
they've been thoroughly validated.
293
00:15:27.790 --> 00:15:31.970
And what is the quality threshold of that.
294
00:15:31.970 --> 00:15:34.860
You'd mentioned for compliance with law about 99%
295
00:15:34.860 --> 00:15:39.300
and then for the EVM, what would that be?
296
00:15:41.190 --> 00:15:45.010
Well as I mentioned, we do 100% work verification
297
00:15:45.010 --> 00:15:48.840
and then rework it if necessary until it passes
298
00:15:48.840 --> 00:15:49.720
that work verification.
299
00:15:49.720 --> 00:15:54.720
So we have no threshold that's close enough, right,
300
00:15:54.890 --> 00:15:59.110
until 100% of trees on a segment have been assessed to be
301
00:15:59.110 --> 00:16:03.190
in compliance with our standard on the Wildfire Safety Plan
302
00:16:03.190 --> 00:16:05.280
we won't count that mile as complete.
303
00:16:05.280 --> 00:16:08.160
So when we say 2,500 miles, those 2,500 miles
304
00:16:08.160 --> 00:16:13.110
meet a 100% standard for all trees on that span,
305
00:16:13.110 --> 00:16:15.530
on that mile being completed to standard.
306
00:16:17.250 --> 00:16:19.180
I guess what I don't understand is you had said
307
00:16:19.180 --> 00:16:23.743
that there was a 98% QA achievement,
308
00:16:27.030 --> 00:16:28.130
on the work performed?
309
00:16:29.080 --> 00:16:34.080
Yeah, so as another quality check has sampled those miles
310
00:16:35.760 --> 00:16:39.110
and identified a relatively small number
311
00:16:39.110 --> 00:16:42.370
that may require further look or rework
312
00:16:42.370 --> 00:16:44.140
and if so we will send that back
313
00:16:44.140 --> 00:16:46.690
through our operational team to rework those miles.
314
00:16:51.170 --> 00:16:55.310
And is it your team, or the chief compliance officer
315
00:16:55.310 --> 00:16:58.470
that defines what compliance is?
316
00:16:59.450 --> 00:17:03.690
So the electric operations team has set up the processes
317
00:17:03.690 --> 00:17:06.150
and the standards related to this program,
318
00:17:06.150 --> 00:17:08.860
from the field work to the quality control
319
00:17:08.860 --> 00:17:11.650
or work verification to the quality assurance program.
320
00:17:11.650 --> 00:17:16.650
So all the standards have been established
321
00:17:16.720 --> 00:17:19.480
and owned by the electric operations department.
322
00:17:19.480 --> 00:17:21.357
Okay, I have no further questions.
323
00:17:21.357 --> 00:17:22.760
Thank you Ms. Kelly.
324
00:17:22.760 --> 00:17:24.300
Let's go off the record a minute.
325
00:17:26.100 --> 00:17:27.800
I think it might be me Your Honor.
326
00:17:30.560 --> 00:17:34.060
(speaking off microphone)
327
00:17:51.040 --> 00:17:52.530
On the record Ms. Sheriff.
328
00:17:53.780 --> 00:17:54.720
Thank you Your Honor.
329
00:17:54.720 --> 00:17:55.770
Good afternoon.
330
00:17:55.770 --> 00:17:57.020
My name is Nora Sheriff.
331
00:17:57.020 --> 00:17:59.020
I represent the California Large Energy
332
00:17:59.020 --> 00:18:01.830
Consumer's Association or CLECA.
333
00:18:01.830 --> 00:18:04.490
CLECA is made up of large power customers,
334
00:18:04.490 --> 00:18:07.540
industrial customers, manufacturing customers
335
00:18:08.380 --> 00:18:10.070
of Pacific Gas and Electric Company
336
00:18:10.070 --> 00:18:12.680
and Southern California Edison Company.
337
00:18:12.680 --> 00:18:15.390
I have a few specific questions
338
00:18:15.390 --> 00:18:17.670
which I will direct first to Mr. Pender.
339
00:18:17.670 --> 00:18:19.580
Then I have a different set of questions
340
00:18:19.580 --> 00:18:24.580
for Ms. Maratukulam, if that's correct?
341
00:18:25.480 --> 00:18:26.810
Thank you.
342
00:18:26.810 --> 00:18:31.270
So Mr. Pender, at page 6-7 of your testimony
343
00:18:31.270 --> 00:18:36.090
in what's been marked for identification as exhibit PG&E1.
344
00:18:36.090 --> 00:18:41.090
You state that quote, "PG&E recognizes the seriousness
345
00:18:41.170 --> 00:18:46.170
"of each PSPS event however and has an actively taking steps
346
00:18:46.820 --> 00:18:50.440
"to reduce the duration, frequency and impact
347
00:18:50.440 --> 00:18:54.110
"of PSPS events as detailed in Section E below."
348
00:18:55.260 --> 00:18:59.220
And your colleague drafted Section E.
349
00:18:59.220 --> 00:19:01.170
Did you review her draft testimony?
350
00:19:04.140 --> 00:19:06.710
I didn't review this exact draft testimony,
351
00:19:06.710 --> 00:19:10.000
but we've been in regular contact about the aspects
352
00:19:10.000 --> 00:19:11.560
of the PSPS program as part
353
00:19:11.560 --> 00:19:13.260
of our Wildfire mitigation effort.
354
00:19:15.570 --> 00:19:18.640
Are you aware of the vast number of customers
355
00:19:18.640 --> 00:19:23.350
affected by the fall of 2019 PSP events that received
356
00:19:23.350 --> 00:19:28.350
no notice of those fall 2019 PSPS events from PG&E?
357
00:19:30.740 --> 00:19:35.740
I'm not the expert on the operational aspects
358
00:19:36.850 --> 00:19:41.750
of our 2019 or 2020 PSPS events, so no.
359
00:19:44.410 --> 00:19:47.420
Have you reviewed any of President Batjer's rulings
360
00:19:47.420 --> 00:19:50.850
regarding the fall 2019 PSPS events?
361
00:19:51.780 --> 00:19:54.350
I'm peripherally aware of those rulings
362
00:19:54.350 --> 00:19:57.670
as well as the ongoing proceedings before the CPUC,
363
00:19:57.670 --> 00:20:00.840
but again, not the point person on those activities.
364
00:20:02.330 --> 00:20:03.760
Okay, would it surprise you to note
365
00:20:03.760 --> 00:20:06.350
that in one of her rulings she specifically identified
366
00:20:06.350 --> 00:20:10.160
that there were approximately 23,000 customers
367
00:20:10.160 --> 00:20:14.160
out of the 729,000 customers that were affected
368
00:20:14.160 --> 00:20:19.160
in the fall 2019 PSPS events that got no notice from PG&E?
369
00:20:20.610 --> 00:20:22.240
Objection to foundation.
370
00:20:22.240 --> 00:20:23.110
Sustained.
371
00:20:23.110 --> 00:20:25.590
It's not clear that this is the right witness for this.
372
00:20:25.590 --> 00:20:30.140
He's pretty clearly referring to Section E,
373
00:20:30.140 --> 00:20:31.020
which is not his.
374
00:20:32.240 --> 00:20:36.180
In connection with the efforts to reduce PSPS impacts,
375
00:20:37.090 --> 00:20:39.220
have you considered the different types
376
00:20:39.220 --> 00:20:41.410
of customers that you have?
377
00:20:44.680 --> 00:20:49.680
Our focus on reducing PSPS impacts as we've laid out
378
00:20:50.010 --> 00:20:53.080
in this filing as well as more extensively
379
00:20:53.080 --> 00:20:55.810
in our Wildfire Mitigation Plan are focused
380
00:20:55.810 --> 00:20:58.730
on reducing PSPS impacts to the largest number
381
00:20:58.730 --> 00:21:01.930
of customers possible and then for the customers
382
00:21:01.930 --> 00:21:04.220
who are still impacted by PSPS events
383
00:21:04.220 --> 00:21:06.220
shortening the duration of those events.
384
00:21:07.220 --> 00:21:11.900
I'm not aware that our efforts have been largely influenced
385
00:21:11.900 --> 00:21:13.730
by the makeup of those customers
386
00:21:14.740 --> 00:21:18.530
beyond benefiting the largest populations
387
00:21:18.530 --> 00:21:20.330
of customers as quickly as possible.
388
00:21:21.230 --> 00:21:23.970
And I would invite your colleague, Ms. Maratukulam,
389
00:21:23.970 --> 00:21:26.800
if you have any additional response,
390
00:21:26.800 --> 00:21:28.130
I would like to hear it.
391
00:21:28.130 --> 00:21:30.130
Can you repeat the question?
392
00:21:30.130 --> 00:21:34.570
Whether or not PG&E has considered the different types
393
00:21:34.570 --> 00:21:39.100
of customers that it has, residential, commercial,
394
00:21:39.100 --> 00:21:42.310
industrial when looking at the efforts
395
00:21:42.310 --> 00:21:45.000
that you're undertaking to reduce the impacts
396
00:21:45.000 --> 00:21:47.360
of the public safety power shutoff events.
397
00:21:47.360 --> 00:21:50.490
Yes, PG&E has considered the different customer types
398
00:21:50.490 --> 00:21:53.510
and is targeting both our outreach in advance
399
00:21:53.510 --> 00:21:56.080
of the PSPS season and during, accordingly.
400
00:21:56.990 --> 00:21:57.823
Okay.
401
00:21:57.823 --> 00:22:00.390
So have you, it sounds like you
402
00:22:00.390 --> 00:22:03.780
have considered the different potential impacts
403
00:22:03.780 --> 00:22:06.510
to the surrounding area associated with the sudden loss
404
00:22:06.510 --> 00:22:09.480
of power for those different types of customers?
405
00:22:10.540 --> 00:22:12.520
We're working with our customers to ensure
406
00:22:12.520 --> 00:22:15.180
that they are aware of the potential of de-energization
407
00:22:15.180 --> 00:22:18.160
in advance of the season and then during events work
408
00:22:18.160 --> 00:22:20.790
to ensure that they are notified if they are within scope
409
00:22:20.790 --> 00:22:24.070
of a given event so they can prepare accordingly.
410
00:22:24.070 --> 00:22:27.280
Are you aware that a sudden loss of power
411
00:22:27.280 --> 00:22:32.280
to a large industrial customer with complex machinery,
412
00:22:32.830 --> 00:22:36.740
hazardous materials, could have a very different impact
413
00:22:36.740 --> 00:22:38.370
on the surrounding environment
414
00:22:38.370 --> 00:22:41.270
versus the loss of power to a home or an office?
415
00:22:42.140 --> 00:22:44.230
We recognize that the loss of power
416
00:22:44.230 --> 00:22:47.650
and its effects vary from customer type, yes.
417
00:22:54.340 --> 00:22:58.430
And one critical way to reduce the impact of a PSPS event
418
00:22:58.430 --> 00:23:00.660
is to ensure that all customers
419
00:23:00.660 --> 00:23:02.870
that will be impacted actually have notice.
420
00:23:02.870 --> 00:23:03.740
Correct?
421
00:23:03.740 --> 00:23:06.620
Yes, we strive to ensure that all customers
422
00:23:06.620 --> 00:23:09.420
potentially affected by a given PSPS event are notified.
423
00:23:11.592 --> 00:23:14.650
And if we could turn to page 6-12 of your testimony,
424
00:23:21.910 --> 00:23:25.580
there's only one mention here about improving communications
425
00:23:25.580 --> 00:23:27.620
with end use customers, correct?
426
00:23:29.720 --> 00:23:32.470
Are you referring to a specific line on this page?
427
00:23:36.790 --> 00:23:40.470
Yeah, the first bullet, line 27.
428
00:23:49.790 --> 00:23:52.790
So this line does point to our expected
429
00:23:52.790 --> 00:23:55.520
notification cadence when and where possible,
430
00:23:55.520 --> 00:23:58.160
given weather forecasting capabilities,
431
00:23:58.160 --> 00:24:01.730
to notify customers potentially affected by an event.
432
00:24:01.730 --> 00:24:04.450
Right, and of all the pages of testimony,
433
00:24:04.450 --> 00:24:07.380
there's about four in your Section E,
434
00:24:07.380 --> 00:24:09.080
this is the only one that talks
435
00:24:09.080 --> 00:24:11.480
about notification to customers, correct?
436
00:24:19.534 --> 00:24:20.367
I believe that is the case.
437
00:24:20.367 --> 00:24:25.367
Okay, how long have you been the Director of PSPS events?
438
00:24:25.400 --> 00:24:27.060
A little over one year.
439
00:24:27.060 --> 00:24:29.360
Okay, so this was your role in the
440
00:24:29.360 --> 00:24:30.950
fall of 2019?
441
00:24:30.950 --> 00:24:31.783
It was.
442
00:24:34.940 --> 00:24:38.460
At page 6-11, you refer to transmission assets
443
00:24:38.460 --> 00:24:40.750
in the scope of PSPS events.
444
00:24:44.110 --> 00:24:48.540
Is that testimony intended to state that the officer
445
00:24:48.540 --> 00:24:51.110
in charge decides if a transmission line
446
00:24:51.110 --> 00:24:53.470
will be impacted in a PSPS event?
447
00:24:54.720 --> 00:24:56.700
Yes, there are several key decision points
448
00:24:56.700 --> 00:25:01.380
that our officer in charge makes during PSPS events
449
00:25:01.380 --> 00:25:04.540
and one of those is the scope of the event, specifically,
450
00:25:04.540 --> 00:25:06.440
transmission, as well as distribution.
451
00:25:07.380 --> 00:25:10.860
Do you know who communicates that specific information,
452
00:25:10.860 --> 00:25:13.240
the inclusion of a transmission line,
453
00:25:13.240 --> 00:25:15.010
to the PG&E account reps?
454
00:25:16.790 --> 00:25:19.100
As part of our scoping process,
455
00:25:19.100 --> 00:25:21.470
our Planning and Intelligence Section
456
00:25:21.470 --> 00:25:23.760
within our Emergency Operations Center
457
00:25:24.720 --> 00:25:28.650
is tasked with determining the scope of the event,
458
00:25:28.650 --> 00:25:30.810
both the assets within the scope
459
00:25:30.810 --> 00:25:33.890
and the customers served by those assets.
460
00:25:33.890 --> 00:25:37.800
That information is handed to our customer strategy officer,
461
00:25:37.800 --> 00:25:39.720
and the customer team then
462
00:25:39.720 --> 00:25:41.520
takes over notification accordingly.
463
00:25:42.510 --> 00:25:45.970
And where does the customer account rep fit within
464
00:25:45.970 --> 00:25:49.210
that customer strategy officer description you just gave?
465
00:25:49.210 --> 00:25:51.570
If they are part of that section of the EOC.
466
00:25:53.110 --> 00:25:55.610
What's the timing of that information provision?
467
00:25:57.814 --> 00:26:00.670
They are provided that information as soon as the scope
468
00:26:00.670 --> 00:26:02.580
of the event is determined.
469
00:26:02.580 --> 00:26:04.780
Is that what occurred in the fall of 2019?
470
00:26:06.649 --> 00:26:08.300
Yes.
471
00:26:08.300 --> 00:26:09.133
Without fail?
472
00:26:11.150 --> 00:26:12.540
And to clarify, your question it is
473
00:26:12.540 --> 00:26:17.540
that the customer section within the EOC was made aware
474
00:26:18.020 --> 00:26:21.530
of the customers that had been identified as
475
00:26:21.530 --> 00:26:23.940
within the scope of the potential event?
476
00:26:25.050 --> 00:26:28.050
Yes and then the inclusion of transmission lines.
477
00:26:28.050 --> 00:26:31.130
Yes, there are several stages during the process where,
478
00:26:31.130 --> 00:26:33.510
given the complexity of the transmission system,
479
00:26:33.510 --> 00:26:36.080
we are evaluating the potential full scope
480
00:26:36.080 --> 00:26:40.160
of transmission assets will be, so upon initial scope--
481
00:26:40.160 --> 00:26:41.250
Your Honor, excuse me.
482
00:26:41.250 --> 00:26:44.740
I asked if that's what happened in the fall of 2019.
483
00:26:44.740 --> 00:26:47.380
I think you both kind of wandered around.
484
00:26:47.380 --> 00:26:50.320
Why don't you clarify exactly what you're asking,
485
00:26:50.320 --> 00:26:51.520
and she can answer that?
486
00:26:56.246 --> 00:26:58.170
Are you aware that some customers served,
487
00:26:58.170 --> 00:27:02.300
that the transmission level, were told in October 2019
488
00:27:02.300 --> 00:27:04.810
that their facilities would not be in the scope
489
00:27:04.810 --> 00:27:08.280
of the pending PSPS events, but they actually were
490
00:27:08.280 --> 00:27:11.490
within the scope and they were shutoff without any notice?
491
00:27:12.380 --> 00:27:13.870
Objection, Foundation.
492
00:27:13.870 --> 00:27:14.703
I asked--
493
00:27:14.703 --> 00:27:15.536
Overruled.
494
00:27:15.536 --> 00:27:17.200
If she was aware.
495
00:27:17.200 --> 00:27:19.750
I am not familiar with specific customer,
496
00:27:19.750 --> 00:27:22.660
transmission level customers who experienced that.
497
00:27:22.660 --> 00:27:25.460
I did read in the data request provided
498
00:27:25.460 --> 00:27:27.940
by CLECA some assertion that that was the case.
499
00:27:34.970 --> 00:27:38.903
So on page 6-11, at lines 12 to 13,
500
00:27:41.600 --> 00:27:44.160
you talk about the incident command structure
501
00:27:44.160 --> 00:27:46.890
and the continual monitoring of the situation
502
00:27:46.890 --> 00:27:48.990
and continuous updating.
503
00:27:52.910 --> 00:27:56.640
Has PG&E considered sharing these continuous updates
504
00:27:56.640 --> 00:28:00.930
directly with the actual account reps who are dealing
505
00:28:00.930 --> 00:28:03.920
with customers in real time during events?
506
00:28:03.920 --> 00:28:06.630
So not to a strategy officer,
507
00:28:06.630 --> 00:28:08.230
but directly to an account rep?
508
00:28:11.490 --> 00:28:13.600
The way that the incident command structure works
509
00:28:13.600 --> 00:28:17.510
within our EOC is that information is cascaded accordingly
510
00:28:17.510 --> 00:28:19.510
throughout the sections that require it.
511
00:28:20.610 --> 00:28:22.570
Would you consider cutting out some
512
00:28:22.570 --> 00:28:26.380
of those cascading steps to provide information
513
00:28:26.380 --> 00:28:29.280
on a more timely basis directly to the people who need it?
514
00:28:30.300 --> 00:28:32.940
We strive to follow incident command structure
515
00:28:32.940 --> 00:28:35.870
in all of our emergency response events.
516
00:28:35.870 --> 00:28:39.060
We are executing them as quickly as possible
517
00:28:39.060 --> 00:28:41.390
and we believe that that system is the most efficient
518
00:28:41.390 --> 00:28:44.070
on delivering on the objectives of the program.
519
00:28:44.070 --> 00:28:44.970
So is that a no?
520
00:28:46.591 --> 00:28:50.140
I believe that we are almost directly
521
00:28:50.140 --> 00:28:52.750
through the organization of the EOC
522
00:28:52.750 --> 00:28:54.240
and its incident command structure,
523
00:28:54.240 --> 00:28:57.470
effectively communicating to customer account managers
524
00:28:57.470 --> 00:28:59.770
who are then communicating with our customers.
525
00:29:02.150 --> 00:29:02.983
So, Ms. Sheriff,
526
00:29:02.983 --> 00:29:05.560
you've gone over your eight-minute estimate.
527
00:29:07.242 --> 00:29:08.520
Do you know how much more you have?
528
00:29:10.967 --> 00:29:12.530
I have four more questions.
529
00:29:15.720 --> 00:29:20.173
At page 6-12, lines 24 to 25, you state
530
00:29:21.530 --> 00:29:23.840
that the utility has implemented measures
531
00:29:23.840 --> 00:29:27.770
to mitigate the impact of PSPS events on its customers.
532
00:29:27.770 --> 00:29:30.620
So are those measures that have already been implemented?
533
00:29:32.050 --> 00:29:33.390
Yes.
534
00:29:33.390 --> 00:29:34.590
Have they been tested?
535
00:29:36.660 --> 00:29:38.100
Yes, many of them have.
536
00:29:39.940 --> 00:29:41.040
Which ones have not?
537
00:29:44.210 --> 00:29:45.970
All of these actually have been executed.
538
00:29:45.970 --> 00:29:47.720
They were all executed in the fall.
539
00:29:49.520 --> 00:29:52.020
Yes, however, there were some failures in that execution.
540
00:29:52.020 --> 00:29:54.190
So you have not retested?
541
00:29:55.920 --> 00:29:58.260
We recognize, given the scale of the events
542
00:29:58.260 --> 00:30:00.570
that occurred in the fall of 2018,
543
00:30:00.570 --> 00:30:01.970
that there were improvements
544
00:30:01.970 --> 00:30:04.050
that we could make to the overall process.
545
00:30:04.050 --> 00:30:07.620
And we are working now to stand up those improvements
546
00:30:07.620 --> 00:30:10.020
so that in execution in 2020 going forward
547
00:30:11.378 --> 00:30:14.640
we will be better, smarter and faster at them.
548
00:30:14.640 --> 00:30:17.850
Okay, at line 28 you include the phrase, as possible.
549
00:30:17.850 --> 00:30:18.760
Do you see that?
550
00:30:18.760 --> 00:30:19.593
On which page?
551
00:30:22.270 --> 00:30:25.240
6-12, line 28.
552
00:30:25.240 --> 00:30:26.073
Um-hum.
553
00:30:27.230 --> 00:30:28.980
What do you mean by, as possible?
554
00:30:30.460 --> 00:30:32.690
Given the dynamic nature of weather,
555
00:30:32.690 --> 00:30:35.770
which is what's driving PSPS events,
556
00:30:35.770 --> 00:30:38.730
we are reliant on the weather forecast
557
00:30:38.730 --> 00:30:40.980
and the timeliness of those when they change,
558
00:30:42.130 --> 00:30:45.220
dictating when we are able to both scope the event
559
00:30:45.220 --> 00:30:47.670
and then convey that information accordingly
560
00:30:47.670 --> 00:30:48.670
to our stakeholders.
561
00:30:49.980 --> 00:30:52.780
So does this still mean that a customer could lose power
562
00:30:52.780 --> 00:30:55.550
with actually no notice during a PSPS event?
563
00:30:57.840 --> 00:30:59.530
There is the potential.
564
00:30:59.530 --> 00:31:02.630
While PG&E strives to ensure that we are able
565
00:31:02.630 --> 00:31:06.030
to quickly analyze any forecast changes
566
00:31:06.030 --> 00:31:07.650
and how that translates to the system
567
00:31:07.650 --> 00:31:10.050
and therefore to the customers affected,
568
00:31:10.050 --> 00:31:12.220
do that analysis as quickly as possible
569
00:31:12.220 --> 00:31:14.560
and execute on notifications accordingly.
570
00:31:15.810 --> 00:31:18.260
Weather is a very dynamic system.
571
00:31:18.260 --> 00:31:20.100
And if there are sudden changes,
572
00:31:20.100 --> 00:31:24.220
there could be the potential that we would potentially
573
00:31:24.220 --> 00:31:27.930
have a scope change and not be able to notify in advance.
574
00:31:27.930 --> 00:31:29.910
Priority of the program is to mitigate
575
00:31:29.910 --> 00:31:33.210
catastrophic fire risk while minimizing
576
00:31:33.210 --> 00:31:36.190
the public safety risk of de-energization.
577
00:31:36.190 --> 00:31:38.320
We feel that notification is key to that.
578
00:31:38.320 --> 00:31:41.430
So we'll always strive to do that as possible.
579
00:31:41.430 --> 00:31:44.840
One last question, you've mentioned weather
580
00:31:44.840 --> 00:31:48.470
as being the factor that would implicate whether
581
00:31:48.470 --> 00:31:50.260
or not customers get notice.
582
00:31:50.260 --> 00:31:52.650
Is there any other possible factor that might result
583
00:31:52.650 --> 00:31:56.060
in a customer not getting notice of being shutoff by PG&E?
584
00:31:59.110 --> 00:32:02.940
Scoping of the PSPS event is complex, so yes,
585
00:32:02.940 --> 00:32:04.790
The timeliness of weather forecasts
586
00:32:04.790 --> 00:32:08.498
and how often they change and how dynamic they are
587
00:32:08.498 --> 00:32:09.990
is certainly one major factor.
588
00:32:09.990 --> 00:32:12.640
The other is in our execution processes.
589
00:32:12.640 --> 00:32:14.760
So I mentioned that there were lessons learned
590
00:32:14.760 --> 00:32:18.390
in the fall events that we realized we can work to improve,
591
00:32:18.390 --> 00:32:21.740
automate some of the aspects of our scoping process
592
00:32:21.740 --> 00:32:24.080
to improve them and make them a bit more timely.
593
00:32:25.860 --> 00:32:27.260
So weather and automation?
594
00:32:28.280 --> 00:32:30.600
Weather, our scoping process
595
00:32:30.600 --> 00:32:32.910
and our notification process, yes.
596
00:32:32.910 --> 00:32:33.743
Thank you.
597
00:32:33.743 --> 00:32:34.576
Thank you, Your Honor.
598
00:32:34.576 --> 00:32:35.520
I appreciate your indulgence.
599
00:32:35.520 --> 00:32:37.220
I have no further questions.
600
00:32:37.220 --> 00:32:38.880
Thank you, Ms. Sheriff.
601
00:32:40.960 --> 00:32:42.162
Mr. Long.
602
00:32:42.162 --> 00:32:43.260
Thank you.
603
00:32:43.260 --> 00:32:44.660
Use the microphone, please.
604
00:32:52.160 --> 00:32:52.993
Good afternoon.
605
00:32:52.993 --> 00:32:54.160
I'm Tom Long with TURN.
606
00:32:54.160 --> 00:32:56.800
Ms. Powell, I think it's your turn for questions.
607
00:32:59.810 --> 00:33:01.860
If I could, can I just clarify,
608
00:33:01.860 --> 00:33:04.490
are questions being directed to individual witnesses
609
00:33:04.490 --> 00:33:05.610
or the panel as a whole?
610
00:33:05.610 --> 00:33:07.747
I thought Your Honor said the panel as a whole.
611
00:33:07.747 --> 00:33:09.847
Well, they can be either way
612
00:33:10.946 --> 00:33:12.850
I think if you know what the specific witness is.
613
00:33:12.850 --> 00:33:15.230
Given that PG&E has identified specific witnesses
614
00:33:15.230 --> 00:33:17.930
for specific sections, if there's questions
615
00:33:17.930 --> 00:33:20.660
that are aimed specifically at that section,
616
00:33:20.660 --> 00:33:22.640
it's fine to identify one.
617
00:33:22.640 --> 00:33:25.090
If one of the other witnesses wishes
618
00:33:25.090 --> 00:33:28.280
to add on to that or wishes to respond,
619
00:33:28.280 --> 00:33:30.200
that witness can do that.
620
00:33:30.200 --> 00:33:31.980
Thank you, Your Honor.
621
00:33:31.980 --> 00:33:33.540
The reason I identified Ms. Powell was
622
00:33:33.540 --> 00:33:34.650
because I'm asking questions
623
00:33:34.650 --> 00:33:37.150
about the section that she has sponsored.
624
00:33:38.970 --> 00:33:42.590
Ms. Powell, in particular I'd like to ask some questions
625
00:33:42.590 --> 00:33:45.130
about the section C, which is headed,
626
00:33:45.130 --> 00:33:47.860
Organizational Structure and Governance.
627
00:33:47.860 --> 00:33:51.700
And on pages 6-2 and 6-3 there to identify a number
628
00:33:51.700 --> 00:33:53.350
of organizations that have a role
629
00:33:54.320 --> 00:33:56.700
in wildfire safety, is that correct?
630
00:33:57.880 --> 00:33:58.780
That is correct.
631
00:33:59.774 --> 00:34:03.930
And I hope you have with you the response
632
00:34:03.930 --> 00:34:08.780
to TURN Data Request 17-3 and the attachment,
633
00:34:08.780 --> 00:34:11.960
which has been marked as Cross-Examination Exhibit X-02.
634
00:34:11.960 --> 00:34:13.210
I asked your counsel to make sure
635
00:34:13.210 --> 00:34:14.860
that you were supplied with that.
636
00:34:18.440 --> 00:34:20.530
I believe I have that in front of me,
637
00:34:20.530 --> 00:34:23.330
which includes a whole bunch of organization charts.
638
00:34:23.330 --> 00:34:24.380
Yes.
639
00:34:24.380 --> 00:34:27.817
Okay, so 17-3 the question identified
640
00:34:31.240 --> 00:34:33.090
that same part C we just looked at.
641
00:34:34.070 --> 00:34:36.220
And said, asked to provide an organization chart
642
00:34:36.220 --> 00:34:38.670
that shows the responsibilities and reporting relationships
643
00:34:38.670 --> 00:34:41.590
of the positions, organizations, et cetera.
644
00:34:41.590 --> 00:34:42.470
I'm sorry I'm not--
645
00:34:42.470 --> 00:34:43.770
Okay, sure, be happy to.
646
00:34:46.040 --> 00:34:46.873
Starting over.
647
00:34:46.873 --> 00:34:51.873
That question asked you to provide an organization chart
648
00:34:52.050 --> 00:34:55.590
that shows responsibilities and reporting relationships
649
00:34:55.590 --> 00:34:58.140
of those various organizations mentioned in part C.
650
00:34:58.140 --> 00:34:58.973
Do you see that?
651
00:35:03.832 --> 00:35:04.700
Are you on page three, question three?
652
00:35:04.700 --> 00:35:05.790
That's right.
653
00:35:05.790 --> 00:35:06.860
Yes, I see that.
654
00:35:06.860 --> 00:35:09.830
Okay and then the response was
655
00:35:09.830 --> 00:35:11.590
to supply the organization chart
656
00:35:11.590 --> 00:35:15.380
that is attached to this exhibit; is that right?
657
00:35:15.380 --> 00:35:16.330
Correct.
Okay.
658
00:35:20.330 --> 00:35:24.630
Beginning with your organization, I believe
659
00:35:24.630 --> 00:35:29.630
that's shown on page 622 of this organization chart.
660
00:35:37.150 --> 00:35:38.500
You're one of the boxes
661
00:35:38.500 --> 00:35:41.480
underneath the Senior Vice President, Mr. Lewis.
662
00:35:42.660 --> 00:35:44.260
I'm not on page, correct.
663
00:35:52.020 --> 00:35:54.490
Okay, so there's that box to the far right
664
00:35:55.510 --> 00:35:58.820
that says CWSP and Asset Risk Management,
665
00:35:58.820 --> 00:36:00.410
that's your organization?
666
00:36:00.410 --> 00:36:01.280
It is.
Okay.
667
00:36:02.640 --> 00:36:06.130
Now, is your organization responsible for all
668
00:36:06.130 --> 00:36:09.560
of the programs in PG&E's Wildfire Mitigation Plan?
669
00:36:12.240 --> 00:36:13.073
It is not.
670
00:36:14.380 --> 00:36:17.460
Which organizations, I'm sorry,
671
00:36:17.460 --> 00:36:19.910
which programs in the Wildfire Mitigation Plan
672
00:36:21.600 --> 00:36:23.480
are not covered by your organization?
673
00:36:26.360 --> 00:36:28.010
This may take a couple minutes.
674
00:36:29.910 --> 00:36:34.910
So we are organized today in a plan, do, check,
675
00:36:35.040 --> 00:36:39.820
kind of organization structure within electric operations.
676
00:36:39.820 --> 00:36:44.820
My organization has the planning aspects of our work,
677
00:36:45.430 --> 00:36:48.700
ensuring that the work plan for the year is identified,
678
00:36:48.700 --> 00:36:51.390
the appropriate resources are identified for
679
00:36:51.390 --> 00:36:52.400
that work to occur.
680
00:36:53.630 --> 00:36:57.520
We've been spending quite a bit of time here today talking
681
00:36:57.520 --> 00:37:02.520
about the vegetation management aspects of our program.
682
00:37:02.690 --> 00:37:05.470
And the Vegetation Management Program
683
00:37:05.470 --> 00:37:08.660
is within Ahmad Ababneh's organization,
684
00:37:08.660 --> 00:37:12.010
which is the Major Projects and Programs.
685
00:37:13.810 --> 00:37:17.930
His organization also has the key inspections
686
00:37:17.930 --> 00:37:20.410
that are done of our assets.
687
00:37:22.790 --> 00:37:27.790
In the performance of work for repairs, that work,
688
00:37:29.610 --> 00:37:33.290
whether it's transmission or distribution
689
00:37:33.290 --> 00:37:36.810
are performed by either Tom French's organization
690
00:37:36.810 --> 00:37:38.610
or Ken Wells's organization.
691
00:37:38.610 --> 00:37:41.420
So we have separate organizations identifying the work
692
00:37:41.420 --> 00:37:43.730
to be performed as the organizations
693
00:37:43.730 --> 00:37:46.390
who are actually performing the work.
694
00:37:46.390 --> 00:37:50.170
And then the check piece in Lisa Jordan's organization
695
00:37:50.170 --> 00:37:53.910
is where we have a quality assurance process
696
00:37:53.910 --> 00:37:56.150
to go back through and make sure
697
00:37:56.150 --> 00:37:58.450
that we validated the work has been performed.
698
00:38:00.960 --> 00:38:02.170
Okay and I think you used the term
699
00:38:02.170 --> 00:38:04.480
at the beginning of your answer.
700
00:38:04.480 --> 00:38:07.290
Was it plan, do, check?
701
00:38:07.290 --> 00:38:08.123
Correct.
702
00:38:08.123 --> 00:38:12.900
Okay, where does your organization fit into that scheme?
703
00:38:16.050 --> 00:38:18.500
My organization has the plan function.
704
00:38:19.460 --> 00:38:24.410
And planning for the Wildfire Mitigation Plan Programs?
705
00:38:29.140 --> 00:38:31.500
It's an interesting way to ask the question.
706
00:38:31.500 --> 00:38:35.830
So last year putting together
707
00:38:35.830 --> 00:38:40.830
the Wildfire Mitigation Plan Programs was done in response,
708
00:38:43.780 --> 00:38:47.550
a very heightened effort that we pulled
709
00:38:47.550 --> 00:38:51.100
a whole organization together to respond to.
710
00:38:51.100 --> 00:38:54.060
And that was a separate effort from the rest
711
00:38:54.060 --> 00:38:57.793
of the work that was performed by the organization.
712
00:38:57.793 --> 00:39:01.930
It was essentially a mini emergency operations center
713
00:39:01.930 --> 00:39:05.710
that was in play for the, essentially the entire year.
714
00:39:06.920 --> 00:39:10.000
When electric operations organized,
715
00:39:10.000 --> 00:39:13.830
they reorganized at the end of 2019 recognizing
716
00:39:13.830 --> 00:39:15.600
that the level of effort that we had
717
00:39:15.600 --> 00:39:18.860
in '19 would not be sustainable
718
00:39:18.860 --> 00:39:23.350
nor affordable for a long-term view.
719
00:39:23.350 --> 00:39:26.650
We took those emergent functions
720
00:39:26.650 --> 00:39:30.310
and then we embedded them into the organization
721
00:39:30.310 --> 00:39:34.110
and the organizations under the plan, do, check function.
722
00:39:34.110 --> 00:39:39.110
So my organization performs the planning for all of the work
723
00:39:39.230 --> 00:39:42.020
that is completed within electric operations.
724
00:39:47.556 --> 00:39:48.389
Do you do planning work
725
00:39:48.389 --> 00:39:50.780
for enhanced vegetation management?
726
00:39:54.850 --> 00:39:59.850
We identify the priority miles based on risk
727
00:40:00.700 --> 00:40:04.840
that are required to have work performed.
728
00:40:04.840 --> 00:40:09.090
And then that work package is handed off
729
00:40:09.090 --> 00:40:14.090
to the Major Projects and Programs Organization
730
00:40:14.480 --> 00:40:16.090
for execution.
731
00:40:16.090 --> 00:40:19.530
So is it fair to say that you're the plan part
732
00:40:19.530 --> 00:40:21.550
of the EVM work?
733
00:40:21.550 --> 00:40:22.383
Correct.
734
00:40:27.620 --> 00:40:29.440
And would that be the case also for say,
735
00:40:29.440 --> 00:40:31.950
the Wildfire Safety Inspection Program?
736
00:40:31.950 --> 00:40:33.800
You're the plan part of that program?
737
00:40:34.810 --> 00:40:37.000
So that's where it gets fun.
738
00:40:37.000 --> 00:40:41.560
The Wildfire Safety Inspection Program as we had it dubbed
739
00:40:41.560 --> 00:40:45.360
in 2019 has now been incorporated
740
00:40:45.360 --> 00:40:47.350
into our regular work processes.
741
00:40:47.350 --> 00:40:50.540
So it's no longer a standalone program.
742
00:41:02.510 --> 00:41:06.260
But there's someone that, so there's nobody that does,
743
00:41:06.260 --> 00:41:09.100
that's not a plan, do, check kind of program then,
744
00:41:09.100 --> 00:41:09.933
is that right?
745
00:41:11.230 --> 00:41:13.390
The components of work that were part
746
00:41:13.390 --> 00:41:15.350
of the WISP are incorporated
747
00:41:15.350 --> 00:41:17.820
into our plan, do, check, function.
748
00:41:17.820 --> 00:41:22.740
So the WISP inspections were the detailed inspections
749
00:41:22.740 --> 00:41:24.550
of our equipment.
750
00:41:24.550 --> 00:41:28.030
And we last year inspected nearly everything,
751
00:41:28.030 --> 00:41:31.650
I think everything in our Tier Two and Tier Three zones.
752
00:41:31.650 --> 00:41:35.160
And this year we've committed to 100% of the assets
753
00:41:35.160 --> 00:41:38.300
in the Tier Three areas, 1/3 of our assets
754
00:41:38.300 --> 00:41:43.060
in the Tier Two areas and then keeping our Tier One areas
755
00:41:43.060 --> 00:41:45.020
on a five-year plan.
756
00:41:45.020 --> 00:41:48.690
That formulates into a specific work plan
757
00:41:48.690 --> 00:41:52.020
that is executed on in the major programs,
758
00:41:52.020 --> 00:41:53.440
project and programs area.
759
00:41:55.660 --> 00:41:57.882
So if I'm understanding you,
760
00:41:57.882 --> 00:42:00.270
your organization does not have responsibility anymore
761
00:42:00.270 --> 00:42:04.000
for Wildfire Safety Inspection Program, is that right?
762
00:42:11.580 --> 00:42:14.990
I would say we have the responsibility for planning
763
00:42:14.990 --> 00:42:16.590
that the work is going to occur.
764
00:42:17.710 --> 00:42:20.790
And we also have the reporting responsibility
765
00:42:20.790 --> 00:42:22.500
of what work has been completed
766
00:42:22.500 --> 00:42:25.140
to the higher levels of the corporation.
767
00:42:36.980 --> 00:42:38.950
And sticking with that program,
768
00:42:38.950 --> 00:42:40.760
Wildfire Safety Inspection Program,
769
00:42:41.909 --> 00:42:45.310
I think you said that that's primarily work
770
00:42:46.540 --> 00:42:50.590
that comes under Major Project and Programs now, right?
771
00:42:50.590 --> 00:42:53.140
So the inspections are performed
772
00:42:53.140 --> 00:42:56.240
in the Major Projects and Programs Organization.
773
00:42:57.380 --> 00:43:01.650
Any repairs or work that is identified to be performed
774
00:43:01.650 --> 00:43:04.780
is performed in the Electric Transmission Operations
775
00:43:04.780 --> 00:43:08.390
through the Electric Distribution Operations Organizations.
776
00:43:09.880 --> 00:43:13.300
And so if we look at major, we're back on 622
777
00:43:13.300 --> 00:43:15.840
of the organization chart, page 622.
778
00:43:15.840 --> 00:43:16.720
Okay.
779
00:43:16.720 --> 00:43:21.720
It's third row, far left box, it's the Major Project
780
00:43:23.310 --> 00:43:25.640
and Programs Organization; correct?
781
00:43:25.640 --> 00:43:26.473
Correct.
782
00:43:26.473 --> 00:43:29.470
And that directs us to page 623, which is the next page,
783
00:43:34.950 --> 00:43:36.470
which boxes on that page
784
00:43:36.470 --> 00:43:40.900
would be Wildfire Safety Inspection Program boxes?
785
00:43:42.800 --> 00:43:45.260
Depending on how you consider
786
00:43:45.260 --> 00:43:46.940
the Wildfire Safety Inspection.
787
00:43:46.940 --> 00:43:49.540
If you're talking about our equipment
788
00:43:49.540 --> 00:43:52.890
and the specific equipment inspections that occur there?
789
00:43:52.890 --> 00:43:54.140
Yeah, let's start with transmission.
790
00:43:54.140 --> 00:43:56.240
Let's start doing transmission inspections.
791
00:43:56.240 --> 00:43:57.073
Which box?
792
00:43:59.200 --> 00:44:02.530
Transmission and distribution inspections are
793
00:44:02.530 --> 00:44:05.790
in the director of system inspections for the utility.
794
00:44:05.790 --> 00:44:08.020
That's line three, under Mary Hvistendahl.
795
00:44:10.330 --> 00:44:15.123
Okay, that's both transmission and distribution you say?
796
00:44:16.490 --> 00:44:17.323
Correct.
797
00:44:34.230 --> 00:44:38.563
Back on your testimony at page 6-3, line ome,
798
00:44:42.200 --> 00:44:43.130
talking about your team.
799
00:44:43.130 --> 00:44:47.270
You're saying your team is primarily responsible
800
00:44:47.270 --> 00:44:50.030
for engineering, fire prevention, et cetera.
801
00:44:51.040 --> 00:44:52.940
What do you mean by engineering there?
802
00:44:58.250 --> 00:45:00.130
So my organization has the,
803
00:45:02.340 --> 00:45:06.210
we have the asset management function for the organization.
804
00:45:06.210 --> 00:45:08.220
And as part of that asset management function
805
00:45:08.220 --> 00:45:11.030
of the organization, there are engineers
806
00:45:12.140 --> 00:45:15.670
in our team who perform risk analysis
807
00:45:15.670 --> 00:45:20.220
who understand the health of our equipment
808
00:45:20.220 --> 00:45:24.110
and formulate the plans for the work
809
00:45:24.110 --> 00:45:26.140
that gets performed on the equipment.
810
00:45:31.200 --> 00:45:36.200
Continuing on to line two, from line one to line two,
811
00:45:38.300 --> 00:45:40.700
you use the term fire prevention and mitigation.
812
00:45:41.940 --> 00:45:42.940
That's a broad term.
813
00:45:42.940 --> 00:45:46.800
What specifically is your group responsible for?
814
00:45:47.990 --> 00:45:52.990
So inside the organization we have protocols
815
00:45:56.442 --> 00:45:59.310
that we put in place during fire season
816
00:45:59.310 --> 00:46:03.320
that define processes whereby employees
817
00:46:03.320 --> 00:46:06.120
can actually perform work or are stood down
818
00:46:06.120 --> 00:46:10.630
from performing work based on the potential fire threat.
819
00:46:10.630 --> 00:46:13.740
It's based on weather and temperature conditions
820
00:46:13.740 --> 00:46:15.280
and dryness of fuels.
821
00:46:15.280 --> 00:46:18.550
So we have a procedure
822
00:46:18.550 --> 00:46:21.250
that governs how that work would be performed.
823
00:46:21.250 --> 00:46:24.930
We have crews whose function
824
00:46:24.930 --> 00:46:28.670
is for infrastructure protection
825
00:46:31.370 --> 00:46:34.710
and they have skills similar to firemen,
826
00:46:34.710 --> 00:46:36.550
but they are not actual firemen,
827
00:46:36.550 --> 00:46:40.460
but they do more infrastructure protection work for us.
828
00:46:45.120 --> 00:46:48.339
Going back to Wildfire Mitigation Plan Programs,
829
00:46:48.339 --> 00:46:53.339
where would find the responsible entity
830
00:46:56.410 --> 00:46:59.160
in your organization chart for Grid Hardening Programs?
831
00:47:02.700 --> 00:47:04.620
So for the Grid Hardening Programs,
832
00:47:04.620 --> 00:47:07.940
my team would identify the sections of grid
833
00:47:07.940 --> 00:47:09.680
that would require to be hardened.
834
00:47:11.010 --> 00:47:16.010
And those get turned over to the Major Projects and Programs
835
00:47:17.140 --> 00:47:19.140
for engineering and construction.
836
00:47:22.020 --> 00:47:25.100
Sometimes other crews would do that,
837
00:47:25.100 --> 00:47:27.840
but the majority of that work gets performed in MPMP.
838
00:47:35.887 --> 00:47:37.630
Okay, then last question that's a followup
839
00:47:37.630 --> 00:47:41.820
from the Center for Accessible Technologies' questions.
840
00:47:45.000 --> 00:47:50.000
This may be for you, Ms., which is:
841
00:47:51.610 --> 00:47:56.310
Who's responsible for keeping customers safe
842
00:47:56.310 --> 00:47:58.630
in PSPS events as best PG&E is able?
843
00:48:06.100 --> 00:48:10.050
PG&E strives to ensure the safety
844
00:48:10.050 --> 00:48:12.380
of the communities we serve during PSPS events
845
00:48:14.140 --> 00:48:15.920
largely through in advance of the season.
846
00:48:15.920 --> 00:48:18.180
Ensuring that they're aware of the potential of them,
847
00:48:18.180 --> 00:48:19.810
the preparedness efforts that they can
848
00:48:19.810 --> 00:48:22.800
and should be taking and then during events
849
00:48:22.800 --> 00:48:24.910
through our notification directly
850
00:48:24.910 --> 00:48:29.460
to customers with the potential of being affected.
851
00:48:29.460 --> 00:48:30.630
Okay, I understand that, but again,
852
00:48:30.630 --> 00:48:33.630
it's a question of accountability and responsibility.
853
00:48:33.630 --> 00:48:37.090
Is that your organization that has that responsibility?
854
00:48:37.090 --> 00:48:39.290
My organization has built the processes
855
00:48:39.290 --> 00:48:42.160
and procedures in place for executing an event.
856
00:48:42.160 --> 00:48:45.850
And that includes notification to affected customers.
857
00:48:47.670 --> 00:48:50.660
The safety of our communities I think is a joint
858
00:48:50.660 --> 00:48:54.490
and shared responsibility across many organizations
859
00:48:54.490 --> 00:48:57.780
from state to city and county officials to first responders.
860
00:48:57.780 --> 00:48:59.160
This is a lot of words, but really,
861
00:48:59.160 --> 00:49:01.120
my question's quite simple.
862
00:49:01.120 --> 00:49:03.250
Which organization of PG&E
863
00:49:03.250 --> 00:49:05.520
is responsible for keeping customers safe
864
00:49:05.520 --> 00:49:09.500
in a PSPS event as best PG&E is able?
865
00:49:10.454 --> 00:49:11.287
Is that yours?
866
00:49:12.920 --> 00:49:15.300
In keeping them safe as much as we can
867
00:49:15.300 --> 00:49:18.270
through ensuring they're aware of the potential event, yes.
868
00:49:18.270 --> 00:49:22.290
That is within our PSPS organization executed through our,
869
00:49:22.290 --> 00:49:23.900
as I mentioned, during the EOC,
870
00:49:23.900 --> 00:49:28.710
our customer section within our Emergency Operation Center.
871
00:49:28.710 --> 00:49:29.720
Okay, thank you.
872
00:49:29.720 --> 00:49:31.070
That's all of my questions.
873
00:49:32.040 --> 00:49:32.910
Thank you Mr. Long.
874
00:49:32.910 --> 00:49:33.743
Mr. Alcantar.
875
00:49:45.870 --> 00:49:46.703
Good afternoon.
876
00:49:46.703 --> 00:49:47.536
My name is Michael Alcantar.
877
00:49:47.536 --> 00:49:49.710
I represent the Energy Producers
878
00:49:49.710 --> 00:49:52.080
and Users Coalition in this proceeding
879
00:49:52.080 --> 00:49:53.890
as well for the purposes
880
00:49:53.890 --> 00:49:55.990
of this proceeding the Indicated Shippers.
881
00:49:59.067 --> 00:50:01.840
Ms. Powell, I would like to explore with you the paragraph
882
00:50:01.840 --> 00:50:04.760
that is on page one of your testimony,
883
00:50:04.760 --> 00:50:08.910
PG&E-01, it's 6-1, beginning at line 20.
884
00:50:10.190 --> 00:50:14.900
That paragraph introduces your exposure if you will,
885
00:50:14.900 --> 00:50:19.700
laughing, to your knowledge of AB 1054.
886
00:50:25.010 --> 00:50:28.050
You agree do you not that AB 1054 provides
887
00:50:28.050 --> 00:50:31.930
for certain protections for ratepayers from costs
888
00:50:31.930 --> 00:50:34.110
that may be incurred by PG&E associated
889
00:50:34.110 --> 00:50:38.100
with wildfire liabilities and bankruptcy exposure?
890
00:50:39.440 --> 00:50:40.930
Object, it's lacking foundation.
891
00:50:40.930 --> 00:50:42.350
Calling for legal conclusion.
892
00:50:42.350 --> 00:50:43.183
Overruled.
893
00:50:43.183 --> 00:50:44.490
She can answer if she knows.
894
00:50:48.600 --> 00:50:50.520
I don't have a legal background.
895
00:50:50.520 --> 00:50:51.600
I'm not asking for--
And although--
896
00:50:51.600 --> 00:50:54.200
I'm asking for what your stated understanding
897
00:50:54.200 --> 00:50:55.800
is right here in your testimony.
898
00:50:57.120 --> 00:51:02.120
Although what I know and have heard about AB 1054,
899
00:51:02.240 --> 00:51:04.910
what I have heard is that the company
900
00:51:04.910 --> 00:51:08.567
will not negatively impact our customers
901
00:51:13.940 --> 00:51:15.240
through these proceedings.
902
00:51:17.680 --> 00:51:19.150
Do you know the term baseline
903
00:51:19.150 --> 00:51:23.090
as it's referred to in AB 1054?
904
00:51:23.090 --> 00:51:23.923
I do not.
905
00:51:26.600 --> 00:51:29.040
You're not aware of which costs,
906
00:51:29.040 --> 00:51:31.360
but just generally there are some costs
907
00:51:31.360 --> 00:51:35.910
that this statutory protection applies for ratepayers;
908
00:51:35.910 --> 00:51:37.160
is that a fair statement?
909
00:51:38.260 --> 00:51:39.093
It is.
910
00:51:42.014 --> 00:51:44.460
Do you have any question that the Commission
911
00:51:44.460 --> 00:51:47.650
will determine whether or not actions
912
00:51:47.650 --> 00:51:52.600
that are undertaken by your organization are deemed just,
913
00:51:52.600 --> 00:51:54.750
reasonable and recoverable from ratepayers?
914
00:52:01.030 --> 00:52:05.850
I am aware that there are proceedings for recovery
915
00:52:05.850 --> 00:52:08.320
of costs associated with some of the work
916
00:52:08.320 --> 00:52:11.100
that we perform that do enter
917
00:52:11.100 --> 00:52:14.080
into a separate proceeding of the CPUC.
918
00:52:14.080 --> 00:52:18.030
Beyond that high-level snippet of knowledge,
919
00:52:18.030 --> 00:52:19.630
I do not have the details.
920
00:52:20.810 --> 00:52:23.410
So what do you think this proceeding
921
00:52:23.410 --> 00:52:28.410
is about with respect to the recovery of such costs?
922
00:52:33.210 --> 00:52:34.652
I think that's outside the scope
923
00:52:34.652 --> 00:52:36.960
of my chapter of testimony.
924
00:52:39.680 --> 00:52:44.660
So this is the level of your understanding, that alone.
925
00:52:46.680 --> 00:52:48.980
Do you have a spreadsheet, or are you aware
926
00:52:48.980 --> 00:52:51.730
of any information that's been provided
927
00:52:51.730 --> 00:52:54.580
in this record by you or others
928
00:52:54.580 --> 00:52:56.500
that would identify the total cost
929
00:52:56.500 --> 00:52:59.403
for the programs you're overseeing
930
00:52:59.403 --> 00:53:00.890
with respect to wildfire plans?
931
00:53:03.390 --> 00:53:05.980
I have not specifically seen a spreadsheet
932
00:53:05.980 --> 00:53:07.230
regarding those costs.
933
00:53:10.500 --> 00:53:12.970
Do you know what total costs PG&E has expended
934
00:53:12.970 --> 00:53:15.350
for the programs you're overseeing to date
935
00:53:16.250 --> 00:53:17.800
that it will seek recovery for?
936
00:53:19.250 --> 00:53:21.000
I don't have a breakdown of that.
937
00:53:21.910 --> 00:53:24.210
Do you have a round figure about what it is?
938
00:53:25.150 --> 00:53:27.560
I don't know the 2019 costs.
939
00:53:27.560 --> 00:53:31.050
I know the costs of implementation for our work
940
00:53:31.050 --> 00:53:34.510
in 2020 what they are projected to be.
941
00:53:34.510 --> 00:53:35.870
Okay, what is that?
942
00:53:35.870 --> 00:53:38.660
It's projected to be about 3.2 billion dollars.
943
00:53:50.220 --> 00:53:51.820
You've used the term a few times
944
00:53:51.820 --> 00:53:54.680
in your testimony, the term, repairs.
945
00:53:55.640 --> 00:53:58.660
Can you distinguish repairs from hardening?
946
00:54:03.680 --> 00:54:04.513
I can.
947
00:54:05.540 --> 00:54:10.540
So when you think about repairs of a piece of equipment,
948
00:54:11.110 --> 00:54:12.670
take your car.
949
00:54:13.990 --> 00:54:15.090
Do you have a vehicle?
950
00:54:17.880 --> 00:54:20.390
I do have a vehicle, yes, I have a few of them.
951
00:54:20.390 --> 00:54:25.390
Okay and so when your car gives you a warning light
952
00:54:27.450 --> 00:54:32.070
that tells you it needs to go in and be repaired,
953
00:54:32.070 --> 00:54:33.580
you do that generally, right?
954
00:54:34.460 --> 00:54:36.810
Let's make sure that Mr. Alcantar
955
00:54:36.810 --> 00:54:38.028
is asking the questions.
956
00:54:38.028 --> 00:54:39.940
(laughing)
957
00:54:39.940 --> 00:54:42.780
I'm sorry, I'm trying to explain in sort of lay terms.
958
00:54:42.780 --> 00:54:44.380
I assume that Mr. Alcantar understands
959
00:54:44.380 --> 00:54:45.620
how his car works.
960
00:54:45.620 --> 00:54:46.870
Okay, good.
961
00:54:46.870 --> 00:54:50.660
So same thing with our assets.
962
00:54:51.590 --> 00:54:53.490
We inspect them.
963
00:54:53.490 --> 00:54:56.800
When we inspect them, that we identify conditions
964
00:54:56.800 --> 00:55:00.490
that require something to be done about them.
965
00:55:00.490 --> 00:55:02.670
And we schedule and perform that work.
966
00:55:02.670 --> 00:55:05.070
That's what I consider a repair.
967
00:55:05.070 --> 00:55:07.540
When you think about system hardening,
968
00:55:08.490 --> 00:55:11.520
system hardening is whether we're putting
969
00:55:11.520 --> 00:55:16.270
in composite poles; whether we're putting
970
00:55:16.270 --> 00:55:19.760
in wires that have an insulating material
971
00:55:19.760 --> 00:55:24.760
on the outside so that there can't be vegetation contact
972
00:55:25.310 --> 00:55:28.570
with them that might spark some kind of interaction.
973
00:55:28.570 --> 00:55:29.940
Those are the kinds of things
974
00:55:29.940 --> 00:55:33.500
where even undergrounding our infrastructure are items
975
00:55:33.500 --> 00:55:35.390
that are considered hardening.
976
00:55:35.390 --> 00:55:37.570
So let me give you a non-car analogy back.
977
00:55:37.570 --> 00:55:41.510
Let's assume I'm PG&E and I'm operating a grid
978
00:55:41.510 --> 00:55:44.970
and I happen to serve the area
979
00:55:44.970 --> 00:55:47.530
that is commonly now referred to as Paradise.
980
00:55:48.780 --> 00:55:51.410
And I have equipment there that has failed, if you will,
981
00:55:51.410 --> 00:55:53.070
I ran my car over somebody.
982
00:55:55.020 --> 00:55:57.600
And now I'm seeking recovery of costs
983
00:55:57.600 --> 00:56:01.140
to repair the transmission towers, repair
984
00:56:01.140 --> 00:56:06.080
and replace the transmission towers, the type of wiring,
985
00:56:06.080 --> 00:56:07.640
the system that was there
986
00:56:07.640 --> 00:56:12.350
that caused the catastrophic damage.
987
00:56:13.260 --> 00:56:17.420
Is that a grid-hardening expense that you expect to recover?
988
00:56:17.420 --> 00:56:19.610
Or is that a repair liability
989
00:56:19.610 --> 00:56:21.740
that you as PG&E shareholders will bear?
990
00:56:23.901 --> 00:56:25.550
I have to be perfectly honest,
991
00:56:25.550 --> 00:56:28.570
I do not know the cost treatment
992
00:56:29.550 --> 00:56:32.310
of the infrastructure work being performed
993
00:56:32.310 --> 00:56:33.430
in the Paradise area.
994
00:56:38.550 --> 00:56:41.910
Well, would it help you if it was not the Paradise area?
995
00:56:41.910 --> 00:56:45.160
Let's just assume it's a PG&E piece of equipment
996
00:56:45.160 --> 00:56:49.400
that causes injury to someone or something,
997
00:56:50.300 --> 00:56:52.640
and it needs to be repaired.
998
00:56:52.640 --> 00:56:57.640
Is that a cost that you would classify as grid hardening
999
00:56:59.060 --> 00:57:02.660
and subject to potential recovery from ratepayers?
1000
00:57:02.660 --> 00:57:06.220
Or as a repair for liabilities
1001
00:57:06.220 --> 00:57:08.880
that PG&E has for its shareholders?
1002
00:57:10.800 --> 00:57:14.560
When we have equipment repair that is necessary,
1003
00:57:15.960 --> 00:57:20.960
those items are typically funded through our rate case.
1004
00:57:22.040 --> 00:57:23.080
That's what I'm asking you,
1005
00:57:23.080 --> 00:57:26.120
a distinction between what's typical.
1006
00:57:26.120 --> 00:57:29.090
I don't think it's typical that we start wildfires.
1007
00:57:30.830 --> 00:57:34.540
So you have a repair that you must fulfill,
1008
00:57:35.420 --> 00:57:38.490
make no distinction between grid hardening
1009
00:57:38.490 --> 00:57:41.800
and repair recovery in those circumstances is,
1010
00:57:41.800 --> 00:57:44.390
I think, what I'm hearing from your testimony, is that fair?
1011
00:57:46.910 --> 00:57:50.330
I'm not sure I have the financial background
1012
00:57:50.330 --> 00:57:53.400
to make a determination to answer your question.
1013
00:57:57.380 --> 00:58:00.640
Your Honor, given the responses to those questions,
1014
00:58:00.640 --> 00:58:02.860
I have nothing further.
1015
00:58:02.860 --> 00:58:04.610
Thank you, Mr. Alcantar.
1016
00:58:07.200 --> 00:58:09.280
Mr. Strauss, did you have some questions?
1017
00:58:10.920 --> 00:58:12.370
Yes, Your Honor, thank you.
1018
00:58:13.540 --> 00:58:15.580
My name is Ariel Strauss.
1019
00:58:15.580 --> 00:58:17.260
I'm here on behalf of SBUA,
1020
00:58:18.410 --> 00:58:21.700
Small Business Utility Advocates.
1021
00:58:26.070 --> 00:58:28.330
I have a question for the panel,
1022
00:58:28.330 --> 00:58:30.370
because I don't know the best person
1023
00:58:30.370 --> 00:58:33.410
to direct this question to and that question
1024
00:58:33.410 --> 00:58:38.410
is regarding the overall price tag to the public
1025
00:58:38.530 --> 00:58:43.500
for the 2019 PSPS de-energization events.
1026
00:58:44.429 --> 00:58:46.930
Does PG&E have a calculation
1027
00:58:46.930 --> 00:58:50.530
for the overall impact to the public of those events?
1028
00:58:54.400 --> 00:58:55.790
I can answer.
1029
00:58:55.790 --> 00:58:59.570
No, PG&E does not have a calculation
1030
00:58:59.570 --> 00:59:02.060
of estimated cost to the public.
1031
00:59:02.060 --> 00:59:03.540
Thank you.
1032
00:59:03.540 --> 00:59:08.540
Previously the holding company CEO testified
1033
00:59:09.820 --> 00:59:14.000
that he expects that the need for PSPS events
1034
00:59:14.000 --> 00:59:16.470
could be eliminated in the coming 10 years.
1035
00:59:17.920 --> 00:59:22.250
I understand that means that certain work could be done
1036
00:59:22.250 --> 00:59:23.880
to the infrastructure that would eliminate
1037
00:59:23.880 --> 00:59:27.220
the need for PSPS events, is that correct?
1038
00:59:27.220 --> 00:59:30.040
Object as misscharacterizing the testimony.
1039
00:59:30.040 --> 00:59:30.970
Overruled.
1040
00:59:34.760 --> 00:59:39.140
So I'm not specifically aware of the exact language
1041
00:59:39.140 --> 00:59:44.140
that the CEO used in describing that projection.
1042
00:59:44.470 --> 00:59:47.000
I can say that PG&E is working diligently
1043
00:59:47.000 --> 00:59:51.440
to minimize the impacts of PSPS events going forward,
1044
00:59:51.440 --> 00:59:54.020
starting now working on asset-based solutions
1045
00:59:54.020 --> 00:59:59.020
to minimize the scope, frequency and duration.
1046
00:59:59.340 --> 01:00:01.530
So my question is without regard
1047
01:00:01.530 --> 01:00:03.530
to any previous testimony,
1048
01:00:03.530 --> 01:00:08.500
is it possible to eliminate the need for PSPS events
1049
01:00:08.500 --> 01:00:12.120
based on activity to be conducted and changes
1050
01:00:12.120 --> 01:00:14.410
to be made to the transmission
1051
01:00:14.410 --> 01:00:17.830
or other equipment that PG&E now holds?
1052
01:00:20.280 --> 01:00:22.080
I believe PG&E has an opportunity
1053
01:00:22.080 --> 01:00:25.340
to significantly reduce the impacts
1054
01:00:25.340 --> 01:00:28.190
and potential for PSPS events,
1055
01:00:28.190 --> 01:00:31.010
but the reality of it is these are weather-driven events
1056
01:00:31.010 --> 01:00:33.710
and we do not know the severity of weather
1057
01:00:33.710 --> 01:00:35.320
that will occur in the future
1058
01:00:35.320 --> 01:00:37.310
that could require de-energization.
1059
01:00:41.280 --> 01:00:45.327
Okay, Ms. Maratukulam, on page 6-13
1060
01:00:46.590 --> 01:00:50.570
of your testimony sponsored,
1061
01:00:50.570 --> 01:00:55.570
you state that for the 2020 wildfire season as a result
1062
01:00:56.510 --> 01:00:58.948
of leveraging more granular data
1063
01:00:58.948 --> 01:01:01.986
and deploying additional sectionalization devices.
1064
01:01:01.986 --> 01:01:03.210
(speaking off microphone)
1065
01:01:03.210 --> 01:01:07.380
Yes, for the 2020 wildfire season as a result
1066
01:01:07.380 --> 01:01:09.150
of leveraging more grandular data
1067
01:01:09.150 --> 01:01:12.370
and deploying additional sectionalization devices
1068
01:01:12.370 --> 01:01:16.260
field team pre-positioning microgrids and other activities,
1069
01:01:16.260 --> 01:01:18.860
the utility is targeting to reduce the number
1070
01:01:18.860 --> 01:01:22.340
of customers affected by individual PSPS events
1071
01:01:22.340 --> 01:01:23.610
by nearly 1/3.
1072
01:01:26.010 --> 01:01:31.010
Is this a fair representation to say that
1073
01:01:32.500 --> 01:01:37.500
that 1/3 target is based on a retrospective study of actions
1074
01:01:39.060 --> 01:01:42.110
that could have been taken to limit the effect
1075
01:01:42.110 --> 01:01:46.240
of October and November 2019 PSPS events?
1076
01:01:47.590 --> 01:01:50.170
That analysis was performed at the end
1077
01:01:50.170 --> 01:01:52.820
of the season looking back at our largest event,
1078
01:01:52.820 --> 01:01:55.780
October 26th, and the impact, scope,
1079
01:01:55.780 --> 01:01:58.300
and scale of that event specifically.
1080
01:01:58.300 --> 01:02:00.450
A case study was performed to evaluate
1081
01:02:00.450 --> 01:02:04.630
if we had various mitigation measures in place
1082
01:02:04.630 --> 01:02:06.210
and which are described there,
1083
01:02:06.210 --> 01:02:10.100
what would the potential reduction in customer impact be.
1084
01:02:10.100 --> 01:02:12.380
And from that case study specifically,
1085
01:02:12.380 --> 01:02:14.550
the 1/3 number was derived.
1086
01:02:14.550 --> 01:02:17.040
And will all those activities
1087
01:02:17.040 --> 01:02:20.730
that were identified be conducted in 2020
1088
01:02:20.730 --> 01:02:24.290
across all the areas in which PSPS events could occur?
1089
01:02:25.430 --> 01:02:28.210
Yes, so while the case study was performed
1090
01:02:28.210 --> 01:02:31.230
on the 10-26 event specifically.
1091
01:02:31.230 --> 01:02:34.790
We are working to operationalize those mitigation efforts
1092
01:02:34.790 --> 01:02:36.640
across the high-fire threat district.
1093
01:02:38.350 --> 01:02:40.770
And is it on target to be completed in 2020?
1094
01:02:43.930 --> 01:02:45.840
As Debbie alluded to, the execution
1095
01:02:45.840 --> 01:02:48.900
of a lot of this asset-based work is it sits
1096
01:02:48.900 --> 01:02:50.260
within other organizations
1097
01:02:50.260 --> 01:02:52.990
and I'm not familiar with their current work progress.
1098
01:02:54.380 --> 01:02:58.330
Would you then say that the target of a 1/3 reduction
1099
01:02:58.330 --> 01:03:00.010
in impacts or the number
1100
01:03:00.010 --> 01:03:02.310
of customers impacted is speculative?
1101
01:03:08.410 --> 01:03:11.080
It is based on that case study in particular,
1102
01:03:11.080 --> 01:03:14.440
so that 1/3 reduction would be reaped
1103
01:03:14.440 --> 01:03:18.600
if we had the same event occur in the same area.
1104
01:03:19.800 --> 01:03:21.020
Weather is dynamic.
1105
01:03:21.020 --> 01:03:22.920
We will see how this year plays out,
1106
01:03:22.920 --> 01:03:24.920
where it plays out and to what severity.
1107
01:03:25.930 --> 01:03:26.900
Thank you.
1108
01:03:26.900 --> 01:03:30.450
In response to Ms. Kasnitz's line of questioning,
1109
01:03:30.450 --> 01:03:32.660
Ms. Maratukulam, you confirmed you're aware
1110
01:03:32.660 --> 01:03:36.100
of public harms of the PSPS events.
1111
01:03:36.100 --> 01:03:38.460
Has PG&E assessed the risks of specific
1112
01:03:38.460 --> 01:03:41.880
negative public safety outcomes from PSPS events?
1113
01:03:44.140 --> 01:03:47.280
Broadly we look across our customer base
1114
01:03:47.280 --> 01:03:49.630
at the potential effects of de-energization
1115
01:03:49.630 --> 01:03:53.328
and are working with our customers to identify them
1116
01:03:53.328 --> 01:03:57.320
and ensure that preparedness efforts are put in place.
1117
01:03:58.210 --> 01:04:00.490
But with respect to specific events,
1118
01:04:00.490 --> 01:04:05.030
so let's say has PG&E been in touch with CHP
1119
01:04:05.030 --> 01:04:06.150
to identify whether there have been
1120
01:04:06.150 --> 01:04:09.350
more car accidents during PSPS events?
1121
01:04:11.540 --> 01:04:13.490
No, I don't believe that we have attempted
1122
01:04:13.490 --> 01:04:17.450
to quantify the effects from other agencies.
1123
01:04:17.450 --> 01:04:20.220
We are working to, we stood up a series
1124
01:04:20.220 --> 01:04:23.420
of listening sessions coming out of the fall events
1125
01:04:23.420 --> 01:04:26.050
to visit all of the affected cities and counties
1126
01:04:26.050 --> 01:04:28.230
and to hear from them feedback
1127
01:04:28.230 --> 01:04:31.080
of what they would like to see executed differently.
1128
01:04:31.080 --> 01:04:33.960
So, I would imagine, though I haven't seen the results
1129
01:04:33.960 --> 01:04:35.120
of those listening sessions,
1130
01:04:35.120 --> 01:04:37.450
that there was some feedback received
1131
01:04:37.450 --> 01:04:39.820
or input given in terms of effects.
1132
01:04:39.820 --> 01:04:41.560
Our goal with those listening sessions
1133
01:04:41.560 --> 01:04:43.810
is to learn how we can improve going forward.
1134
01:04:45.020 --> 01:04:47.440
And without that data, the specific data
1135
01:04:47.440 --> 01:04:51.190
on specific outcomes, how does PG&E determine
1136
01:04:51.190 --> 01:04:54.560
that the benefits of de-energization
1137
01:04:54.560 --> 01:04:56.650
outweigh potential public safety risks?
1138
01:04:59.560 --> 01:05:03.080
Each event is dynamic so we're working during the event
1139
01:05:03.080 --> 01:05:06.280
to reach out to local officials,
1140
01:05:06.280 --> 01:05:08.920
city and county agencies and first responders
1141
01:05:08.920 --> 01:05:12.190
to make them aware of the event and learn
1142
01:05:12.190 --> 01:05:14.490
of what the potential effects could be.
1143
01:05:14.490 --> 01:05:17.687
That is brought into our decision-making awareness
1144
01:05:17.687 --> 01:05:21.310
of what we are informed of as potential effects.
1145
01:05:21.310 --> 01:05:23.410
Did you just say, during the event?
1146
01:05:23.410 --> 01:05:24.320
Yes.
1147
01:05:24.320 --> 01:05:26.870
My question pertains to prior to the event
1148
01:05:26.870 --> 01:05:28.030
in terms of the decision-making
1149
01:05:28.030 --> 01:05:32.330
about whether de-energization will be initiated or not.
1150
01:05:32.330 --> 01:05:33.840
In advance of events, we're working
1151
01:05:33.840 --> 01:05:36.630
to mitigate those potential effects.
1152
01:05:36.630 --> 01:05:40.040
So when it comes down to making the actual decision,
1153
01:05:40.040 --> 01:05:42.410
we really do require that we have the scenario
1154
01:05:42.410 --> 01:05:45.340
in front of us to know what risks we have to balance.
1155
01:05:46.460 --> 01:05:47.293
Thank you.
1156
01:05:47.293 --> 01:05:48.960
That completes my questions, Your Honor.
1157
01:05:50.240 --> 01:05:51.220
Thank you.
1158
01:05:51.220 --> 01:05:55.590
I understand Mr. Abrams, any other cross?
1159
01:05:55.590 --> 01:05:57.470
Mr. Abrams, go ahead.
1160
01:05:57.470 --> 01:05:58.670
Thank you, Your Honor.
1161
01:05:59.870 --> 01:06:00.720
Thank you, panel.
1162
01:06:03.906 --> 01:06:05.130
I have some questions just following up
1163
01:06:05.130 --> 01:06:08.770
on some of the previous questions in this proceeding.
1164
01:06:09.660 --> 01:06:14.660
And specifically, Ms. Powell, you mentioned
1165
01:06:14.850 --> 01:06:19.850
sort of this plan, do, check differentiation.
1166
01:06:23.000 --> 01:06:28.000
And as I look through the testimony in this section,
1167
01:06:29.590 --> 01:06:34.590
one thing that struck me is that it's a description
1168
01:06:34.650 --> 01:06:38.580
of past activities or current activities.
1169
01:06:38.580 --> 01:06:41.220
Given that this is a Plan of Reorganization
1170
01:06:41.220 --> 01:06:44.430
and you are the head of that planning function,
1171
01:06:46.774 --> 01:06:49.310
I was expecting to see more planning
1172
01:06:49.310 --> 01:06:51.520
represented in the testimony.
1173
01:06:51.520 --> 01:06:56.520
Can you explain, please, why there wasn't more planning
1174
01:06:57.460 --> 01:06:59.230
and future and a discussion
1175
01:06:59.230 --> 01:07:02.810
about what's gonna happen going forward in the testimony?
1176
01:07:18.210 --> 01:07:22.540
When I think about the Chapter Six as part
1177
01:07:24.970 --> 01:07:29.970
of the Plan of the Reorganization and the concerns
1178
01:07:31.690 --> 01:07:36.690
in the state about wildfire mitigation
1179
01:07:37.220 --> 01:07:39.490
and Public Safety Power Shutoff,
1180
01:07:41.080 --> 01:07:46.080
we felt those topics and the plan of what we are doing,
1181
01:07:46.340 --> 01:07:49.470
which we referenced, the Wildfire Mitigation Plan,
1182
01:07:49.470 --> 01:07:53.370
which is a very large document describing
1183
01:07:53.370 --> 01:07:58.190
in a lot of detail the work that we're performing in 2020
1184
01:07:58.190 --> 01:08:03.190
and beyond to mitigate the potential effects of wildfire,
1185
01:08:05.300 --> 01:08:10.300
this seemed most relevant given the Plan of Reorganization.
1186
01:08:16.640 --> 01:08:21.640
So the bankruptcy and the Plan of Reorganization
1187
01:08:22.520 --> 01:08:26.450
is in response to, and the reason why PG&E is in bankruptcy,
1188
01:08:26.450 --> 01:08:31.450
is in response to a poor track record to this date.
1189
01:08:34.170 --> 01:08:39.170
And so part of what I imagine the Commission and parties
1190
01:08:39.850 --> 01:08:43.550
and the public are looking for is a course correction,
1191
01:08:43.550 --> 01:08:47.090
is a recognition of what's transpired in the past,
1192
01:08:47.090 --> 01:08:49.490
but a forward-looking view of here's what we're
1193
01:08:49.490 --> 01:08:52.860
gonna be doing differently going forward.
1194
01:08:52.860 --> 01:08:55.170
So what have you described in your testimony
1195
01:08:55.170 --> 01:08:59.560
in terms of the planning function in the testimony
1196
01:08:59.560 --> 01:09:02.250
that is different that will provide a level
1197
01:09:02.250 --> 01:09:05.700
of confidence that things will change moving forward?
1198
01:09:12.600 --> 01:09:16.330
I would refer you to the Wildfire Mitigation Plan,
1199
01:09:16.330 --> 01:09:18.910
which was filed, I think, about a week
1200
01:09:19.810 --> 01:09:22.800
after this testimony was filed.
1201
01:09:22.800 --> 01:09:27.610
The Wildfire Mitigation Plan has more than 200 pages
1202
01:09:27.610 --> 01:09:32.610
about what we are doing to mitigate that risk
1203
01:09:33.350 --> 01:09:38.350
and to implement additional items in 2020
1204
01:09:38.660 --> 01:09:41.770
and beyond to address the wildfire threat.
1205
01:09:48.560 --> 01:09:50.270
So how has that been incorporated
1206
01:09:50.270 --> 01:09:52.300
into the Plan of Reorganization,
1207
01:09:52.300 --> 01:09:57.300
which is the official organizational framework for how
1208
01:09:59.250 --> 01:10:02.290
that Wildfire Mitigation Plan is gonna be supported?
1209
01:10:02.290 --> 01:10:05.790
Where's the forward-looking, here's how we're gonna change
1210
01:10:05.790 --> 01:10:08.200
to address what you just described?
1211
01:10:11.800 --> 01:10:13.900
I'm not sure I understand your question.
1212
01:10:15.970 --> 01:10:20.970
So reorganization, restructuring, is a change in course.
1213
01:10:23.240 --> 01:10:25.740
Would you not say that that's a correct statement?
1214
01:10:30.260 --> 01:10:32.210
I'd agree that it's a plan
1215
01:10:32.210 --> 01:10:34.890
for how the company will move forward.
1216
01:10:35.920 --> 01:10:38.570
Okay, so not a change?
1217
01:10:39.680 --> 01:10:41.070
I didn't say that.
1218
01:10:41.070 --> 01:10:42.520
Well, I'm asking, it's a question.
1219
01:10:42.520 --> 01:10:44.200
It's a plan.
Is that not a change?
1220
01:10:44.200 --> 01:10:46.310
Let's have one person talk at a time.
1221
01:10:46.310 --> 01:10:48.610
So go ahead, Mr. Abrams.
1222
01:10:50.120 --> 01:10:52.150
So you said it's a plan.
1223
01:10:52.150 --> 01:10:56.180
What I'm asking for is the Plan of Reorganization,
1224
01:10:56.180 --> 01:10:59.970
Plan of Restructuring, meant to be a change
1225
01:10:59.970 --> 01:11:01.620
in terms of how you move forward?
1226
01:11:04.580 --> 01:11:05.880
I could agree with that.
1227
01:11:07.870 --> 01:11:09.180
Do you?
1228
01:11:09.180 --> 01:11:11.200
I appreciate that.
1229
01:11:11.200 --> 01:11:12.350
Do you agree with that?
1230
01:11:15.470 --> 01:11:16.303
I do.
1231
01:11:17.162 --> 01:11:19.220
Okay, so given that you feel
1232
01:11:19.220 --> 01:11:22.070
like the Plan of Reorganization, the Plan of Restructuring
1233
01:11:22.070 --> 01:11:25.080
is a change in the path ahead,
1234
01:11:26.290 --> 01:11:29.350
where in your testimony do you describe
1235
01:11:29.350 --> 01:11:33.060
that change in the plan?
1236
01:11:33.960 --> 01:11:35.810
How are you doing things differently?
1237
01:11:39.710 --> 01:11:43.740
Let me just ask a question to clarify.
1238
01:11:43.740 --> 01:11:47.450
Ms. Powell, am I correct that none
1239
01:11:47.450 --> 01:11:51.620
of the wildfire safety measures in Chapter Six,
1240
01:11:51.620 --> 01:11:53.980
or their costs, are actually part
1241
01:11:53.980 --> 01:11:56.330
of the Plan of Reorganization, is that correct?
1242
01:12:00.960 --> 01:12:04.120
Our Plan of Reorganization is a financial plan
1243
01:12:05.000 --> 01:12:07.940
that includes the body of work
1244
01:12:07.940 --> 01:12:11.550
that is included in our Wildfire Mitigation Plan.
1245
01:12:13.650 --> 01:12:17.960
So the costs and measures in the Wildfire Mitigation Plan
1246
01:12:17.960 --> 01:12:22.410
or at least the costs of the Wildfire Mitigation Plan
1247
01:12:22.410 --> 01:12:24.240
are taken into account
1248
01:12:24.240 --> 01:12:26.230
in the Plan of Reorganization, correct?
1249
01:12:26.230 --> 01:12:27.170
Correct.
1250
01:12:27.170 --> 01:12:31.500
But the measures in either Chapter Six
1251
01:12:31.500 --> 01:12:33.960
or in the Wildfire Mitigation Plan are not part
1252
01:12:33.960 --> 01:12:36.920
of the Plan of Reorganization, is that correct?
1253
01:12:38.390 --> 01:12:40.010
I have to ask a question.
1254
01:12:40.010 --> 01:12:42.680
I don't understand what you mean by, the measures.
1255
01:12:44.100 --> 01:12:47.400
Well, in Chapter Six,
1256
01:12:55.730 --> 01:12:57.787
there's Enhanced Vegetation
1257
01:13:06.430 --> 01:13:10.530
Management Program, system hardening,
1258
01:13:11.670 --> 01:13:16.670
Wildfire Safety Inspection Program, Power Shutoff Program,
1259
01:13:19.830 --> 01:13:22.690
all of these things with the numbers.
1260
01:13:26.480 --> 01:13:31.480
Those elements, those measures, are not actually
1261
01:13:32.250 --> 01:13:34.600
in the Plan of Reorganization, is that correct?
1262
01:13:40.790 --> 01:13:43.190
I understand that certain of those costs may be,
1263
01:13:46.080 --> 01:13:47.330
but the Plan of Reorganization
1264
01:13:47.330 --> 01:13:49.480
doesn't describe any of those.
1265
01:13:49.480 --> 01:13:52.070
The Plan of Reorganization doesn't describe
1266
01:13:52.070 --> 01:13:56.430
the very detailed plans that we have
1267
01:13:56.430 --> 01:14:00.577
in our wildfire mitigation mitigation plan.
1268
01:14:02.197 --> 01:14:05.160
Now, I know this is not your testimony,
1269
01:14:05.160 --> 01:14:09.170
could you turn to page 10-3 of PG&E Volume One.
1270
01:14:20.910 --> 01:14:25.910
And on page 10-3, if you go to line nine, it states:
1271
01:14:30.340 --> 01:14:32.950
"For example, changes in rates that result
1272
01:14:32.950 --> 01:14:36.300
"from costs that PG&E would have had to incur
1273
01:14:36.300 --> 01:14:39.720
"to improve the safety of the system regardless
1274
01:14:39.720 --> 01:14:42.710
"of whether or or not PG&G emerged from Chapter 11,
1275
01:14:42.710 --> 01:14:46.610
"pursuant to PG&E's plan are independent of the plan."
1276
01:14:50.060 --> 01:14:53.790
So what does that mean, if you understand that?
1277
01:14:55.240 --> 01:14:58.790
'Cause it sounds like the costs of these measures are not,
1278
01:14:58.790 --> 01:15:01.970
that they're independent of the plan or separate.
1279
01:15:26.000 --> 01:15:28.100
And I know that is Mr. Kenney's testimony.
1280
01:15:28.960 --> 01:15:33.050
I'm sorry, I'm not an expert in this area.
1281
01:15:33.050 --> 01:15:34.167
Okay, thank you.
1282
01:15:38.690 --> 01:15:42.180
I guess, so if I understood the answer,
1283
01:15:42.180 --> 01:15:44.860
to the extent you could answer the question,
1284
01:15:44.860 --> 01:15:47.510
the specific safety measures that are identified
1285
01:15:47.510 --> 01:15:50.790
in Chapter Six are not actually incorporated
1286
01:15:50.790 --> 01:15:52.310
into the plan specifically?
1287
01:15:57.850 --> 01:16:00.430
If I pick up the Plan of Reorganization and I read it,
1288
01:16:00.430 --> 01:16:05.340
am I gonna find anything about PSPS or system hardening?
1289
01:16:09.100 --> 01:16:11.220
The Wildfire Mitigation Plan
1290
01:16:11.220 --> 01:16:12.920
or the Plan of Reorganization?
1291
01:16:12.920 --> 01:16:14.170
Plan of Reorganization.
1292
01:16:17.490 --> 01:16:19.140
I haven't been at that level of detail
1293
01:16:19.140 --> 01:16:20.960
to know an answer to that question.
1294
01:16:21.860 --> 01:16:22.693
Okay, thank you.
1295
01:16:22.693 --> 01:16:23.600
Go ahead, Mr. Abrams.
1296
01:16:25.040 --> 01:16:26.190
Your Honor thank you.
1297
01:16:30.980 --> 01:16:35.880
Given that the bankruptcy and Plan of Reorganization
1298
01:16:37.090 --> 01:16:41.220
is in direct response to the fact
1299
01:16:41.220 --> 01:16:45.140
that we've had catastrophic wildfires for
1300
01:16:45.140 --> 01:16:50.140
which your organization is charged with creating a plan
1301
01:16:50.280 --> 01:16:55.280
to address, do you find it disconcerting that your efforts
1302
01:16:56.010 --> 01:16:58.600
are disconnected from the Plan of Reorganization?
1303
01:17:04.770 --> 01:17:09.340
I don't believe our efforts are disconnected
1304
01:17:09.340 --> 01:17:11.900
from the Plan of Reorganization.
1305
01:17:13.230 --> 01:17:17.630
What I can't speak to are the details of the treatment.
1306
01:17:21.540 --> 01:17:26.240
Sorry, Ms. Powell, so I'm trying to understand this here.
1307
01:17:27.805 --> 01:17:32.030
I'm trying, if you, who is in charge of the planning
1308
01:17:32.030 --> 01:17:36.530
for wildfire mitigation, don't know to what extent
1309
01:17:36.530 --> 01:17:38.970
it's incorporated in the Plan of Reorganization,
1310
01:17:41.020 --> 01:17:44.870
then it's hard for me to understand who would.
1311
01:17:46.131 --> 01:17:47.930
I mean, this is why, I mean, if there's some other person
1312
01:17:47.930 --> 01:17:50.230
that we haven't heard from yet today
1313
01:17:50.230 --> 01:17:54.390
about how wildfire mitigation is gonna be treated
1314
01:17:54.390 --> 01:17:57.510
differently going forward, then please let us know.
1315
01:17:57.510 --> 01:18:00.260
I would ask that we add them to the proceeding.
1316
01:18:00.260 --> 01:18:05.250
But I mean that's why, primarily why we're here.
1317
01:18:05.250 --> 01:18:07.150
So can you please address that?
1318
01:18:08.660 --> 01:18:10.370
Is there somebody else who can talk
1319
01:18:10.370 --> 01:18:14.050
to how wildfire mitigation is addressed
1320
01:18:14.050 --> 01:18:15.540
in the Plan of Reorganization?
1321
01:18:15.540 --> 01:18:16.990
Is there somebody we're missing?
1322
01:18:16.990 --> 01:18:18.274
Your Honor, can we go off the record
1323
01:18:18.274 --> 01:18:21.400
for a moment?
1324
01:18:21.400 --> 01:18:22.410
Well, let's see
1325
01:18:22.410 --> 01:18:26.580
if she can answer the question first, if she knows.
1326
01:18:27.670 --> 01:18:28.880
I can't.
1327
01:18:28.880 --> 01:18:30.800
Okay, do you still want
1328
01:18:30.800 --> 01:18:32.870
to have an off-the-record discussion, Mr. Manheim?
1329
01:18:32.870 --> 01:18:33.703
Yes.
1330
01:18:33.703 --> 01:18:34.590
Let's go off the record.
1331
01:18:34.590 --> 01:18:35.740
What is it Mr. Manheim?
1332
01:18:37.180 --> 01:18:40.210
So I would be happy to clarify statement
1333
01:18:40.210 --> 01:18:42.620
of counsel, what is in our plan of reorganization
1334
01:18:42.620 --> 01:18:43.470
and what is not.
1335
01:18:43.470 --> 01:18:47.360
Ms. Powell's testified she is not working
1336
01:18:47.360 --> 01:18:48.920
on the bankruptcy matter.
1337
01:18:48.920 --> 01:18:51.590
She hasn't reviewed our Plan of Reorganization.
1338
01:18:51.590 --> 01:18:54.957
So a series of questions that ask her about that,
1339
01:18:54.957 --> 01:18:56.460
we're not gonna get anywhere,
1340
01:18:56.460 --> 01:18:59.350
because her focus is on the operation.
1341
01:18:59.350 --> 01:19:00.210
It's not on---
1342
01:19:00.210 --> 01:19:01.900
So then let's go ahead and do that,
1343
01:19:01.900 --> 01:19:04.600
'cause she's basically answered my questions
1344
01:19:04.600 --> 01:19:07.960
and Mr. Abrams questions with, I don't know.
1345
01:19:07.960 --> 01:19:10.020
So go back on the record.
1346
01:19:10.020 --> 01:19:12.164
Mr. Manheim can make a statement of counsel.
1347
01:19:12.164 --> 01:19:14.630
Mr. Abrams before we go on the record do you
1348
01:19:14.630 --> 01:19:16.650
have something you wanted to add?
1349
01:19:16.650 --> 01:19:18.900
I do Your Honor, I guess procedurally,
1350
01:19:20.460 --> 01:19:23.580
if they're submitting testimony on Plan of Reorganization,
1351
01:19:25.300 --> 01:19:30.300
has nothing to do with Reorganization, then why's it there?
1352
01:19:31.810 --> 01:19:33.290
Why are they here?
1353
01:19:33.290 --> 01:19:34.990
Why are we considering this matter?
1354
01:19:34.990 --> 01:19:38.040
I mean, it's just they put it in the Plan of Reorganization,
1355
01:19:38.040 --> 01:19:39.520
the testimony around it.
1356
01:19:39.520 --> 01:19:41.940
It's the basis for this, I--
1357
01:19:41.940 --> 01:19:45.190
I think there is language in 1054
1358
01:19:45.190 --> 01:19:49.560
that has language that refers to wildfire safety,
1359
01:19:49.560 --> 01:19:51.720
mostly around safety history.
1360
01:19:51.720 --> 01:19:56.280
So my guess is that they put it into show that
1361
01:19:56.280 --> 01:19:59.310
that plan takes into consideration the safety history
1362
01:20:00.720 --> 01:20:05.720
of PG&E, because AB 1054 says the Commission has
1363
01:20:05.820 --> 01:20:08.090
to consider the safety history.
1364
01:20:08.090 --> 01:20:11.770
So that's what the law says.
1365
01:20:11.770 --> 01:20:14.200
It's a slightly odd thing,
1366
01:20:14.200 --> 01:20:17.010
because it means we're looking back, rather than your point,
1367
01:20:17.010 --> 01:20:19.440
which is how we were looking forward.
1368
01:20:20.843 --> 01:20:25.280
But since 1054 required, my guess as to why it's in here
1369
01:20:25.280 --> 01:20:28.220
is my take having looked at the Plan of Reorganization
1370
01:20:28.220 --> 01:20:30.990
is these measures are not in there.
1371
01:20:32.540 --> 01:20:35.550
The Plan of Reorganization doesn't address these things
1372
01:20:35.550 --> 01:20:38.820
and according to Mr. Kenney's testimony the costs
1373
01:20:38.820 --> 01:20:41.770
of these things are not actually really addressed
1374
01:20:41.770 --> 01:20:43.530
in the Plan of Reorganization.
1375
01:20:43.530 --> 01:20:48.340
So it is a slightly odd bit of testimony,
1376
01:20:48.340 --> 01:20:51.150
'cause it's like: What am I supposed to do with it?
1377
01:20:52.360 --> 01:20:57.300
That's my take, but I'm happy to hear from Mr. Manheim
1378
01:20:57.300 --> 01:20:58.280
before we go on the record.
1379
01:20:58.280 --> 01:20:59.720
Ms. Kelly?
1380
01:20:59.720 --> 01:21:03.950
Yes, yes Your Honor.
1381
01:21:03.950 --> 01:21:07.560
If the statement of counsel would also refer
1382
01:21:07.560 --> 01:21:12.560
to how this dovetails with Section 1.75 Fire Claims
1383
01:21:13.920 --> 01:21:15.360
of the Plan, because it does refer
1384
01:21:15.360 --> 01:21:17.850
to hazard litigation costs.
1385
01:21:17.850 --> 01:21:19.180
Well let's get too--
1386
01:21:19.180 --> 01:21:20.013
Well--
1387
01:21:20.013 --> 01:21:21.770
Let's not go too far in detail.
1388
01:21:21.770 --> 01:21:24.490
Let's at least get the statement of--
1389
01:21:24.490 --> 01:21:25.340
Thank you.
1390
01:21:26.280 --> 01:21:27.670
What Mr. Manheim was offering
1391
01:21:27.670 --> 01:21:29.720
and then if we need to go in more detail.
1392
01:21:29.720 --> 01:21:33.810
I also think that Mr. Kenney might be able to answer some
1393
01:21:33.810 --> 01:21:34.910
of these, 'cause he has the rates
1394
01:21:34.910 --> 01:21:38.990
and rate neutrality (mumbles) costs associated
1395
01:21:38.990 --> 01:21:41.390
with the wildfire Safety Measures.
1396
01:21:41.390 --> 01:21:44.880
Mr. Kenney would be the witness who could talk about that.
1397
01:21:47.500 --> 01:21:49.450
Does anyone I'm like totally off here?
1398
01:21:50.862 --> 01:21:53.250
(speaking off microphone)
1399
01:21:53.250 --> 01:21:54.581
Okay.
1400
01:21:54.581 --> 01:21:55.730
(speaking off microphone)
1401
01:21:55.730 --> 01:21:56.563
Okay.
1402
01:21:58.430 --> 01:22:01.930
(speaking off microphone)
1403
01:22:05.550 --> 01:22:06.860
You're right, 'cause this panel
1404
01:22:06.860 --> 01:22:09.540
doesn't actually know what's in the plan.
1405
01:22:09.540 --> 01:22:12.270
So 'cause it's not in the plan.
1406
01:22:12.270 --> 01:22:14.120
Their safety stuff's not in the plan.
1407
01:22:15.110 --> 01:22:18.900
So okay, let's go on the record.
1408
01:22:18.900 --> 01:22:20.460
Mr. Manheim, I believe you offered
1409
01:22:20.460 --> 01:22:22.600
to do a clarifying statement of counsel.
1410
01:22:22.600 --> 01:22:24.240
Yes, your Honor, thank you.
1411
01:22:24.240 --> 01:22:28.004
I think there's been some confusion about what
1412
01:22:28.004 --> 01:22:31.570
is in PG&E's Plan of Reorganization versus the testimony
1413
01:22:31.570 --> 01:22:35.700
that PG&E submitted in this proceeding and for what purpose.
1414
01:22:35.700 --> 01:22:39.920
PG&E's Plan of Reorganization is a defined document.
1415
01:22:39.920 --> 01:22:42.590
It is a plan that is before the bankruptcy court
1416
01:22:42.590 --> 01:22:44.540
and it addresses resolution of claims
1417
01:22:44.540 --> 01:22:46.230
in the bankruptcy court.
1418
01:22:46.230 --> 01:22:49.310
The plan itself does not incorporate
1419
01:22:50.760 --> 01:22:52.290
the Wildfire Mitigation Plan.
1420
01:22:52.290 --> 01:22:55.040
It does not include any costs
1421
01:22:55.040 --> 01:22:58.180
associated with PG&E's operations.
1422
01:22:58.180 --> 01:23:01.370
It solely addresses the resolution of claims
1423
01:23:01.370 --> 01:23:03.860
and the financing and the raising of capital
1424
01:23:03.860 --> 01:23:05.750
to pay those claims.
1425
01:23:05.750 --> 01:23:07.690
In this proceeding, the Commission
1426
01:23:07.690 --> 01:23:11.240
is addressing the standards in AB-1054
1427
01:23:11.240 --> 01:23:13.190
which requires the Commission to make a number
1428
01:23:13.190 --> 01:23:16.715
of findings with respect to that Plan of Reorganization.
1429
01:23:16.715 --> 01:23:21.715
And as in Ms. Powell's testimony on page 6-1,
1430
01:23:22.710 --> 01:23:26.680
as Mr. Alcantar, I believe, asked, it identifies a provision
1431
01:23:26.680 --> 01:23:30.460
of AB-1054 on page 6-1, line 20,
1432
01:23:30.460 --> 01:23:34.650
which is Public Utilities Code Section 3292(b)(1)(c),
1433
01:23:35.640 --> 01:23:38.900
which requires the Commission in evaluating
1434
01:23:38.900 --> 01:23:43.330
the Reorganization Plan and associated documents
1435
01:23:43.330 --> 01:23:47.810
to consider whether the resulting governance structure
1436
01:23:47.810 --> 01:23:51.650
is acceptable in light of the utility's safety history,
1437
01:23:51.650 --> 01:23:55.530
criminal probation, recent financial condition,
1438
01:23:55.530 --> 01:23:58.580
and other factors deemed relevant by the Commission.
1439
01:23:58.580 --> 01:24:01.610
It's in this respect that PG&E is offering testimony
1440
01:24:01.610 --> 01:24:05.930
about its Wildfire Mitigation Plan and it's ethics
1441
01:24:05.930 --> 01:24:08.840
and compliance program and it's risk program.
1442
01:24:09.710 --> 01:24:12.190
We've heard testimony from several witnesses,
1443
01:24:12.190 --> 01:24:17.190
these are all aspects of PG&E's proposal to the Commission
1444
01:24:17.380 --> 01:24:22.380
in how it will be improving its safety focus
1445
01:24:22.460 --> 01:24:24.370
and improving its culture.
1446
01:24:24.370 --> 01:24:26.650
And that is provided so that the Commission
1447
01:24:26.650 --> 01:24:30.110
can evaluate the Plan of Reorganization
1448
01:24:30.110 --> 01:24:32.600
with respect to these other programs.
1449
01:24:32.600 --> 01:24:34.890
We are not seeking cost recovery
1450
01:24:34.890 --> 01:24:37.850
of the Wildfire Mitigation Program as part
1451
01:24:37.850 --> 01:24:40.070
of the Commission's decision in this proceeding.
1452
01:24:40.070 --> 01:24:41.600
There are no costs associated
1453
01:24:41.600 --> 01:24:44.690
with wildfire mitigation in this proceeding.
1454
01:24:44.690 --> 01:24:47.750
The only costs addressed by the Plan of Reorganization
1455
01:24:47.750 --> 01:24:51.890
are the costs associated with wildfire claims
1456
01:24:51.890 --> 01:24:53.860
which are resolved through that proceeding.
1457
01:24:54.990 --> 01:24:56.520
Thank you, Mr. Manheim.
1458
01:24:56.520 --> 01:24:58.460
Mr. Abrams, is that clarifying?
1459
01:25:01.440 --> 01:25:02.540
Not really, Your Honor.
1460
01:25:02.540 --> 01:25:04.920
So here's my clarifying question
1461
01:25:04.920 --> 01:25:08.650
and whomever wants to answer it can.
1462
01:25:08.650 --> 01:25:11.720
But my clarifying request is this:
1463
01:25:11.720 --> 01:25:15.570
Unlike that characterization of the Plan of Reorganization,
1464
01:25:15.570 --> 01:25:19.092
part of what a Plan of Reorganization must show
1465
01:25:19.092 --> 01:25:22.090
is sound business judgment.
1466
01:25:22.090 --> 01:25:25.860
And it's a forward-looking description
1467
01:25:25.860 --> 01:25:28.400
of what that business judgment is
1468
01:25:28.400 --> 01:25:30.270
and that is a foundational principal
1469
01:25:30.270 --> 01:25:32.120
of the Plan of Reorganization.
1470
01:25:32.120 --> 01:25:35.890
Similarly, that aligns to what the Commission is looking at,
1471
01:25:35.890 --> 01:25:37.810
which is the safety culture,
1472
01:25:37.810 --> 01:25:41.090
which is being able to have a plan that demonstrates
1473
01:25:41.090 --> 01:25:43.860
that functionally, looking forward,
1474
01:25:43.860 --> 01:25:45.700
that we're actually gonna have a safety culture
1475
01:25:45.700 --> 01:25:48.030
within PG&E that's responsive,
1476
01:25:48.030 --> 01:25:50.750
that's different from what led them into bankruptcy.
1477
01:25:50.750 --> 01:25:52.880
So all of this is very relevant
1478
01:25:52.880 --> 01:25:55.130
and I don't see it described in this section.
1479
01:25:57.420 --> 01:25:59.890
Well, I have to say the Commission's
1480
01:25:59.890 --> 01:26:01.520
Safety Culture proceeding
1481
01:26:01.520 --> 01:26:03.870
did get somewhat interrupted by the bankruptcy.
1482
01:26:06.913 --> 01:26:10.130
Well, given that, I'm not sure you're gonna get much
1483
01:26:11.650 --> 01:26:13.730
of what you're looking for from this panel.
1484
01:26:13.730 --> 01:26:17.590
If you have some specific questions, feel free to ask them,
1485
01:26:17.590 --> 01:26:21.450
but otherwise we may need to move along.
1486
01:26:21.450 --> 01:26:26.170
And I think certainly in any briefing you do on this topic,
1487
01:26:26.170 --> 01:26:28.590
you're certainly welcome to use the statement
1488
01:26:28.590 --> 01:26:32.110
of Mr. Manheim and the answers you got from these witnesses
1489
01:26:33.540 --> 01:26:36.780
to make whatever arguments you want regarding the adequacy
1490
01:26:37.671 --> 01:26:41.450
of either the testimony and/or the Plan of Reorganization.
1491
01:26:41.450 --> 01:26:42.950
But I'm not sure you're gonna actually get
1492
01:26:42.950 --> 01:26:44.620
much more on cross-examination.
1493
01:26:45.640 --> 01:26:48.410
I will, I will try.
1494
01:26:48.410 --> 01:26:50.300
So if I can have a little more time, please.
1495
01:26:50.300 --> 01:26:52.380
Try briefly. (chuckling)
1496
01:26:52.380 --> 01:26:56.520
Okay, um, I think I did, for this panel, have anyway,
1497
01:26:56.520 --> 01:26:59.590
but, I will try to move this as quickly as possible.
1498
01:26:59.590 --> 01:27:04.590
So, Ms. Powell, continuing along with your analogy
1499
01:27:04.610 --> 01:27:09.610
of the car, I appreciate that and what I wanna understand
1500
01:27:11.470 --> 01:27:14.360
is what are those things within your plan
1501
01:27:14.360 --> 01:27:17.210
that are like my car that are gonna be based
1502
01:27:17.210 --> 01:27:20.640
on telemetry-type devices and provide some of
1503
01:27:20.640 --> 01:27:25.280
that smart grid development over the future and looking
1504
01:27:25.280 --> 01:27:28.342
into the future and what is going to entail
1505
01:27:28.342 --> 01:27:32.030
with that type of intelligence looking forward?
1506
01:27:35.320 --> 01:27:36.420
I can take that one.
1507
01:27:37.390 --> 01:27:40.260
Our Wildfire Mitigation Plan has a lot more detail
1508
01:27:40.260 --> 01:27:43.480
on emerging technologies or alternative technologies
1509
01:27:43.480 --> 01:27:45.420
that we're leveraging in our system
1510
01:27:45.420 --> 01:27:47.740
to help inform the wildfire risk
1511
01:27:47.740 --> 01:27:50.290
and further reduce that wildfire risk.
1512
01:27:50.290 --> 01:27:54.170
And so, while there's only a little bit mentioned here,
1513
01:27:54.170 --> 01:27:56.160
of course, Mr. Abrams, you're aware
1514
01:27:56.160 --> 01:27:58.300
of our extensive Wildfire Mitigation Plan
1515
01:27:58.300 --> 01:28:00.990
that was filed last month, in February,
1516
01:28:00.990 --> 01:28:03.080
where we talk about technologies
1517
01:28:03.080 --> 01:28:05.430
ranging from commercially available
1518
01:28:05.430 --> 01:28:09.070
that we are installing on our system, piloting our system,
1519
01:28:09.070 --> 01:28:14.070
to the R&D phase, right, or in the research phase
1520
01:28:15.120 --> 01:28:19.410
of just learning about how certain tools could be leveraged
1521
01:28:19.410 --> 01:28:22.100
to understand our system even better
1522
01:28:22.100 --> 01:28:23.710
and further reduce the risk.
1523
01:28:23.710 --> 01:28:27.940
So as you talk about telemetry and those kind
1524
01:28:27.940 --> 01:28:31.770
of intelligence tools, we have a section on that.
1525
01:28:31.770 --> 01:28:34.790
There are also areas of predictive modeling
1526
01:28:34.790 --> 01:28:38.370
that we are using the data streams that we currently have
1527
01:28:38.370 --> 01:28:41.350
to give us an earlier alarm bell that something
1528
01:28:41.350 --> 01:28:44.480
on our system may not be working correctly
1529
01:28:44.480 --> 01:28:47.630
and gives us extra insight to go repair that piece
1530
01:28:47.630 --> 01:28:50.640
of equipment or identify if a replacement is necessary.
1531
01:28:50.640 --> 01:28:52.260
So we can talk in more detail,
1532
01:28:52.260 --> 01:28:54.220
if you're interested in particular ones,
1533
01:28:54.220 --> 01:28:58.030
but we've outlined the asset replacement activities
1534
01:28:58.030 --> 01:29:00.290
like grid hardening, the inspection program,
1535
01:29:00.290 --> 01:29:02.960
which provides visual, either through photos
1536
01:29:02.960 --> 01:29:07.400
or the naked eye, and then we're also exploring
1537
01:29:07.400 --> 01:29:10.120
those advanced technologies or alternative technologies
1538
01:29:10.120 --> 01:29:12.720
to make the grid and our understanding of it better.
1539
01:29:13.560 --> 01:29:14.393
Thank you.
1540
01:29:19.600 --> 01:29:21.740
So I'm just looking through my questions here
1541
01:29:21.740 --> 01:29:23.740
to make sure I understand which still apply,
1542
01:29:23.740 --> 01:29:26.690
given the back and forth that we just had.
1543
01:29:33.350 --> 01:29:37.063
So Ms. Kasnitz earlier asked regarding
1544
01:29:38.900 --> 01:29:43.900
how you assess the risks associated with the power shutoffs
1545
01:29:47.430 --> 01:29:50.970
and the risks that PG&E faces with that
1546
01:29:50.970 --> 01:29:55.270
and comparatively look at what the risks are
1547
01:29:55.270 --> 01:29:58.310
to shutting off the power and what a resident might do
1548
01:29:58.310 --> 01:30:03.310
to start a fire or cause an ignition.
1549
01:30:05.810 --> 01:30:10.390
Can you help us understand how you quantify that?
1550
01:30:10.390 --> 01:30:15.390
How do you quantify your risk versus the risk
1551
01:30:15.490 --> 01:30:18.170
of the public starting a fire?
1552
01:30:21.740 --> 01:30:24.990
PG&E does not have a formula by which we attempt
1553
01:30:24.990 --> 01:30:27.640
to quantify either the risk
1554
01:30:27.640 --> 01:30:30.830
of the catastrophic fire versus public safety risk.
1555
01:30:30.830 --> 01:30:33.540
We're focused on mitigating both aspects
1556
01:30:33.540 --> 01:30:35.800
of that risk to the best of our abilities.
1557
01:30:37.890 --> 01:30:40.860
So given that that's not a quantified estimate
1558
01:30:40.860 --> 01:30:44.240
where it's 20% risk for PG&E,
1559
01:30:44.240 --> 01:30:46.780
but 10% risk for the public,
1560
01:30:46.780 --> 01:30:49.510
and therefore, you make a decision based on that,
1561
01:30:50.910 --> 01:30:55.000
can you please tell us how you evaluate that, I guess,
1562
01:30:55.000 --> 01:30:59.130
in a very subjective way, to determine what those risks are?
1563
01:30:59.130 --> 01:31:00.840
How do how do you determine that?
1564
01:31:01.890 --> 01:31:04.420
I wouldn't characterize it as subjective.
1565
01:31:04.420 --> 01:31:09.230
Our evaluation of the potential risk of catastrophic fire
1566
01:31:09.230 --> 01:31:13.510
during these high-risk weather events is data-driven.
1567
01:31:13.510 --> 01:31:16.990
It is based on essentially two main factors,
1568
01:31:16.990 --> 01:31:21.610
the potential for what we call our outage-producing winds,
1569
01:31:21.610 --> 01:31:24.570
a wind to cause an outage on our system,
1570
01:31:24.570 --> 01:31:27.500
which is essentially a proxy for a potential ignition,
1571
01:31:27.500 --> 01:31:31.780
along with the potential for, should an ignition occur,
1572
01:31:31.780 --> 01:31:34.700
a fire to spread catastrophically.
1573
01:31:34.700 --> 01:31:37.490
We measure that on what we call our fire potential index.
1574
01:31:37.490 --> 01:31:41.280
Both of these are described in our Wildfire Mitigation Plan.
1575
01:31:41.280 --> 01:31:44.790
Our meteorology and fire science team is monitoring
1576
01:31:44.790 --> 01:31:48.640
the conditions of weather forecasts constantly, even now,
1577
01:31:48.640 --> 01:31:50.760
especially during wildfire season,
1578
01:31:50.760 --> 01:31:54.520
for the potential concurrence of those two factors
1579
01:31:54.520 --> 01:31:57.850
and when they do occur on the forecast and currently,
1580
01:31:57.850 --> 01:32:01.260
is when we start to evaluate initiation of a PSPS event.
1581
01:32:02.370 --> 01:32:04.240
Given the potential scope of that event,
1582
01:32:04.240 --> 01:32:06.700
as I mentioned before, we started doing our outreach
1583
01:32:06.700 --> 01:32:09.920
to the city and county officials and public safety partners
1584
01:32:09.920 --> 01:32:12.380
to make them both aware of the potential event
1585
01:32:12.380 --> 01:32:14.790
and to gather information on what impacts
1586
01:32:14.790 --> 01:32:16.680
may occur as a result of de-energization.
1587
01:32:16.680 --> 01:32:18.250
Thank you.
1588
01:32:18.250 --> 01:32:21.250
It's really the assessment that I'm trying to focus on here.
1589
01:32:22.180 --> 01:32:25.200
And so the criteria that you just described
1590
01:32:26.610 --> 01:32:31.590
are the same criteria for PG&E as it is for the public.
1591
01:32:31.590 --> 01:32:34.840
So if you just described the wind and weather and all
1592
01:32:34.840 --> 01:32:38.680
of those things are gonna exist where my home is located
1593
01:32:40.130 --> 01:32:42.470
and where the power line is above my home.
1594
01:32:43.870 --> 01:32:48.250
So my question is, is how are you assessing
1595
01:32:48.250 --> 01:32:53.250
the relative risk of PG&E versus the public?
1596
01:32:54.310 --> 01:32:57.540
So what are those measures that you look at?
1597
01:32:57.540 --> 01:33:01.600
So the measure of, you know, someone running out
1598
01:33:01.600 --> 01:33:05.560
and generators and looking at the statistics associated
1599
01:33:05.560 --> 01:33:08.910
with what is the likelihood of a generator-caused fire
1600
01:33:08.910 --> 01:33:11.840
or a campfire that somebody's trying
1601
01:33:11.840 --> 01:33:13.670
to cook their food before the food goes bad
1602
01:33:13.670 --> 01:33:16.630
in their refrigerator, all sorts of risks
1603
01:33:16.630 --> 01:33:20.850
associated with the public during power shutoffs.
1604
01:33:22.300 --> 01:33:24.780
So how, you know, none of what you described there
1605
01:33:24.780 --> 01:33:25.613
gets to that.
1606
01:33:25.613 --> 01:33:29.320
How do you take those factors into consideration,
1607
01:33:29.320 --> 01:33:31.890
based on the events that you have before you,
1608
01:33:31.890 --> 01:33:33.140
for a particular shutoff?
1609
01:33:38.660 --> 01:33:42.450
PG&E is not attempting to ensure
1610
01:33:42.450 --> 01:33:46.840
that the public broadly does not create fire risk.
1611
01:33:46.840 --> 01:33:50.910
I think that is an onus of ours to ensure
1612
01:33:50.910 --> 01:33:53.940
that our equipment does not ignite fires.
1613
01:33:53.940 --> 01:33:58.340
We do work to educate our customers on potential fire risks
1614
01:33:58.340 --> 01:34:00.090
associated with de-energization,
1615
01:34:00.090 --> 01:34:03.110
largely around generator use.
1616
01:34:03.110 --> 01:34:07.050
But, we do rely on our local officials, CAL FIRE
1617
01:34:07.050 --> 01:34:09.660
and other firefighting agencies to broadly ensure
1618
01:34:09.660 --> 01:34:13.040
that the public is aware, even outside of de-energization,
1619
01:34:13.040 --> 01:34:16.180
of the potential of fires in California
1620
01:34:16.180 --> 01:34:18.250
being sparked from a variety of sources.
1621
01:34:22.700 --> 01:34:26.500
So given that, those risks are not calculated
1622
01:34:26.500 --> 01:34:29.160
or known to PG&E are not factored in.
1623
01:34:30.120 --> 01:34:33.740
Are you not concerned, as a customer
1624
01:34:33.740 --> 01:34:37.040
or someone who's living in PG&E territory,
1625
01:34:37.040 --> 01:34:39.540
that given that you're only assessing one side
1626
01:34:39.540 --> 01:34:43.130
of the equation, which are the risks to PG&E
1627
01:34:44.230 --> 01:34:48.130
or the risks that PG&E could cause and not the other side
1628
01:34:48.130 --> 01:34:53.130
of the equation that there could be a extreme weather event
1629
01:34:53.450 --> 01:34:56.990
where it actually would be better,
1630
01:34:56.990 --> 01:34:59.460
might be still risky for PG&E, to some extent,
1631
01:34:59.460 --> 01:35:01.960
but the risks are higher for the public
1632
01:35:01.960 --> 01:35:04.190
in terms of what their actions are
1633
01:35:04.190 --> 01:35:06.390
and that you're not looking at that at all?
1634
01:35:06.390 --> 01:35:08.010
Is that not a concern of yours?
1635
01:35:10.070 --> 01:35:11.650
I don't think it's a fair characterization
1636
01:35:11.650 --> 01:35:13.540
to say that we're not looking at it at all.
1637
01:35:13.540 --> 01:35:16.830
I think that our outreach campaigns and education
1638
01:35:16.830 --> 01:35:19.430
around fire season awareness and partnership
1639
01:35:19.430 --> 01:35:22.780
with local fire councils point to us recognizing
1640
01:35:22.780 --> 01:35:24.880
that fire risk needs to be recognized
1641
01:35:24.880 --> 01:35:26.340
broadly across California.
1642
01:35:27.490 --> 01:35:30.970
But our focus during PSPS events is to ensure
1643
01:35:30.970 --> 01:35:34.150
that our assets do not ignite a catastrophic fire.
1644
01:35:37.750 --> 01:35:41.870
Mr. Pender, you mentioned in your testimony a little bit
1645
01:35:41.870 --> 01:35:45.630
earlier that you have a quality assurance program
1646
01:35:46.784 --> 01:35:48.984
and that you have a quality control program.
1647
01:35:49.860 --> 01:35:52.300
That's a little different than my understanding.
1648
01:35:52.300 --> 01:35:54.400
So can you help me understand what makes
1649
01:35:54.400 --> 01:35:56.180
a quality assurance program
1650
01:35:56.180 --> 01:35:57.740
and a quality control program
1651
01:35:57.740 --> 01:35:59.380
and how those are different?
1652
01:35:59.380 --> 01:36:02.900
So as it relates to our vegetation management programs,
1653
01:36:02.900 --> 01:36:04.890
we have quality assurance programs
1654
01:36:05.790 --> 01:36:08.050
for both our routine vegetation management
1655
01:36:08.050 --> 01:36:11.910
and our enhanced vegetation management.
1656
01:36:11.910 --> 01:36:16.190
Those quality assurance programs take a sample
1657
01:36:16.190 --> 01:36:19.060
of the work that we've performed or of the areas
1658
01:36:19.060 --> 01:36:23.750
in our system and assess those locations
1659
01:36:25.740 --> 01:36:28.900
from just comparing the vegetation
1660
01:36:28.900 --> 01:36:31.510
in those areas as compared to our standards
1661
01:36:31.510 --> 01:36:33.850
or the regulatory requirements.
1662
01:36:33.850 --> 01:36:38.330
And so, regardless of how recently those areas were worked
1663
01:36:38.330 --> 01:36:42.370
or who performed the work, that quality assurance assessment
1664
01:36:42.370 --> 01:36:44.540
is trying to assess the entire process,
1665
01:36:44.540 --> 01:36:49.050
our whole process of activity, to see if the outcomes
1666
01:36:49.050 --> 01:36:52.820
in our system match what we desire, right.
1667
01:36:52.820 --> 01:36:55.440
And so was the process successful
1668
01:36:55.440 --> 01:36:56.570
in giving us what we wanted,
1669
01:36:56.570 --> 01:36:58.420
in the terms of routine veg management.
1670
01:36:58.420 --> 01:37:00.580
Are the trees far enough away from our lines
1671
01:37:00.580 --> 01:37:03.900
to not violate the minimum compliance requirements?
1672
01:37:03.900 --> 01:37:07.840
Quality control is much closer to the performance
1673
01:37:07.840 --> 01:37:11.040
of the work, and is assessing did each person
1674
01:37:11.040 --> 01:37:14.150
in the process do what their job was.
1675
01:37:14.150 --> 01:37:17.190
So did the pre-inspector identify the right trees
1676
01:37:17.190 --> 01:37:18.360
to then be trimmed?
1677
01:37:18.360 --> 01:37:22.080
Did the tree trimming company trim the trees
1678
01:37:22.080 --> 01:37:24.740
or remove the trees to our standard
1679
01:37:24.740 --> 01:37:26.700
and in the way that they were instructed?
1680
01:37:26.700 --> 01:37:31.130
And so the quality control, also called work verification
1681
01:37:31.130 --> 01:37:33.480
for our enhanced vegetation management program,
1682
01:37:33.480 --> 01:37:37.960
is the caboose behind our work process,
1683
01:37:37.960 --> 01:37:41.150
behind our tree trimmers doing the work, our QC,
1684
01:37:41.150 --> 01:37:43.510
or work verification inspectors,
1685
01:37:43.510 --> 01:37:46.640
are following right behind them to check the work
1686
01:37:46.640 --> 01:37:48.510
and make sure that things were performed
1687
01:37:48.510 --> 01:37:50.860
and each person did their job correctly.
1688
01:37:50.860 --> 01:37:55.740
So together those two activities, the kind of similar
1689
01:37:55.740 --> 01:37:59.820
and related, provide us a more robust perspective
1690
01:37:59.820 --> 01:38:01.930
on the performance of our process.
1691
01:38:01.930 --> 01:38:05.550
QC provides us an insight into are people
1692
01:38:05.550 --> 01:38:08.510
in the process doing the right things and QA tries
1693
01:38:08.510 --> 01:38:10.300
to provide a higher level perspective
1694
01:38:10.300 --> 01:38:13.180
is the overall process getting us the outcomes we want.
1695
01:38:14.160 --> 01:38:16.410
Okay, so the traditional description
1696
01:38:16.410 --> 01:38:19.550
of a quality control as a measuring tool
1697
01:38:19.550 --> 01:38:21.290
and the measure is not something
1698
01:38:21.290 --> 01:38:25.180
that PG&E considers a quality control?
1699
01:38:25.180 --> 01:38:26.530
You look at it differently?
1700
01:38:27.620 --> 01:38:29.380
I don't understand the question, sorry.
1701
01:38:29.380 --> 01:38:34.380
So quality control, in a total quality management plan,
1702
01:38:35.460 --> 01:38:39.420
is typically the tool that you're measuring with,
1703
01:38:39.420 --> 01:38:41.640
the monitoring tool, if you will,
1704
01:38:41.640 --> 01:38:46.110
along with the measure that you are looking at,
1705
01:38:46.110 --> 01:38:51.110
wind speed or system hardening or whatever that measure
1706
01:38:51.700 --> 01:38:54.650
is and so that's the quality control
1707
01:38:54.650 --> 01:38:57.630
that's part of your quality assurance program.
1708
01:38:59.310 --> 01:39:01.720
So are you saying that the quality controls
1709
01:39:01.720 --> 01:39:03.700
that you're talking about are not part
1710
01:39:03.700 --> 01:39:06.690
of your quality assurance program,
1711
01:39:06.690 --> 01:39:08.720
like a total quality management plan?
1712
01:39:12.370 --> 01:39:16.320
We would consider our overall quality program
1713
01:39:16.320 --> 01:39:19.310
to include our quality control efforts
1714
01:39:19.310 --> 01:39:23.090
and our quality assurance process programs,
1715
01:39:24.080 --> 01:39:26.960
as our comprehensive view of quality,
1716
01:39:26.960 --> 01:39:29.580
particularly in the space of enhanced vegetation management.
1717
01:39:29.580 --> 01:39:33.520
So QC, as I outlined previously,
1718
01:39:33.520 --> 01:39:36.450
QC being more narrowly focused on each piece
1719
01:39:36.450 --> 01:39:38.600
of the puzzle doing its job
1720
01:39:38.600 --> 01:39:41.040
and QA looking over all of the process.
1721
01:39:43.130 --> 01:39:46.440
How do you ensure PSPS notifications are effective?
1722
01:39:52.620 --> 01:39:55.000
Our goal is to ensure that customers are notified
1723
01:39:55.000 --> 01:39:57.930
in advance of events and we strive
1724
01:39:57.930 --> 01:40:00.270
to provide as clear communication
1725
01:40:00.270 --> 01:40:02.500
about the potential timing and impacts
1726
01:40:02.500 --> 01:40:04.400
of the events in those communications.
1727
01:40:05.250 --> 01:40:08.460
We did learn coming out of the large-scale events
1728
01:40:08.460 --> 01:40:12.340
that we conducted last year, we received a lot of feedback
1729
01:40:12.340 --> 01:40:16.390
on how to improve those and our customer organization
1730
01:40:16.390 --> 01:40:18.270
has been reaching out to customers
1731
01:40:18.270 --> 01:40:20.169
in a variety of different ways to get
1732
01:40:20.169 --> 01:40:21.002
(coughing drowns out speaker)
1733
01:40:21.002 --> 01:40:22.900
on what kinds of information they want
1734
01:40:22.900 --> 01:40:24.420
to see in those notifications.
1735
01:40:25.780 --> 01:40:29.380
Some of those venues include customer focus groups
1736
01:40:29.380 --> 01:40:31.720
across the service territory to get direct feedback
1737
01:40:31.720 --> 01:40:35.900
about their experience and working through sort of,
1738
01:40:35.900 --> 01:40:37.770
you know, sessions with customers, again,
1739
01:40:37.770 --> 01:40:41.290
so that we can work to improve the process of notifications
1740
01:40:41.290 --> 01:40:43.880
and the information that we're providing accordingly.
1741
01:40:50.440 --> 01:40:53.500
Earlier you indicated that you're not sure
1742
01:40:53.500 --> 01:40:56.910
what the next wildfire season will hold.
1743
01:40:59.420 --> 01:41:02.590
As PG&E's looking ahead to this wildfire season
1744
01:41:03.690 --> 01:41:07.150
and given the fact that, at least from what I've looked at,
1745
01:41:07.150 --> 01:41:11.563
the precipitation levels for February are record lows,
1746
01:41:15.000 --> 01:41:18.320
what is your expectation about the risks
1747
01:41:18.320 --> 01:41:20.190
going into this wildfire season?
1748
01:41:22.820 --> 01:41:25.490
I'm not a meteorologist, so I can't prognosticate
1749
01:41:25.490 --> 01:41:28.070
on what fire season's going to look like.
1750
01:41:29.510 --> 01:41:30.800
I agree with you, I'm concerned
1751
01:41:30.800 --> 01:41:33.500
that we haven't had as much precipitation as we would like.
1752
01:41:33.500 --> 01:41:36.360
I was encouraged by seeing a little bit over the weekend.
1753
01:41:36.360 --> 01:41:40.570
Dryness is one factor, the amount of fuels available
1754
01:41:40.570 --> 01:41:45.140
to potentially contribute to a catastrophic fire
1755
01:41:45.140 --> 01:41:48.150
is another aspect and then just the number
1756
01:41:48.150 --> 01:41:49.620
of wind events that come through,
1757
01:41:49.620 --> 01:41:53.420
which we have no visibility into the potential of.
1758
01:41:53.420 --> 01:41:55.660
So it's hard to come up with even a guess.
1759
01:41:57.004 --> 01:41:58.460
I don't know that you could pin any meteorologist
1760
01:41:58.460 --> 01:42:00.630
down right now with an estimate
1761
01:42:00.630 --> 01:42:02.380
of what the season would look like.
1762
01:42:08.080 --> 01:42:10.110
So with your first iteration
1763
01:42:10.110 --> 01:42:11.770
of the Wildfire Mitigation Plan,
1764
01:42:11.770 --> 01:42:15.010
you filed a second amendment to that plan
1765
01:42:15.010 --> 01:42:17.490
and in that second amendment, among other things,
1766
01:42:17.490 --> 01:42:21.740
you changed targets, you crossed out results
1767
01:42:21.740 --> 01:42:26.740
as the basis for how you would assess vegetation management.
1768
01:42:27.218 --> 01:42:31.110
And the Commission did not move forward with that amendment,
1769
01:42:32.050 --> 01:42:33.800
but through that process,
1770
01:42:33.800 --> 01:42:37.150
it seemed that right before wildfire season
1771
01:42:38.580 --> 01:42:40.820
there was a changing of the goalposts.
1772
01:42:42.210 --> 01:42:45.910
How do we ensure through the Plan of Reorganization
1773
01:42:45.910 --> 01:42:49.170
and through a course correction for PG&E
1774
01:42:49.170 --> 01:42:53.460
that what you talk about in your testimony
1775
01:42:54.530 --> 01:42:59.530
and the specifics within the Wildfire Mitigation Plan
1776
01:42:59.560 --> 01:43:04.560
are things that we can count on versus things that we will
1777
01:43:04.570 --> 01:43:07.600
have a change right before we go into wildfire season,
1778
01:43:07.600 --> 01:43:11.220
depending upon how risky you
1779
01:43:11.220 --> 01:43:13.680
then assessed the season's going to be?
1780
01:43:15.640 --> 01:43:20.370
So that's a important topic,
1781
01:43:20.370 --> 01:43:23.500
which is continuous improvement and therefore,
1782
01:43:23.500 --> 01:43:26.990
some evolution and change in our tactics
1783
01:43:26.990 --> 01:43:28.440
and activities as it relates
1784
01:43:28.440 --> 01:43:30.710
to the Wildfire Mitigation Plan.
1785
01:43:32.120 --> 01:43:34.810
So as you mentioned, last year,
1786
01:43:34.810 --> 01:43:37.350
between when we filed our initial plan on February 6th
1787
01:43:37.350 --> 01:43:40.300
and when we filed our second amendment on April 25th,
1788
01:43:40.300 --> 01:43:43.350
I believe, we already began to learn some things
1789
01:43:43.350 --> 01:43:46.860
about how different activities were playing out in the field
1790
01:43:46.860 --> 01:43:48.440
and what would be effective
1791
01:43:48.440 --> 01:43:51.750
or less effective in mitigating wildfire risk.
1792
01:43:51.750 --> 01:43:54.620
And so our second amendment last year
1793
01:43:54.620 --> 01:43:57.320
reflected our latest and greatest insight
1794
01:43:57.320 --> 01:44:00.800
into how we would perform our activities.
1795
01:44:00.800 --> 01:44:04.250
As, if you compare our 2019 Wildfire Safety Plan
1796
01:44:04.250 --> 01:44:07.520
to our 2020 Wildfire Mitigation Plan, you see evolution
1797
01:44:07.520 --> 01:44:11.500
in a number of our programs and continuous learning,
1798
01:44:11.500 --> 01:44:15.780
PSPS being a big factor there, or a big area
1799
01:44:15.780 --> 01:44:18.570
where we've added additional programs and activities.
1800
01:44:18.570 --> 01:44:23.570
And so, we all are on this continuous improvement
1801
01:44:27.390 --> 01:44:29.470
and continuous learning journey together
1802
01:44:29.470 --> 01:44:34.470
and so that's what you should take from that process, right,
1803
01:44:34.840 --> 01:44:36.630
the fact that we filed a second amendment,
1804
01:44:36.630 --> 01:44:39.240
the fact that we continue to move forward
1805
01:44:39.240 --> 01:44:43.960
and learn from what we did in 2019 to inform our 2020 plan.
1806
01:44:43.960 --> 01:44:47.050
So--
Sorry, my question,
1807
01:44:47.050 --> 01:44:52.050
if I can, is really around the trust gap.
1808
01:44:53.270 --> 01:44:58.270
So we've had horrific wildfire seasons.
1809
01:44:59.360 --> 01:45:03.110
We've had plans provided by PG&E
1810
01:45:03.110 --> 01:45:06.720
that were changed right before wildfire season.
1811
01:45:08.190 --> 01:45:11.120
For the public to be able to look for the Commission
1812
01:45:11.120 --> 01:45:13.910
to be able to look at your Wildfire Mitigation Plan
1813
01:45:13.910 --> 01:45:18.260
and count on it for how PG&E's going to respond
1814
01:45:18.260 --> 01:45:22.300
in wildfire season, as opposed to changing the goalposts,
1815
01:45:22.300 --> 01:45:26.180
how can we trust, how can we have confidence that a plan
1816
01:45:26.180 --> 01:45:30.860
of reorganization is not gonna produce changing goalposts,
1817
01:45:30.860 --> 01:45:34.720
is not gonna produce, you know,
1818
01:45:34.720 --> 01:45:36.320
how is there gonna be accountability,
1819
01:45:36.320 --> 01:45:37.830
if you can change the goalposts.
1820
01:45:37.830 --> 01:45:40.970
How is the Commission gonna understand that and the public?
1821
01:45:40.970 --> 01:45:45.970
So accountability and continuous improvement
1822
01:45:50.130 --> 01:45:54.170
can go together as part of an ongoing partnership
1823
01:45:55.650 --> 01:45:59.620
and evolution between PG&E and our regulators
1824
01:45:59.620 --> 01:46:03.640
and our public and partners, stakeholders like yourself.
1825
01:46:03.640 --> 01:46:08.320
And so we were very transparent through the 2019 process,
1826
01:46:08.320 --> 01:46:10.090
Wildfire Safety Plan process,
1827
01:46:10.090 --> 01:46:12.630
about what we were learning and where we were at.
1828
01:46:12.630 --> 01:46:14.470
The second amendment was not adopted.
1829
01:46:14.470 --> 01:46:15.890
We didn't change the goalposts.
1830
01:46:15.890 --> 01:46:18.470
We continued to report our performance
1831
01:46:18.470 --> 01:46:21.340
against the original goalposts, if you will,
1832
01:46:21.340 --> 01:46:24.340
the original targets expressed in our Wildfire Safety Plan
1833
01:46:24.340 --> 01:46:26.960
and there are expected to be, you know,
1834
01:46:26.960 --> 01:46:29.490
independent evaluator process and such
1835
01:46:29.490 --> 01:46:33.240
to evaluate how the utilities did,
1836
01:46:33.240 --> 01:46:35.630
including PG&E, against our plan.
1837
01:46:35.630 --> 01:46:40.630
So we appreciate the trust gap that you mentioned
1838
01:46:40.800 --> 01:46:45.220
and the challenge with helping all
1839
01:46:45.220 --> 01:46:48.500
of those stakeholders understand what we're working
1840
01:46:48.500 --> 01:46:51.030
towards and why those are the right things to work towards.
1841
01:46:51.030 --> 01:46:53.350
That's what the 2020 Wildfire Mitigation Plan
1842
01:46:53.350 --> 01:46:55.169
proceeding is all about,
1843
01:46:55.169 --> 01:46:56.900
making sure that we're pursuing the right activities.
1844
01:46:56.900 --> 01:47:01.190
So what I would say is that our objectives
1845
01:47:01.190 --> 01:47:04.440
and the focus that we have on reducing wildfire risk
1846
01:47:04.440 --> 01:47:07.550
and reducing the risk of PSPS remains unwavering
1847
01:47:07.550 --> 01:47:10.210
and that will be what you see
1848
01:47:10.210 --> 01:47:14.380
and see consistent action towards.
1849
01:47:14.380 --> 01:47:15.780
But, I do think you'll see
1850
01:47:15.780 --> 01:47:17.630
continuous evolution and improvement.
1851
01:47:17.630 --> 01:47:20.900
It would be imprudent for us not to continue
1852
01:47:20.900 --> 01:47:25.340
to learn lessons and adjust, as necessary and we'll continue
1853
01:47:25.340 --> 01:47:26.750
to do that in a transparent way
1854
01:47:26.750 --> 01:47:28.360
through these public proceedings,
1855
01:47:28.360 --> 01:47:30.590
that it includes stakeholder input.
1856
01:47:30.590 --> 01:47:32.293
Okay, thank you.
1857
01:47:32.293 --> 01:47:34.793
I've got two more questions and then I'll be done.
1858
01:47:40.040 --> 01:47:43.720
Are you aware of the implications of your work
1859
01:47:44.920 --> 01:47:49.070
on the insurance rates of homeowners?
1860
01:47:53.180 --> 01:47:57.340
A bit, but we're far from experts on this.
1861
01:47:57.340 --> 01:48:00.500
I've participated in some panels
1862
01:48:00.500 --> 01:48:02.970
and conferences at the state level,
1863
01:48:02.970 --> 01:48:05.700
in particular, with representatives
1864
01:48:05.700 --> 01:48:07.610
from the State Insurance Commission
1865
01:48:08.900 --> 01:48:10.810
and there's been much discussion about this,
1866
01:48:10.810 --> 01:48:15.570
but it's not something that we're experts on
1867
01:48:15.570 --> 01:48:18.610
or have any input on, in particular.
1868
01:48:20.921 --> 01:48:25.240
Okay, so in terms of the implications though,
1869
01:48:25.240 --> 01:48:27.040
I just wanna try to understand
1870
01:48:27.040 --> 01:48:28.720
if you understand the implications.
1871
01:48:28.720 --> 01:48:33.170
So there are wildfire survivors, victims,
1872
01:48:33.170 --> 01:48:38.170
who are rebuilding their homes from the PG&E wildfires
1873
01:48:39.140 --> 01:48:41.880
and they wanna understand is that investment,
1874
01:48:42.890 --> 01:48:46.360
that significant family investment,
1875
01:48:46.360 --> 01:48:49.170
going to be a one-year investment
1876
01:48:49.170 --> 01:48:52.760
or a two-year investment or a long-term investment
1877
01:48:52.760 --> 01:48:55.550
and they see insurance scarcity growing.
1878
01:48:56.460 --> 01:49:01.460
And do you understand the implications to PG&E's work
1879
01:49:03.960 --> 01:49:08.010
to mitigate wildfires is directly tied
1880
01:49:08.010 --> 01:49:09.500
to those insurance rates?
1881
01:49:11.160 --> 01:49:14.380
So while I can't speak to the direct tie
1882
01:49:14.380 --> 01:49:16.960
between PG&E's activities and insurance rates,
1883
01:49:16.960 --> 01:49:21.330
I just don't know that market or regulation set well,
1884
01:49:21.330 --> 01:49:26.330
we completely understand that concern from our customers
1885
01:49:27.800 --> 01:49:30.210
and residents of our service territory
1886
01:49:30.210 --> 01:49:33.510
and we are very focused, as I just mentioned,
1887
01:49:33.510 --> 01:49:36.890
on reducing the risk of wildfire to all of the communities
1888
01:49:36.890 --> 01:49:41.870
that we serve and focusing on the PSPS impact
1889
01:49:41.870 --> 01:49:46.160
that also impacts our customers' livelihoods
1890
01:49:46.160 --> 01:49:50.080
or quality of life during that period of time.
1891
01:49:50.080 --> 01:49:53.240
So can't speak to the insurance aspect of it,
1892
01:49:53.240 --> 01:49:56.590
but can speak obviously extensively to our activities
1893
01:49:56.590 --> 01:49:58.680
and our focus on reducing the wildfire risk
1894
01:49:58.680 --> 01:50:00.130
to protect those communities.
1895
01:50:01.100 --> 01:50:05.220
So given that the Commission is charged with ensuring
1896
01:50:05.220 --> 01:50:09.170
that the plan of reorganization is oriented
1897
01:50:09.170 --> 01:50:14.170
towards a safety culture and oriented towards customers
1898
01:50:14.830 --> 01:50:18.740
not having increased financial burdens,
1899
01:50:20.560 --> 01:50:23.210
do you not think that it would be a prudent step
1900
01:50:23.210 --> 01:50:28.210
to ensure that very specifically and very quantitatively
1901
01:50:29.140 --> 01:50:33.230
that your work, through the Plan of Reorganization,
1902
01:50:33.230 --> 01:50:36.300
is tied to partners in the insurance industry
1903
01:50:36.300 --> 01:50:40.295
to make sure that we have more
1904
01:50:40.295 --> 01:50:45.073
of a comprehensive approach where we have corporate partners
1905
01:50:46.160 --> 01:50:49.520
working together on the path ahead?
1906
01:50:53.990 --> 01:50:56.440
I certainly understand the point you're making,
1907
01:50:57.750 --> 01:51:02.360
but there is a whole other regulatory scheme as it relates
1908
01:51:02.360 --> 01:51:04.910
to insurance in the State of California right?
1909
01:51:04.910 --> 01:51:09.490
There's a whole 'nother regulatory body that leads that.
1910
01:51:09.490 --> 01:51:13.470
And so, while we are more than open to being a part
1911
01:51:13.470 --> 01:51:17.460
of that conversation or contributing to those proceedings,
1912
01:51:17.460 --> 01:51:21.930
if you will, that's just not an area that we're experts in,
1913
01:51:21.930 --> 01:51:25.350
or implicitly have any control over.
1914
01:51:25.350 --> 01:51:29.410
Happy to participate, again, but yeah,
1915
01:51:29.410 --> 01:51:31.750
not our core competency.
1916
01:51:31.750 --> 01:51:34.480
Okay, so sorry, one last question,
1917
01:51:34.480 --> 01:51:38.000
because of what you stated there.
1918
01:51:38.000 --> 01:51:40.120
So the Commission has been looking
1919
01:51:40.120 --> 01:51:42.950
at something called a customer arm threshold
1920
01:51:42.950 --> 01:51:47.950
to understand what can be reasonably charged to customers.
1921
01:51:48.290 --> 01:51:53.290
And so insurance rates and cost of living increases
1922
01:51:54.190 --> 01:51:58.260
and those types of things are customer arms.
1923
01:51:58.260 --> 01:52:03.120
So would you not see that as sort of central to your role
1924
01:52:03.120 --> 01:52:05.130
in terms of a Plan of Reorganization
1925
01:52:05.130 --> 01:52:08.120
and how you understand cost to customers?
1926
01:52:11.610 --> 01:52:16.610
Unfortunately, I don't see that large-scale question
1927
01:52:18.240 --> 01:52:21.040
about the cost to residents or customers
1928
01:52:21.040 --> 01:52:25.060
as being something solvable by PG&E
1929
01:52:25.060 --> 01:52:27.110
in this proceeding or related proceedings.
1930
01:52:27.110 --> 01:52:29.730
I mean that's a large, again, that's things outside
1931
01:52:29.730 --> 01:52:33.270
of PG&E's control that we can contribute to or, you know,
1932
01:52:33.270 --> 01:52:34.550
maybe be a part of the conversation.
1933
01:52:34.550 --> 01:52:39.370
But, basically, I don't agree that that's something
1934
01:52:39.370 --> 01:52:43.190
that is within the scope of PG&E's Plan of Reorganization;
1935
01:52:45.230 --> 01:52:46.910
insurance rates, in particular.
1936
01:52:48.220 --> 01:52:49.950
Even on a collaborative basis?
1937
01:52:49.950 --> 01:52:52.460
I thought you just said that part of this is collaboration.
1938
01:52:52.460 --> 01:52:55.040
And I thought, you know, nothing is on the whole.
1939
01:52:55.040 --> 01:52:56.950
You're having a whole bunch of collaborative partners--
1940
01:52:56.950 --> 01:52:58.800
Mr. Abrams, I think he's answered it
1941
01:52:58.800 --> 01:52:59.760
to the best of his ability.
1942
01:52:59.760 --> 01:53:01.630
I think the answer's pretty clear.
1943
01:53:01.630 --> 01:53:04.940
Okay, I see PG&E counsel upset by my questions,
1944
01:53:04.940 --> 01:53:06.534
so I'll stop there, thank you.
1945
01:53:06.534 --> 01:53:07.580
(chuckling)
1946
01:53:07.580 --> 01:53:10.350
I would note that I did not see any more
1947
01:53:10.350 --> 01:53:12.504
than the normal upset from PG&E counsel.
1948
01:53:12.504 --> 01:53:14.754
(laughing)
1949
01:53:15.900 --> 01:53:16.880
Thank you, Mr. Abrams.
1950
01:53:16.880 --> 01:53:18.430
I have a few questions.
1951
01:53:18.430 --> 01:53:21.620
I think what I'll do is, I have a few questions.
1952
01:53:21.620 --> 01:53:22.790
I dunno, Commissioner Rechtschaffen
1953
01:53:22.790 --> 01:53:24.200
may have a question or two.
1954
01:53:24.200 --> 01:53:26.210
After that, we'll take an afternoon break.
1955
01:53:28.430 --> 01:53:32.690
Just so I'm clear, how does the testimony here
1956
01:53:32.690 --> 01:53:35.980
on wildfire safety relate
1957
01:53:35.980 --> 01:53:39.010
to PG&E's 2020 Wildfire Mitigation Plan?
1958
01:53:39.010 --> 01:53:41.220
What's the relationship or connection?
1959
01:53:41.220 --> 01:53:44.430
So this is a very summarized version, right?
1960
01:53:44.430 --> 01:53:47.180
I think I have six pages of testimony here compared
1961
01:53:47.180 --> 01:53:50.660
to there's 485 pages of testimony,
1962
01:53:50.660 --> 01:53:53.800
or in our original plan as part
1963
01:53:53.800 --> 01:53:55.780
of the Wildfire Mitigation Plan proceeding.
1964
01:53:55.780 --> 01:54:00.200
So this is an appetizer to what's going on
1965
01:54:00.200 --> 01:54:02.290
in the Wildfire Mitigation Plan proceeding,
1966
01:54:02.290 --> 01:54:05.820
the purpose of which is to dig into the actions we're taking
1967
01:54:05.820 --> 01:54:08.260
and to assess and determine,
1968
01:54:08.260 --> 01:54:11.730
are those the right actions at the right scope and scale,
1969
01:54:11.730 --> 01:54:14.380
and how should they be, if anything,
1970
01:54:14.380 --> 01:54:17.820
adjusted from what we've proposed in our plan.
1971
01:54:17.820 --> 01:54:21.760
So this is essentially just a summary of that plan?
1972
01:54:21.760 --> 01:54:22.960
Right, which is ongoing.
1973
01:54:22.960 --> 01:54:23.793
Okay.
1974
01:54:27.140 --> 01:54:30.430
One of the issues that's been raised in this proceeding
1975
01:54:30.430 --> 01:54:32.990
is the concept of regionalization
1976
01:54:32.990 --> 01:54:35.150
and changing essentially some
1977
01:54:35.150 --> 01:54:38.310
of the management structures of PG&E.
1978
01:54:38.310 --> 01:54:41.620
Are you familiar with the regionalization concept?
1979
01:54:41.620 --> 01:54:43.390
At a very high level.
1980
01:54:45.710 --> 01:54:50.430
How does, how do the regionalization proposals
1981
01:54:50.430 --> 01:54:52.380
that are put forward in this proceeding
1982
01:54:53.630 --> 01:54:56.040
impact the Wildfire Mitigation Plan,
1983
01:54:56.040 --> 01:54:57.730
either 2020 or going forward?
1984
01:55:00.330 --> 01:55:04.530
I don't see that they impact the Wildfire Mitigation Plan.
1985
01:55:04.530 --> 01:55:06.440
Regionalization, the concept there
1986
01:55:06.440 --> 01:55:09.820
is to have PG&E leadership and employees
1987
01:55:09.820 --> 01:55:13.920
in local areas having really strong relationships
1988
01:55:13.920 --> 01:55:15.390
with the local communities,
1989
01:55:15.390 --> 01:55:18.290
and people know who each other are
1990
01:55:18.290 --> 01:55:23.290
and to the extent that that helps inform, you know,
1991
01:55:23.558 --> 01:55:28.190
PSPS or the Wildfire Mitigation Plan, I see that as helpful,
1992
01:55:29.150 --> 01:55:30.890
but, what we've put in the plan
1993
01:55:30.890 --> 01:55:34.460
is a commitment by the company that we will continue
1994
01:55:34.460 --> 01:55:38.170
to execute, no matter the final structure.
1995
01:55:39.110 --> 01:55:44.110
So are there, there'll be regional safety positions,
1996
01:55:44.340 --> 01:55:45.173
is that correct?
1997
01:55:46.980 --> 01:55:47.813
Or do you know?
1998
01:55:50.010 --> 01:55:51.680
I guess the question is--
I couldn't testify
1999
01:55:51.680 --> 01:55:53.460
to that, but I've heard it.
2000
01:55:53.460 --> 01:55:55.470
Okay, if there are something
2001
01:55:55.470 --> 01:56:00.470
like a regional safety position, how would that relate
2002
01:56:01.260 --> 01:56:04.600
to the bigger wildfire safety measures
2003
01:56:04.600 --> 01:56:07.233
and the Wildfire Mitigation Plan, if you know?
2004
01:56:12.190 --> 01:56:13.031
I don't.
2005
01:56:13.031 --> 01:56:14.423
Well--
2006
01:56:14.423 --> 01:56:16.360
Go ahead.
2007
01:56:16.360 --> 01:56:20.130
Maybe one way to expand on your question:
2008
01:56:20.130 --> 01:56:23.170
Would it help with improving wildfire safety
2009
01:56:23.170 --> 01:56:25.470
or would it be neutral or hinder it,
2010
01:56:27.090 --> 01:56:28.290
at a regional structure?
2011
01:56:31.540 --> 01:56:33.830
The safety or the safety officer
2012
01:56:33.830 --> 01:56:35.140
or the regional structure?
2013
01:56:35.140 --> 01:56:36.880
I'm gonna make sure I understood the question.
2014
01:56:36.880 --> 01:56:40.520
The regional structure that PG&E proposed
2015
01:56:40.520 --> 01:56:43.350
and that was in the Assigned Commissioner Ruling
2016
01:56:43.350 --> 01:56:47.530
and just the the idea of some regional decentralization.
2017
01:56:47.530 --> 01:56:49.800
Judge Allen was asking about how it would relate
2018
01:56:49.800 --> 01:56:51.300
to the Wildfire Safety Plan.
2019
01:56:51.300 --> 01:56:54.610
So I'm asking you if you could, if you wanna expand
2020
01:56:54.610 --> 01:56:57.220
on what you said a little bit ago
2021
01:56:57.220 --> 01:57:00.350
about its relationship to improving safety.
2022
01:57:00.350 --> 01:57:02.560
Is there anything else you would wanna say
2023
01:57:02.560 --> 01:57:05.200
about how it could improve or promote safety?
2024
01:57:07.200 --> 01:57:09.400
Well I'm in Operations.
2025
01:57:09.400 --> 01:57:13.540
I always like to see more safety resources deployed
2026
01:57:13.540 --> 01:57:16.730
and in a regional area where they know, you know,
2027
01:57:17.914 --> 01:57:19.230
the people in the area very closely.
2028
01:57:19.230 --> 01:57:24.230
I can see that adding, especially during the PSPS events,
2029
01:57:24.260 --> 01:57:27.150
in having additional safety resource
2030
01:57:27.150 --> 01:57:29.780
in our local operating centers.
2031
01:57:29.780 --> 01:57:33.750
Also have a safety advocate.
2032
01:57:33.750 --> 01:57:35.840
A very strong safety advocate
2033
01:57:35.840 --> 01:57:38.663
no matter what issues come up within the company.
2034
01:57:44.328 --> 01:57:49.328
I had a, (clearing throat) excuse me, I had a few
2035
01:57:49.770 --> 01:57:54.720
questions for you, Ms. Maratukulam, about the PSPSs
2036
01:57:55.840 --> 01:58:00.030
and you said you scheduled listening sessions
2037
01:58:00.030 --> 01:58:02.060
with each of the impacted areas.
2038
01:58:03.850 --> 01:58:06.530
I don't know if you happened to listen
2039
01:58:06.530 --> 01:58:10.960
to the Commission's voting meeting last Thursday
2040
01:58:10.960 --> 01:58:12.310
or had anyone report to you
2041
01:58:12.310 --> 01:58:14.950
about what was said at the voting meeting?
2042
01:58:15.900 --> 01:58:18.380
I was not able to listen to it, no.
2043
01:58:18.380 --> 01:58:21.420
Well, the short of it was Commissioner Guzman Aceves
2044
01:58:21.420 --> 01:58:25.410
went at the invitation of Supervisor Moke Simon,
2045
01:58:25.410 --> 01:58:27.320
who is from Lake County.
2046
01:58:27.320 --> 01:58:31.850
And Lake County has a special working group on PSPSs,
2047
01:58:32.900 --> 01:58:35.120
course they've been devastated by wildfires
2048
01:58:35.120 --> 01:58:37.370
over the past several years.
2049
01:58:37.370 --> 01:58:41.847
And they experienced wildfires, either one long one
2050
01:58:43.100 --> 01:58:47.880
or several ones that lasted most of a week in 2019.
2051
01:58:49.300 --> 01:58:51.360
And what Commissioner Guzman Aceves reported
2052
01:58:51.360 --> 01:58:55.100
is that PG&E had made a number of commitments
2053
01:58:55.100 --> 01:58:56.750
to the community going forward,
2054
01:58:57.820 --> 01:59:01.400
including something about working with the local government.
2055
01:59:01.400 --> 01:59:04.140
But what became apparent at that meeting was
2056
01:59:04.140 --> 01:59:07.030
that PG&E hasn't followed up on some of those?
2057
01:59:07.030 --> 01:59:10.080
And so for example PG&E doesn't currently
2058
01:59:10.080 --> 01:59:13.140
have a local liaison assigned to Lake County.
2059
01:59:13.140 --> 01:59:15.780
Lake County has to share with other counties.
2060
01:59:15.780 --> 01:59:19.470
PG&E was unaware that one of its local government contacts
2061
01:59:19.470 --> 01:59:21.870
had been retired for over two months.
2062
01:59:21.870 --> 01:59:24.900
And there were other discussions at this working group
2063
01:59:24.900 --> 01:59:28.610
about the plans going forward
2064
01:59:28.610 --> 01:59:30.790
for 2020 that hadn't materialized.
2065
01:59:34.078 --> 01:59:35.730
Are you aware of any of this?
2066
01:59:35.730 --> 01:59:38.480
I'm not aware of the specifics from Lake County, no.
2067
01:59:38.480 --> 01:59:43.480
All right, well, this concerned us as Commissioners
2068
01:59:43.730 --> 01:59:46.710
and I'm wondering if you can either here
2069
01:59:46.710 --> 01:59:48.910
or in another context follow up with us
2070
01:59:48.910 --> 01:59:53.550
about what your plans are for Lake County in specific?
2071
01:59:53.550 --> 01:59:57.030
Happy to, yes.
2072
01:59:57.030 --> 01:59:59.490
How many community resource centers
2073
01:59:59.490 --> 02:00:01.150
are you planning for 2020?
2074
02:00:01.150 --> 02:00:04.870
I saw in your testimony you say that PG&E
2075
02:00:04.870 --> 02:00:08.190
has mobilized 80 Community Resource Centers.
2076
02:00:08.190 --> 02:00:10.680
Are you planning for more than that?
2077
02:00:10.680 --> 02:00:13.260
We are, we had deployed, I believe,
2078
02:00:13.260 --> 02:00:15.340
it was approximately 80, over 70
2079
02:00:15.340 --> 02:00:18.310
in one event in the 2019 season.
2080
02:00:19.410 --> 02:00:21.710
I cannot recall the number off the top of my head
2081
02:00:21.710 --> 02:00:23.090
of how many we're targeting
2082
02:00:23.090 --> 02:00:26.402
to have pre-established agreements with.
2083
02:00:26.402 --> 02:00:28.130
I did note earlier that we're trying
2084
02:00:28.130 --> 02:00:30.620
to work with property owners now
2085
02:00:30.620 --> 02:00:33.680
to establish hardened facilities
2086
02:00:33.680 --> 02:00:37.850
rather than rely on space to set up tents.
2087
02:00:37.850 --> 02:00:39.992
But I cannot recall the number off the top of my head.
2088
02:00:39.992 --> 02:00:40.825
Matt may have it.
2089
02:00:40.825 --> 02:00:42.550
In our Wildfire Mitigation Plan, we identified four
2090
02:00:42.550 --> 02:00:45.290
to five hardened facilities as in, you know,
2091
02:00:45.290 --> 02:00:48.480
permanent structures per county that's likely to be impacted
2092
02:00:48.480 --> 02:00:50.070
or that's within PSPS footprint,
2093
02:00:50.070 --> 02:00:51.320
which is around 40 counties.
2094
02:00:51.320 --> 02:00:55.140
So we're looking at 150 to 200 sites
2095
02:00:55.140 --> 02:00:56.850
pre-established to be ready.
2096
02:00:56.850 --> 02:00:58.790
And then during any given event,
2097
02:00:58.790 --> 02:01:00.790
the appropriate ones would be activated.
2098
02:01:01.870 --> 02:01:03.060
Are those in the process
2099
02:01:03.060 --> 02:01:06.820
of both being identified and secured by contract
2100
02:01:06.820 --> 02:01:11.470
and otherwise made ready for the event?
2101
02:01:11.470 --> 02:01:15.980
Yes, as well in consultation with the county leadership
2102
02:01:15.980 --> 02:01:18.100
and some cases city leadership to make sure
2103
02:01:18.100 --> 02:01:19.100
those are the right locations
2104
02:01:19.100 --> 02:01:21.780
and that those fit with their plans as well.
2105
02:01:21.780 --> 02:01:23.890
When do you anticipate that all the arrangements
2106
02:01:23.890 --> 02:01:27.850
for these 150 to 200 will be finalized?
2107
02:01:27.850 --> 02:01:28.683
I don't know.
2108
02:01:28.683 --> 02:01:29.920
I know that we've already made good progress.
2109
02:01:29.920 --> 02:01:33.255
But we could follow up with what timeline we have.
2110
02:01:33.255 --> 02:01:37.490
I mean, September 1 is our peak start of PSPS season.
2111
02:01:37.490 --> 02:01:38.820
So in advance of September 1
2112
02:01:38.820 --> 02:01:41.270
is when we want all of this stuff to be in place.
2113
02:01:43.000 --> 02:01:44.320
Okay, the fire season may start
2114
02:01:44.320 --> 02:01:46.240
before September 1 as we all know.
2115
02:01:47.730 --> 02:01:51.110
Let me ask one last question, and this is a follow-up
2116
02:01:51.110 --> 02:01:53.810
to the questions from Ms. Kasnitz at C4AT
2117
02:01:55.115 --> 02:01:57.130
and if you went over this, I apologize,
2118
02:01:57.130 --> 02:02:01.880
but for medically-vulnerable customers who are not customers
2119
02:02:01.880 --> 02:02:03.830
of PG&E, who don't have their own account,
2120
02:02:03.830 --> 02:02:05.780
who are behind a master meter
2121
02:02:05.780 --> 02:02:09.220
like a mobile home park tenant, or Section-8 tenant,
2122
02:02:10.110 --> 02:02:13.210
how are you learning of those customers
2123
02:02:13.210 --> 02:02:15.910
and how are you notifying them of PSPS events?
2124
02:02:15.910 --> 02:02:17.060
Yeah, they are still encouraged
2125
02:02:17.060 --> 02:02:19.000
to enroll with the Medical Baseline Program.
2126
02:02:19.000 --> 02:02:21.350
So while they may not be the tenant of record,
2127
02:02:21.350 --> 02:02:23.410
we are aware of Medical Baseline customers
2128
02:02:23.410 --> 02:02:25.030
that are under a master meter.
2129
02:02:25.030 --> 02:02:26.930
And we do work to notify them directly
2130
02:02:26.930 --> 02:02:29.210
as we do all other medical baseline customers.
2131
02:02:30.190 --> 02:02:32.260
Are you working with the local community-based
2132
02:02:32.260 --> 02:02:34.740
organizations and local governments
2133
02:02:34.740 --> 02:02:36.430
to identify those customers?
2134
02:02:36.430 --> 02:02:40.463
Yes, in 2019 we had outreach seeking
2135
02:02:40.463 --> 02:02:43.060
to inform the public of the program
2136
02:02:43.060 --> 02:02:45.550
and increase awareness and participation.
2137
02:02:45.550 --> 02:02:48.300
We're doing the same this year also in partnership
2138
02:02:48.300 --> 02:02:49.820
with community-based organizations
2139
02:02:49.820 --> 02:02:51.780
to help further get the word out.
2140
02:02:51.780 --> 02:02:54.560
We will be working directly through those organizations
2141
02:02:54.560 --> 02:02:58.640
as well as mass media campaigns to increase awareness
2142
02:02:58.640 --> 02:03:02.156
and participation in the Medical Baseline Program.
2143
02:03:02.156 --> 02:03:03.082
Thank you.
2144
02:03:03.082 --> 02:03:07.840
Thank you, Judge.
2145
02:03:07.840 --> 02:03:09.123
Thank you.
2146
02:03:09.123 --> 02:03:12.820
So my plan after the break is that Ms. Yap
2147
02:03:12.820 --> 02:03:15.720
will take the stand and my plan would be
2148
02:03:15.720 --> 02:03:18.790
to complete the cross-examination of Ms. Yap today
2149
02:03:20.050 --> 02:03:22.360
And also allow for Ms. Sheriff's
2150
02:03:24.770 --> 02:03:27.540
estimated brief cross-examination of Mr. Kenney,
2151
02:03:29.460 --> 02:03:31.040
plus any clean up we do.
2152
02:03:31.040 --> 02:03:34.270
So based on numbers in front of me,
2153
02:03:34.270 --> 02:03:37.350
we may go past four o'clock,
2154
02:03:37.350 --> 02:03:39.320
but that's my plan for this afternoon.
2155
02:03:39.320 --> 02:03:41.970
Anything to do before we take our or afternoon break?
2156
02:03:43.040 --> 02:03:45.820
Seeing none, let's be back by 3:15 p.m.
2157
02:03:45.820 --> 02:03:47.610
by the clock on the wall.
2158
02:03:47.610 --> 02:03:48.443
Off the record.
2159
02:03:57.150 --> 02:03:57.983
On the record.
2160
02:03:59.060 --> 02:04:00.300
Good afternoon.
2161
02:04:00.300 --> 02:04:04.150
We're in Investigation 19-09-016.
2162
02:04:04.150 --> 02:04:06.060
Ms. Sheriff, call your witness, please.
2163
02:04:07.550 --> 02:04:08.580
Thank you, your Honor.
2164
02:04:08.580 --> 02:04:10.710
Nora Sheriff for the California Large Energy
2165
02:04:10.710 --> 02:04:12.410
Consumers Association.
2166
02:04:12.410 --> 02:04:14.860
I would like to call Ms. Catherine Yap to the stand.
2167
02:04:16.670 --> 02:04:19.016
Thank you, Ms. Sheriff.
2168
02:04:19.016 --> 02:04:20.616
Do you swear to tell the truth,
2169
02:04:20.616 --> 02:04:22.444
the whole truth and nothing but the truth?
2170
02:04:22.444 --> 02:04:23.277
I do.
2171
02:04:23.277 --> 02:04:24.470
Thank you, please be seated.
2172
02:04:24.470 --> 02:04:25.380
State your full name.
2173
02:04:25.380 --> 02:04:27.070
Spell your last name for the record.
2174
02:04:31.020 --> 02:04:34.580
My name is Catherine E. Yap.
2175
02:04:34.580 --> 02:04:35.670
Spelled Y-A-P.
2176
02:04:38.840 --> 02:04:39.740
Thank you.
2177
02:04:39.740 --> 02:04:40.840
Go ahead, Ms. Sheriff.
2178
02:04:42.670 --> 02:04:44.260
Good afternoon, Ms. Yap.
2179
02:04:46.080 --> 02:04:48.070
You have before you what has been marked
2180
02:04:48.070 --> 02:04:52.350
for identification as exhibit CLECA-01?
2181
02:04:52.350 --> 02:04:53.570
Yes, I do.
2182
02:04:53.570 --> 02:04:55.680
Do you have before you what has been marked
2183
02:04:55.680 --> 02:04:59.410
for identification as Exhibit CLECA-01-E,
2184
02:04:59.410 --> 02:05:01.290
which is the reply testimony
2185
02:05:01.290 --> 02:05:03.050
of Catherine E. Yap on behalf
2186
02:05:03.050 --> 02:05:07.550
of the California Large Energy Consumers Association Errata?
2187
02:05:07.550 --> 02:05:08.815
Yes, I do.
2188
02:05:08.815 --> 02:05:11.316
Do you also have before you what has been marked,
2189
02:05:11.316 --> 02:05:15.060
or what I would ask to have marked for identification
2190
02:05:15.060 --> 02:05:18.490
as exhibit CLECA-02, which is a CLECA response
2191
02:05:18.490 --> 02:05:21.610
to a PG&E data request, CLECA-001?
2192
02:05:22.850 --> 02:05:23.860
Yes, I do.
2193
02:05:23.860 --> 02:05:24.820
Thank you.
2194
02:05:24.820 --> 02:05:29.467
CLECA response to PG&E data request PG&E CLECA-001!
2195
02:05:31.520 --> 02:05:35.000
is identified as CLECA Exhibit 2.
2196
02:05:35.880 --> 02:05:37.030
Thank you Your Honor.
2197
02:05:38.980 --> 02:05:43.000
Ms. Yap, was this information in these three exhibits
2198
02:05:43.000 --> 02:05:46.020
prepared by you or under your supervision?
2199
02:05:46.020 --> 02:05:47.460
Yes, they were.
2200
02:05:47.460 --> 02:05:50.000
To the extent that it contains facts,
2201
02:05:50.000 --> 02:05:51.700
are those facts true and correct
2202
02:05:51.700 --> 02:05:53.060
to the best of your knowledge?
2203
02:05:53.060 --> 02:05:54.400
Yes, they are.
2204
02:05:54.400 --> 02:05:58.600
To the extent that they contain professional opinions,
2205
02:05:58.600 --> 02:06:00.940
are those your best professional opinions?
2206
02:06:00.940 --> 02:06:02.160
Yes, they are.
2207
02:06:02.160 --> 02:06:03.970
And do you have any changes to make
2208
02:06:03.970 --> 02:06:06.390
to your testimony at this time?
2209
02:06:06.390 --> 02:06:08.080
No, I do not.
2210
02:06:08.080 --> 02:06:09.320
Thank you, Ms. Yap.
2211
02:06:09.320 --> 02:06:12.070
Your Honor, Ms. Yap is available for cross-examination.
2212
02:06:13.020 --> 02:06:14.290
According to what I have there
2213
02:06:14.290 --> 02:06:18.750
is cross for Ms. Yap from PG&E, from EPUC,
2214
02:06:20.180 --> 02:06:22.660
and from TCC; is that correct?
2215
02:06:24.520 --> 02:06:28.690
Let's start with, any preference of starting?
2216
02:06:28.690 --> 02:06:31.120
I was thinking of starting PG&E.
2217
02:06:31.120 --> 02:06:33.570
Let's go with PG&E with cross.
2218
02:06:34.450 --> 02:06:36.280
Okay, Your Honor, Kevin Allred.
2219
02:06:36.280 --> 02:06:38.730
One administrative point that I've just realized.
2220
02:06:38.730 --> 02:06:42.430
The data response that was marked does not
2221
02:06:42.430 --> 02:06:46.160
have the attached, which is rather important for any cross.
2222
02:06:47.060 --> 02:06:48.300
Which exhibit is this?
2223
02:06:48.300 --> 02:06:50.360
Is this is a PG&E's exhibit or--
2224
02:06:50.360 --> 02:06:52.290
It's the data response
2225
02:06:52.290 --> 02:06:54.780
that was just marked as the exhibit.
2226
02:06:54.780 --> 02:06:56.730
Exhibit CLECA-02.
2227
02:06:56.730 --> 02:06:59.070
There is an Excel spreadsheet that's embedded
2228
02:06:59.070 --> 02:07:04.070
in the paper copy, and I do not have the ability at home
2229
02:07:06.340 --> 02:07:08.820
to produce that Excel spreadsheet.
2230
02:07:08.820 --> 02:07:10.170
Okay, off the record.
2231
02:07:11.510 --> 02:07:16.200
Okay, so you're saying it's incomplete and that needs to be,
2232
02:07:18.275 --> 02:07:19.108
or should be added to it?
2233
02:07:19.108 --> 02:07:21.540
Or is it workable with it is--
2234
02:07:21.540 --> 02:07:23.890
Ms. Yapp, how large is the spreadsheet
2235
02:07:24.980 --> 02:07:29.650
that's embedded in response to question one.
2236
02:07:29.650 --> 02:07:32.810
I know you have pulled out some of the tables.
2237
02:07:33.760 --> 02:07:38.313
It's probably two pages per tab maybe.
2238
02:07:42.560 --> 02:07:43.500
One or two pages--
2239
02:07:43.500 --> 02:07:44.830
I now have it, it's not very large.
2240
02:07:44.830 --> 02:07:46.680
I could hand out, I have four copies.
2241
02:07:47.940 --> 02:07:49.480
You can provide it
2242
02:07:49.480 --> 02:07:50.850
for the record.
I can arrange
2243
02:07:50.850 --> 02:07:53.150
to have more copies brought in either
2244
02:07:53.150 --> 02:07:56.430
through Mr. Alcantar or someone else tomorrow.
2245
02:07:56.430 --> 02:07:58.830
And those can just be appended to,
2246
02:08:00.867 --> 02:08:03.865
with a stapler we can just add those to, we could do right?
2247
02:08:03.865 --> 02:08:04.698
Yes Your Honor, I think so.
2248
02:08:04.698 --> 02:08:08.610
Okay, so you have four copies?
2249
02:08:08.610 --> 02:08:11.290
Okay, we may need to do a sharing
2250
02:08:11.290 --> 02:08:13.380
of those four to accommodate cross.
2251
02:08:13.380 --> 02:08:16.730
Why don't we make sure that Ms. Sheriff,
2252
02:08:16.730 --> 02:08:20.430
the witness and whoever's doing cross-examination has,
2253
02:08:20.430 --> 02:08:22.940
do you have that available to--
2254
02:08:24.189 --> 02:08:25.520
I have it electronically.
2255
02:08:25.520 --> 02:08:27.480
I don't have a paper copy of it.
2256
02:08:27.480 --> 02:08:30.680
That's probably okay.
2257
02:08:30.680 --> 02:08:34.138
From my perspective, it's actually preferable.
2258
02:08:34.138 --> 02:08:35.110
(chuckling)
2259
02:08:35.110 --> 02:08:38.360
Okay, so we'll go ahead,
2260
02:08:38.360 --> 02:08:39.670
let's see, on the record.
2261
02:08:41.469 --> 02:08:43.350
While off the record, we had a discussion
2262
02:08:43.350 --> 02:08:48.350
about Exhibit CLECA-02, which the copy that was distributed,
2263
02:08:49.140 --> 02:08:52.758
is missing a related spreadsheet.
2264
02:08:52.758 --> 02:08:55.000
There appear to be adequate copies
2265
02:08:55.000 --> 02:09:00.000
in the hearing room for us to conduct cross-examination.
2266
02:09:00.250 --> 02:09:05.250
And then Ms. Sheriff will provide additional copies
2267
02:09:05.520 --> 02:09:10.240
of the spreadsheet, which will be attached to CLECA-02
2268
02:09:10.240 --> 02:09:12.040
before it is admitted to the record.
2269
02:09:13.630 --> 02:09:15.390
With that, Mr. Allred.
2270
02:09:16.320 --> 02:09:17.496
Yes, your Honor.
2271
02:09:17.496 --> 02:09:19.160
May I approach the witness to hand out copies
2272
02:09:19.160 --> 02:09:20.160
of what we just referenced?
2273
02:09:20.160 --> 02:09:21.130
Yes, you may.
2274
02:09:23.965 --> 02:09:28.965
I think I have, oh okay, good, okay.
2275
02:09:33.650 --> 02:09:34.710
Off the record.
2276
02:09:36.074 --> 02:09:36.907
I got, is this--
2277
02:09:37.960 --> 02:09:40.096
There's two different tabs to the Excel.
2278
02:09:40.096 --> 02:09:40.929
Okay, so that's what this is?
2279
02:09:40.929 --> 02:09:42.150
Okay thanks.
2280
02:09:42.150 --> 02:09:46.200
I'm not gonna mark this now, but I'll just use it for today.
2281
02:09:48.065 --> 02:09:52.630
Thank you Judge.
2282
02:09:52.630 --> 02:09:53.700
Okay, are we ready?
2283
02:09:53.700 --> 02:09:54.912
Yes Your Honor.
2284
02:09:54.912 --> 02:09:58.680
On the record.
2285
02:10:05.650 --> 02:10:09.430
You handed me actually two different spreadsheets.
2286
02:10:09.430 --> 02:10:13.000
'Cause one looks like my work paper.
2287
02:10:13.000 --> 02:10:14.683
Off the record.
2288
02:10:14.683 --> 02:10:15.940
Let's make sure we're clear.
2289
02:10:18.212 --> 02:10:19.450
Which is a single page.
2290
02:10:22.250 --> 02:10:25.270
And the other which is paper clipped together
2291
02:10:25.270 --> 02:10:27.450
is the re-worked version.
2292
02:10:27.450 --> 02:10:29.560
The data points are attached to spreadsheets.
2293
02:10:29.560 --> 02:10:31.530
These are the two spreadsheets that are referenced
2294
02:10:31.530 --> 02:10:34.527
and embedded within the data response.
2295
02:10:34.527 --> 02:10:36.860
Okay, I just wanted to be clear though
2296
02:10:36.860 --> 02:10:41.860
that we were talking about two separate spreadsheets,
2297
02:10:42.090 --> 02:10:44.760
one of which has multiple pages.
2298
02:10:44.760 --> 02:10:46.600
Yeah, there's one multiple-page document
2299
02:10:46.600 --> 02:10:48.720
and one single-page document.
2300
02:10:48.720 --> 02:10:49.820
It's a single page document.
2301
02:10:49.820 --> 02:10:52.360
I believe the single-page document corresponds
2302
02:10:52.360 --> 02:10:56.080
to your question one response, which is your work paper.
2303
02:10:56.080 --> 02:10:58.210
Yes, it's my original work paper
2304
02:10:59.120 --> 02:11:04.120
and then the second one was my re-working of a PG&E response
2305
02:11:06.480 --> 02:11:10.340
to a TURN data request, just to make it really confusing.
2306
02:11:10.340 --> 02:11:13.340
Okay, when I go on the record,
2307
02:11:13.340 --> 02:11:14.340
who wants to clarify that?
2308
02:11:14.340 --> 02:11:16.240
Do you wanna do it or Mr. Allred?
2309
02:11:16.240 --> 02:11:18.200
I could do it and perhaps to help further,
2310
02:11:18.200 --> 02:11:20.090
I have taken the multi-page
2311
02:11:20.090 --> 02:11:22.170
and condensed it onto a single page.
2312
02:11:22.170 --> 02:11:23.910
I could hand that out and that might maybe--
2313
02:11:23.910 --> 02:11:25.715
No, that's just gonna confuse everyone.
2314
02:11:25.715 --> 02:11:26.970
(laughing)
2315
02:11:26.970 --> 02:11:28.670
Besides, it'd be an eye test.
2316
02:11:29.990 --> 02:11:30.950
On the record.
2317
02:11:30.950 --> 02:11:32.410
Mr. Allred I believe there needs
2318
02:11:32.410 --> 02:11:35.260
to be a slight clarification of the document
2319
02:11:35.260 --> 02:11:36.260
that was handed out.
2320
02:11:37.330 --> 02:11:39.740
We have handed out what I understood
2321
02:11:39.740 --> 02:11:42.350
to be attachments to the data response
2322
02:11:42.350 --> 02:11:44.330
that was marked as CLECA-02.
2323
02:11:44.330 --> 02:11:47.320
The first one was the first, the one-pager
2324
02:11:47.320 --> 02:11:49.170
is the first attachment and what is printed
2325
02:11:49.170 --> 02:11:52.100
is multiple pages, what you would call your re-work
2326
02:11:53.410 --> 02:11:55.040
is the second attachment.
2327
02:11:56.204 --> 02:11:57.037
Do you have those in front of you?
2328
02:11:57.037 --> 02:12:01.130
Yes, I do and just to be nauseatingly clear,
2329
02:12:01.130 --> 02:12:04.060
the single page one was the response
2330
02:12:04.060 --> 02:12:07.300
to question one of your data request.
2331
02:12:07.300 --> 02:12:10.320
And I believe the multiple page one was
2332
02:12:10.320 --> 02:12:13.240
in response to question three.
2333
02:12:15.586 --> 02:12:17.730
For purposes of cross-examination
2334
02:12:17.730 --> 02:12:19.920
and to make sure that the record
2335
02:12:19.920 --> 02:12:22.840
is clear for the single page one,
2336
02:12:22.840 --> 02:12:24.720
let's call that document Sources,
2337
02:12:24.720 --> 02:12:29.150
because it has the word sources in all caps at the top.
2338
02:12:29.150 --> 02:12:32.790
And on the other one, let's call it Cost of Debt Detail,
2339
02:12:32.790 --> 02:12:35.530
because that's what appears in the footer on the first page.
2340
02:12:38.470 --> 02:12:41.400
And ultimately these will end up as part of CLECA-02.
2341
02:12:44.026 --> 02:12:45.585
Go ahead Mr. Allred.
2342
02:12:45.585 --> 02:12:46.418
Thank you, your Honor.
2343
02:12:46.418 --> 02:12:47.700
Let's actually set that aside for a moment.
2344
02:12:47.700 --> 02:12:48.533
We'll get back to it.
2345
02:12:48.533 --> 02:12:49.750
Good afternoon, Ms. Yap.
2346
02:12:49.750 --> 02:12:51.180
Good afternoon.
2347
02:12:51.180 --> 02:12:54.090
Take a look at what has been marked PG&E-X-01.
2348
02:12:54.090 --> 02:12:56.090
It's the thick document in front of you.
2349
02:12:58.110 --> 02:13:00.710
And I believe it is what is referenced
2350
02:13:00.710 --> 02:13:05.710
in page 19 of your testimony at lines 11 to 13.
2351
02:13:11.315 --> 02:13:13.640
I'm going to stop you right there.
2352
02:13:13.640 --> 02:13:15.870
Mine didn't get marked.
2353
02:13:15.870 --> 02:13:17.690
So is this what we're referring to?
2354
02:13:17.690 --> 02:13:19.220
It is a thick document.
2355
02:13:19.220 --> 02:13:21.680
It was left for me up here.
2356
02:13:24.630 --> 02:13:25.730
Off the record.
2357
02:13:28.220 --> 02:13:29.053
Okay.
2358
02:13:34.920 --> 02:13:36.612
On the record.
2359
02:13:36.612 --> 02:13:39.570
Actually, we have not marked these
2360
02:13:39.570 --> 02:13:42.250
on the record yet have we, Mr. Allred?
2361
02:13:42.250 --> 02:13:43.083
I don't believe so.
2362
02:13:43.083 --> 02:13:44.120
I believe your Honor has them,
2363
02:13:44.120 --> 02:13:45.730
but I don't know if it was on the record.
2364
02:13:45.730 --> 02:13:46.910
I believe not.
2365
02:13:46.910 --> 02:13:51.140
So I understand that PG&E has two exhibits they wish
2366
02:13:51.140 --> 02:13:54.880
to have marked as cross-examination exhibits.
2367
02:13:54.880 --> 02:13:56.620
Is that correct, Mr. Allred?
2368
02:13:56.620 --> 02:13:57.580
Yes, your Honor.
2369
02:13:57.580 --> 02:14:01.480
So first one I have titled
2370
02:14:01.480 --> 02:14:06.210
PG&E Hearing Room Exhibit, the caption of this case,
2371
02:14:06.210 --> 02:14:09.640
then it says, Financing Order Authorizing the Issuance
2372
02:14:09.640 --> 02:14:12.470
of Energy Recovery Bonds Pursuant
2373
02:14:12.470 --> 02:14:17.290
to Senate Bill 772 is marked as PG&E-X-01.
2374
02:14:19.310 --> 02:14:24.310
The second one, a smaller document, PG&E's Hearing Room
2375
02:14:25.020 --> 02:14:30.020
Exhibit CLECA's Response to PG&E Data Request 001,
2376
02:14:30.190 --> 02:14:35.110
Questions six, seven, and eight is marked as PG&E-X-02.
2377
02:14:38.460 --> 02:14:39.293
Go ahead.
2378
02:14:39.293 --> 02:14:40.126
Thank you, Your Honor.
2379
02:14:41.030 --> 02:14:46.030
Ms. Yap, if you'll look at your testimony at page 19,
2380
02:14:46.220 --> 02:14:48.010
lines 11 to 13.
2381
02:14:55.540 --> 02:14:58.860
You state there quote, "It is noteworthy that
2382
02:14:58.860 --> 02:15:01.620
"in its previous bankruptcy proceeding,
2383
02:15:01.620 --> 02:15:04.380
"PG&E's authorization to recover the cost
2384
02:15:04.380 --> 02:15:06.390
"of its debt financed associated
2385
02:15:06.390 --> 02:15:10.560
"with its POR was limited to 25 million dollars."
2386
02:15:10.560 --> 02:15:11.393
Closed quote.
2387
02:15:11.393 --> 02:15:12.280
Do you see that?
2388
02:15:12.280 --> 02:15:13.113
Yes.
2389
02:15:13.113 --> 02:15:15.780
And you footnote that to what I believe
2390
02:15:15.780 --> 02:15:20.000
is the document we have marked as PG&E-X-01
2391
02:15:20.000 --> 02:15:25.000
CPUC Decision 04-11-015, Financing Order
2392
02:15:25.790 --> 02:15:27.660
Authorizing Bond Issuance's.
2393
02:15:27.660 --> 02:15:29.110
Is that the correct document?
2394
02:15:34.430 --> 02:15:36.510
Yes, that's the document I cited.
2395
02:15:36.510 --> 02:15:39.090
And if looking at that exhibit, X-01,
2396
02:15:39.931 --> 02:15:41.660
if you turn to page 26 and 27,
2397
02:15:41.660 --> 02:15:43.860
which is the pages you cite in the footnote,
2398
02:15:52.330 --> 02:15:56.180
at the bottom there there's a section F Bond Issuance Cost.
2399
02:15:56.180 --> 02:15:57.013
Do you see that?
2400
02:15:58.640 --> 02:15:59.640
Yes.
2401
02:15:59.640 --> 02:16:04.590
And this section relates to the utility's
2402
02:16:04.590 --> 02:16:07.150
post emergence bond issuance, correct?
2403
02:16:08.660 --> 02:16:09.493
Yes.
2404
02:16:09.493 --> 02:16:12.010
So it's not referring to the exit financing cost
2405
02:16:12.010 --> 02:16:14.460
associated with emergence from bankruptcy, right?
2406
02:16:26.220 --> 02:16:27.053
You are correct.
2407
02:16:27.053 --> 02:16:30.890
It's the issuance cost for the energy recovery bonds.
2408
02:16:32.440 --> 02:16:35.680
Also at the bottom of page 26, in that first sentence
2409
02:16:35.680 --> 02:16:40.680
of that section it says that PG&E estimates the costs
2410
02:16:41.040 --> 02:16:45.240
in question here as 21.663 million, correct?
2411
02:16:52.050 --> 02:16:57.050
Yes, the decision on page 26 does cite 21.663 million.
2412
02:16:57.200 --> 02:17:02.200
And at page 27 in the middle paragraph
2413
02:17:03.820 --> 02:17:05.360
the decision says quote:
2414
02:17:05.360 --> 02:17:08.580
"We adopt PG&E's unopposed proposal
2415
02:17:08.580 --> 02:17:12.820
"to cap bond issuance cost at 25 million
2416
02:17:12.820 --> 02:17:15.050
"plus costs for the Commission financing team."
2417
02:17:15.050 --> 02:17:16.338
Closed quote.
2418
02:17:16.338 --> 02:17:17.171
Do you see that?
2419
02:17:17.171 --> 02:17:18.004
Yes, I do.
2420
02:17:18.004 --> 02:17:20.280
So to clarify, this was not a situation
2421
02:17:20.280 --> 02:17:23.990
where PG&E sought to recover financing costs
2422
02:17:23.990 --> 02:17:26.160
and the Commission limited the recovery
2423
02:17:26.160 --> 02:17:28.480
to some lesser amount, correct?
2424
02:17:28.480 --> 02:17:30.020
That is correct.
2425
02:17:30.020 --> 02:17:32.990
And in fact it was an unopposed request for a cap
2426
02:17:32.990 --> 02:17:35.690
that PG&E said up front it would come in under, right?
2427
02:17:36.620 --> 02:17:39.830
That's the stated language of the decision.
2428
02:17:43.420 --> 02:17:44.430
To the best of your knowledge,
2429
02:17:44.430 --> 02:17:46.350
in fact the utility was permitted
2430
02:17:46.350 --> 02:17:48.920
to recover its exit financing cost in connection
2431
02:17:48.920 --> 02:17:51.000
with the previous bankruptcy, is that right?
2432
02:17:59.270 --> 02:18:01.653
It's my understanding that it was allowed
2433
02:18:01.653 --> 02:18:05.740
to recover the actual cost of the financing.
2434
02:18:07.918 --> 02:18:09.050
Let me move to another subject,
2435
02:18:09.050 --> 02:18:11.230
the regional restructuring.
2436
02:18:11.230 --> 02:18:14.200
As I understand it, you're supportive of PG&E's proposal
2437
02:18:14.200 --> 02:18:17.320
that it develop and implement a regional restructuring plan?
2438
02:18:19.690 --> 02:18:23.800
Yes, I made a similar recommendation actually
2439
02:18:23.800 --> 02:18:27.610
in my testimony that was submitted last year.
2440
02:18:28.980 --> 02:18:30.720
And in your opinion, such a restructuring
2441
02:18:30.720 --> 02:18:33.250
has strong potential to improve the quality
2442
02:18:33.250 --> 02:18:35.830
of PG&E's service to its customers, is that fair?
2443
02:18:38.440 --> 02:18:43.440
It has the potential to improve the quality of service
2444
02:18:43.690 --> 02:18:46.400
and the relationships that PG&E has
2445
02:18:46.400 --> 02:18:51.400
with the local communities and its customers
2446
02:18:51.470 --> 02:18:55.010
and I would say also its large customers.
2447
02:18:55.010 --> 02:18:57.240
And that regional restructuring in your view
2448
02:18:57.240 --> 02:18:59.310
would be beneficial to customers
2449
02:18:59.310 --> 02:19:02.170
even if PG&E had not filed for bankruptcy, right?
2450
02:19:07.500 --> 02:19:09.240
So you're saying hypothetically,
2451
02:19:09.240 --> 02:19:11.710
if we were sitting around thinking of ways
2452
02:19:11.710 --> 02:19:15.340
that we could improve PG&E's management,
2453
02:19:16.900 --> 02:19:20.490
regional restructuring would be on my,
2454
02:19:20.490 --> 02:19:23.960
are you asking if that would be on my list of to-dos?
2455
02:19:23.960 --> 02:19:26.320
As something that would be a positive, yes.
2456
02:19:28.410 --> 02:19:33.410
Yes, I think that, and I think I made it clear
2457
02:19:35.200 --> 02:19:40.200
in my testimony that PG&E went too far
2458
02:19:40.430 --> 02:19:44.893
when it consolidated itself in the early 2000s.
2459
02:19:47.490 --> 02:19:50.520
It was very focused on streamlining
2460
02:19:50.520 --> 02:19:54.220
and using measures of performance.
2461
02:19:54.220 --> 02:19:56.260
It just went too far.
2462
02:19:57.770 --> 02:20:00.710
There's certainly there are efficiencies in doing that,
2463
02:20:00.710 --> 02:20:04.720
but I think, if anything, overshot the mark
2464
02:20:04.720 --> 02:20:09.490
and have lost touch with what's going on in the regions.
2465
02:20:09.490 --> 02:20:11.940
And in your view, such a regional restructuring
2466
02:20:11.940 --> 02:20:14.010
would be sufficiently complicated,
2467
02:20:14.010 --> 02:20:15.930
that it would take a substantial amount of time
2468
02:20:15.930 --> 02:20:18.450
to create a fully fleshed out plan, is that fair?
2469
02:20:20.280 --> 02:20:24.030
There's a reason why my testimony recommends
2470
02:20:24.030 --> 02:20:29.030
that the reorganization be focused on the GRC,
2471
02:20:32.340 --> 02:20:36.020
which will be coming up and I mean the company
2472
02:20:36.020 --> 02:20:41.020
will be filing for the 2023 GRC in about a year.
2473
02:20:45.170 --> 02:20:49.070
In my experience, reorganizing,
2474
02:20:49.070 --> 02:20:54.070
I mean you've got 25,000 employees and you've got a lot
2475
02:20:54.970 --> 02:20:59.430
of different tasks that those employees are involved in.
2476
02:21:00.510 --> 02:21:04.720
It takes a lot of thought to figure out how you actually
2477
02:21:04.720 --> 02:21:08.910
are going to break apart what's been centralized
2478
02:21:08.910 --> 02:21:11.380
back into regional areas.
2479
02:21:12.280 --> 02:21:14.860
You don't want to do this badly.
2480
02:21:14.860 --> 02:21:17.730
That will make a bad problem worse.
2481
02:21:17.730 --> 02:21:18.890
You wanna do it well.
2482
02:21:19.880 --> 02:21:23.410
You wanna do it once and you wanna do it well.
2483
02:21:24.390 --> 02:21:29.390
And in my opinion it deserves the thought that's required
2484
02:21:30.200 --> 02:21:34.240
to do it well and the time that it takes
2485
02:21:34.240 --> 02:21:37.060
and the resources that it takes to do it well.
2486
02:21:37.060 --> 02:21:41.720
And then I think it will improve PG&E's performance.
2487
02:21:41.720 --> 02:21:43.810
Certainly will improve its interface
2488
02:21:43.810 --> 02:21:47.150
with the local communities.
2489
02:21:47.150 --> 02:21:49.180
Thank you, if you'll turn to page 15
2490
02:21:49.180 --> 02:21:50.480
of your testimony, please.
2491
02:21:51.380 --> 02:21:53.500
And I wanna direct you to lines 19 and 20.
2492
02:22:04.322 --> 02:22:05.420
You state there quote:
2493
02:22:05.420 --> 02:22:07.800
"The Commission should require PG&E
2494
02:22:07.800 --> 02:22:10.220
"to use shareholder funded research
2495
02:22:10.220 --> 02:22:13.640
"to better understand the concerns of its ratepayers
2496
02:22:13.640 --> 02:22:16.160
"in various parts of its large service territory."
2497
02:22:16.160 --> 02:22:16.993
Closed quote.
2498
02:22:16.993 --> 02:22:17.940
Do you see that?
2499
02:22:17.940 --> 02:22:18.800
Yes.
2500
02:22:18.800 --> 02:22:21.080
Isn't developing a robust understanding
2501
02:22:21.080 --> 02:22:22.650
of one's customers something
2502
02:22:22.650 --> 02:22:25.770
that should be a core part of a utility's operations?
2503
02:22:30.680 --> 02:22:32.380
Generally speaking, yes.
2504
02:22:32.380 --> 02:22:37.130
But I think in this situation PG&E needs to demonstrate
2505
02:22:37.130 --> 02:22:40.300
that its shareholders are committed
2506
02:22:40.300 --> 02:22:45.300
to really addressing the gap that has developed
2507
02:22:45.350 --> 02:22:50.350
between its communities, its customers, and its owners.
2508
02:22:50.510 --> 02:22:51.480
What's the, I am sorry.
2509
02:22:51.480 --> 02:22:52.313
Did I interrupt you?
2510
02:22:52.313 --> 02:22:53.450
Go ahead.
2511
02:22:53.450 --> 02:22:58.160
Yes, so that's the spirit within which this recommendation
2512
02:22:58.160 --> 02:23:03.160
is made in the context of the Plan of Reorganization.
2513
02:23:03.278 --> 02:23:06.110
Going forward I am not suggesting
2514
02:23:06.110 --> 02:23:10.490
that doing a certain amount of customer surveying
2515
02:23:10.490 --> 02:23:12.540
is something that should be disallowed
2516
02:23:12.540 --> 02:23:14.330
because it's an unreasonable cost.
2517
02:23:15.200 --> 02:23:16.800
What in your view is the principle
2518
02:23:16.800 --> 02:23:21.070
that divides utility activities that are part of rates,
2519
02:23:21.070 --> 02:23:23.670
versus things that should be funded by shareholders?
2520
02:23:31.360 --> 02:23:33.970
You're asking me that in a generic sense?
2521
02:23:33.970 --> 02:23:35.840
Well, you put this on side of the line.
2522
02:23:35.840 --> 02:23:38.540
I'm wondering what principle animates that conclusion?
2523
02:23:41.340 --> 02:23:43.910
I think I just expressed it.
2524
02:23:43.910 --> 02:23:48.910
That it's the circumstance that the company finds itself
2525
02:23:49.630 --> 02:23:54.630
in where the disconnect that's developed
2526
02:23:56.484 --> 02:23:59.130
between the company, its ownership,
2527
02:23:59.130 --> 02:24:02.450
its management and its customers,
2528
02:24:02.450 --> 02:24:07.450
I think it deserves, it deserves if you want, a gesture
2529
02:24:10.730 --> 02:24:14.280
that PG&E's owners and its management
2530
02:24:14.280 --> 02:24:18.380
is committed to really connecting with its customers.
2531
02:24:18.380 --> 02:24:20.750
And that it's not gonna ask its customers
2532
02:24:20.750 --> 02:24:24.610
to foot the bill for it to be bridging
2533
02:24:24.610 --> 02:24:27.950
that gap under these circumstances.
2534
02:24:27.950 --> 02:24:29.650
You're aware the Plan of Reorganization
2535
02:24:29.650 --> 02:24:32.050
involves some very, very substantial
2536
02:24:32.050 --> 02:24:35.220
shareholder funding of various things, correct?
2537
02:24:35.220 --> 02:24:36.053
Yes.
2538
02:24:39.110 --> 02:24:42.240
One could say the same thing as you just said
2539
02:24:42.240 --> 02:24:44.030
about any number of things that a utility
2540
02:24:44.030 --> 02:24:46.990
would ordinarily do that are good for its customers,
2541
02:24:46.990 --> 02:24:48.290
why is this one different?
2542
02:24:50.390 --> 02:24:52.280
Objection, your Honor, I believe this question
2543
02:24:52.280 --> 02:24:54.470
has been asked and answered more than once.
2544
02:24:54.470 --> 02:24:55.600
Sustained.
2545
02:24:58.420 --> 02:25:01.590
Let's talk about your discussion of rate neutrality.
2546
02:25:01.590 --> 02:25:04.490
You discussed that some in your testimony, correct?
2547
02:25:06.140 --> 02:25:08.230
There is a section of my testimony.
2548
02:25:08.230 --> 02:25:10.040
Would you like me to open it up?
2549
02:25:10.040 --> 02:25:11.450
Okay, yes.
2550
02:25:11.450 --> 02:25:13.440
I'm gonna direct you in a minute to page 21.
2551
02:25:13.440 --> 02:25:15.820
First, I have some more general questions.
2552
02:25:15.820 --> 02:25:17.920
Yes, you can turn to that now if you like.
2553
02:25:20.280 --> 02:25:23.730
In evaluating the neutral-on-average requirement
2554
02:25:23.730 --> 02:25:26.510
you understand that what is to be analyzed
2555
02:25:26.510 --> 02:25:29.310
is the rate impacts created by implementation
2556
02:25:29.310 --> 02:25:31.260
of the Plan of Reorganization, correct?
2557
02:25:32.180 --> 02:25:34.330
Yes, I kept that in mind.
2558
02:25:34.330 --> 02:25:36.060
So in evaluating rate neutrality,
2559
02:25:36.060 --> 02:25:38.480
you wouldn't think it appropriate to include
2560
02:25:38.480 --> 02:25:41.140
in rate impacts things that would have happened
2561
02:25:41.140 --> 02:25:43.590
without the bankruptcy reorganization, would you?
2562
02:25:45.230 --> 02:25:50.230
In my analysis, I focused on the incremental costs,
2563
02:25:52.420 --> 02:25:55.900
if you will, or the, actually, the Plan of Reorganization
2564
02:25:55.900 --> 02:26:00.900
doesn't propose costs per se except for the financing.
2565
02:26:03.100 --> 02:26:05.030
So I focused on that.
2566
02:26:05.030 --> 02:26:08.180
So, it's an incremental analysis understanding
2567
02:26:08.180 --> 02:26:10.650
that there is other things that are going on.
2568
02:26:12.240 --> 02:26:14.860
So I think the incremental analysis you're referring
2569
02:26:14.860 --> 02:26:18.880
to is summarized at page 21, well,
2570
02:26:18.880 --> 02:26:20.350
I won't put words in your mouth.
2571
02:26:20.350 --> 02:26:25.350
If you turn to page 21, lines 14 to 19, it states, quote:
2572
02:26:32.480 --> 02:26:35.550
"However, if the Commission were to permit PG&E
2573
02:26:35.550 --> 02:26:38.330
"to recover any professional fees and expenses
2574
02:26:38.330 --> 02:26:41.210
"associated with the Chapter 11 proceedings,
2575
02:26:41.210 --> 02:26:43.360
"the Commission would have to limit the recovery
2576
02:26:43.360 --> 02:26:46.040
"of those fees and expenses and require them
2577
02:26:46.040 --> 02:26:49.230
"to be amortized over a long period of time
2578
02:26:49.230 --> 02:26:53.070
"to ensure that the combination of the professional fees
2579
02:26:53.070 --> 02:26:55.270
"and debt costs do not exceed
2580
02:26:55.270 --> 02:26:58.020
"the 70.7 million dollar reduction
2581
02:26:58.020 --> 02:26:59.890
"in debt costs in any given year."
2582
02:27:01.041 --> 02:27:01.874
Do you see that?
2583
02:27:01.874 --> 02:27:03.064
Yes.
2584
02:27:03.064 --> 02:27:05.870
And if I understand your testimony,
2585
02:27:05.870 --> 02:27:08.770
you are not asserting in your testimony
2586
02:27:08.770 --> 02:27:12.470
that PG&E's plan fails to satisfy AB-1054's
2587
02:27:12.470 --> 02:27:15.147
neutral-on-average requirement, right?
2588
02:27:18.003 --> 02:27:23.003
I haven't come to that conclusion per se.
2589
02:27:23.160 --> 02:27:27.520
I have discussed some circumstances
2590
02:27:27.520 --> 02:27:31.570
under which it could violate that provision.
2591
02:27:32.440 --> 02:27:36.170
And fair to say if PG&E, strike that.
2592
02:27:37.300 --> 02:27:41.523
On the other hand, if PG&E's plan, strike that.
2593
02:27:43.630 --> 02:27:44.463
Bad question.
2594
02:27:44.463 --> 02:27:48.640
Fair to say you agree that PG&E's plan would satisfy AB-1054
2595
02:27:48.640 --> 02:27:50.620
neutral-on-average requirement
2596
02:27:50.620 --> 02:27:53.660
so long as the costs PG&E seeks to recover
2597
02:27:53.660 --> 02:27:56.290
in connection with that plan do not
2598
02:27:56.290 --> 02:27:58.940
exceed the interest cost savings created by the plan?
2599
02:28:03.790 --> 02:28:08.133
Yes, if you're generating 70.7 million
2600
02:28:10.830 --> 02:28:14.660
in revenue for a period of time, a revenue reduction
2601
02:28:14.660 --> 02:28:19.660
for a period of time, you can't impose costs
2602
02:28:22.450 --> 02:28:25.270
in any given year through rates.
2603
02:28:25.270 --> 02:28:29.510
You can amortize a cost in a current period
2604
02:28:29.510 --> 02:28:34.050
over a long period of time to reduce it such
2605
02:28:34.050 --> 02:28:39.050
that it would not exceed 70.7 million per year
2606
02:28:39.370 --> 02:28:44.370
for the period of time where there are debt savings
2607
02:28:45.500 --> 02:28:50.200
and it would remain neutral under those circumstances.
2608
02:28:51.470 --> 02:28:55.370
Did you review the clarification document
2609
02:28:55.370 --> 02:28:57.660
submitted by PG&E at the beginning of these hearings
2610
02:28:57.660 --> 02:29:00.020
that was marked as PG&E Exhibit Eight?
2611
02:29:01.420 --> 02:29:03.510
Yes, I have looked at that spreadsheet.
2612
02:29:03.510 --> 02:29:05.370
Would you like me to open it?
2613
02:29:05.370 --> 02:29:06.910
I think it's in front of you.
2614
02:29:06.910 --> 02:29:09.250
It's actually, I'm not referring to a spreadsheet.
2615
02:29:09.250 --> 02:29:11.720
I'm referring to the actual
2616
02:29:11.720 --> 02:29:14.360
clarification document, Exhibit Eight.
2617
02:29:15.280 --> 02:29:17.120
Oh, okay, I'm sorry, I was thinking --
2618
02:29:17.120 --> 02:29:18.431
No, that's fine.
2619
02:29:18.431 --> 02:29:19.264
A different document.
2620
02:29:19.264 --> 02:29:21.040
Yes, no I have read this, yes.
2621
02:29:22.860 --> 02:29:25.640
And if you look at the first clarification there,
2622
02:29:25.640 --> 02:29:30.190
paragraph one, which I'll summarize
2623
02:29:30.190 --> 02:29:33.040
but if you feel I'm summarizing incorrectly, let me know,
2624
02:29:34.570 --> 02:29:39.570
limits the professional fees that PG&E seeks
2625
02:29:40.070 --> 02:29:44.970
to recover to the financing-related fees.
2626
02:29:46.340 --> 02:29:50.330
And it estimates those at about 154 million, correct?
2627
02:29:59.640 --> 02:30:01.170
Yes, that is correct.
2628
02:30:01.170 --> 02:30:03.420
And so subject to that clarification,
2629
02:30:03.420 --> 02:30:06.340
would you agree that so long as those financing fees
2630
02:30:06.340 --> 02:30:09.370
are amortized over the length of the debt,
2631
02:30:09.370 --> 02:30:12.270
PG&E's plan would satisfy the rate neutrality requirement?
2632
02:30:13.740 --> 02:30:16.660
Yes, I did a calculation not using
2633
02:30:16.660 --> 02:30:19.500
exactly the same figures, but I demonstrated
2634
02:30:19.500 --> 02:30:23.430
that you could satisfy the rate neutrality
2635
02:30:23.430 --> 02:30:26.940
by amortizing approximately that amount of money.
2636
02:30:30.233 --> 02:30:32.540
If you'll turn to your testimony at page 17.
2637
02:30:44.570 --> 02:30:48.200
The last two lines on that page you state, quote:
2638
02:30:48.200 --> 02:30:51.110
"If one uses a more appropriate discount rate
2639
02:30:51.110 --> 02:30:54.200
"of 8% which is reflective of the cost
2640
02:30:54.200 --> 02:30:58.270
"of money for PG&E's investors as well as its ratepayers."
2641
02:30:59.380 --> 02:31:02.530
And then it goes on from there to give the calculation.
2642
02:31:03.412 --> 02:31:04.780
Do you see where I'm reading from?
2643
02:31:04.780 --> 02:31:06.150
Yes, I do.
2644
02:31:06.150 --> 02:31:11.150
And footnote 49 in your testimony at the end
2645
02:31:13.480 --> 02:31:17.080
of that sentence states that PG&E's 2020
2646
02:31:17.080 --> 02:31:20.310
adopted cost of capital is 7.81%.
2647
02:31:21.447 --> 02:31:22.280
Do you see that?
2648
02:31:28.250 --> 02:31:29.083
Yes.
2649
02:31:29.083 --> 02:31:30.930
And so when you use 8% in the body,
2650
02:31:30.930 --> 02:31:33.060
you're not asserting some different discount rate,
2651
02:31:33.060 --> 02:31:35.280
you're just rounding, is that fair?
2652
02:31:35.280 --> 02:31:40.280
I actually was using it as a representative of the 7.8,
2653
02:31:41.050 --> 02:31:45.450
but also putting it in perspective for ratepayers and I,
2654
02:31:45.450 --> 02:31:49.230
in my previous footnote had discussed the fact
2655
02:31:49.230 --> 02:31:53.310
that people are earning rather low interest rates
2656
02:31:53.310 --> 02:31:55.290
on their savings accounts,
2657
02:31:55.290 --> 02:31:59.370
but at the same time they face very high borrowing costs,
2658
02:31:59.370 --> 02:32:02.070
particularly if they're relying on credit cards.
2659
02:32:02.070 --> 02:32:06.020
So, I was kind of doing a, you know, here's a span,
2660
02:32:06.020 --> 02:32:10.260
here's a range and 8% is kind of in the middle.
2661
02:32:10.260 --> 02:32:15.040
It's representative of the utility's cost of capital,
2662
02:32:15.040 --> 02:32:18.980
so I felt it was a good number to use as a discount rate.
2663
02:32:21.830 --> 02:32:26.830
Why do you think 8% or 7.81% is a better percentage
2664
02:32:28.050 --> 02:32:29.410
to use for purposes of thinking
2665
02:32:29.410 --> 02:32:34.410
about rate neutrality than the 4.7-odd percentage
2666
02:32:35.880 --> 02:32:37.730
referenced earlier in that testimony?
2667
02:32:39.460 --> 02:32:44.420
Well, we could read my footnote 48, which says:
2668
02:32:44.420 --> 02:32:48.030
"Discount rates reflect the underlying time value
2669
02:32:48.030 --> 02:32:51.230
"of money and should do so for ratepayers
2670
02:32:51.230 --> 02:32:53.420
"as well as investors.
2671
02:32:53.420 --> 02:32:55.780
"The time value of money for ordinary people
2672
02:32:55.780 --> 02:32:59.300
"can range from relatively low rates
2673
02:32:59.300 --> 02:33:01.830
"that people can earn on bank savings accounts
2674
02:33:01.830 --> 02:33:05.830
"to very high discount rates such as 16 to 18%
2675
02:33:05.830 --> 02:33:08.040
"that is reflective of their actual short-term
2676
02:33:08.040 --> 02:33:11.050
"costs of borrowing, for example, credit cards.
2677
02:33:11.050 --> 02:33:14.350
"The 8% that I used in my analysis is reflective
2678
02:33:14.350 --> 02:33:16.940
"of utility investor's cost of money
2679
02:33:16.940 --> 02:33:19.670
"and also falls well within the range
2680
02:33:19.670 --> 02:33:22.630
"that could be considered appropriate for ratepayers."
2681
02:33:24.210 --> 02:33:27.540
In using that 8% figure, you calculated interest rate
2682
02:33:27.540 --> 02:33:31.580
savings under the PG&E plan of 694 million, correct?
2683
02:33:31.580 --> 02:33:36.580
Right, that was assuming that it was a 20-year period.
2684
02:33:36.710 --> 02:33:39.620
And in calculating that discounted amount,
2685
02:33:39.620 --> 02:33:43.600
you started discounting in year one in your calculation?
2686
02:33:43.600 --> 02:33:44.970
At the end of year one, yes.
2687
02:33:44.970 --> 02:33:46.180
So you would agree we'd also have
2688
02:33:46.180 --> 02:33:49.000
to start discounting in year one
2689
02:33:49.000 --> 02:33:53.370
the corresponding financing costs that are amortized?
2690
02:33:57.680 --> 02:34:00.570
I used a net present value calculation
2691
02:34:00.570 --> 02:34:05.570
and had zero as the cost, which is generally net present
2692
02:34:07.140 --> 02:34:10.950
value calculations do things at the beginning of the period.
2693
02:34:10.950 --> 02:34:13.400
You could make it do everything at the end.
2694
02:34:17.230 --> 02:34:21.840
Let me have you turn to the spreadsheet that,
2695
02:34:21.840 --> 02:34:26.090
let me take ALJ Allen's advice and give it the agreed title,
2696
02:34:27.970 --> 02:34:31.010
the spreadsheet that you identified earlier,
2697
02:34:31.010 --> 02:34:33.720
I think we called it, Cost of Debt Detail.
2698
02:34:45.030 --> 02:34:46.760
And that's a multi-page document?
2699
02:34:46.760 --> 02:34:47.673
Yes, your Honor.
2700
02:34:53.342 --> 02:34:55.030
Cost of Detail, got it.
2701
02:34:55.030 --> 02:34:56.640
Before we get into the details there,
2702
02:34:56.640 --> 02:35:00.290
I just wanna understand, let's take a step back.
2703
02:35:00.290 --> 02:35:03.450
Am I correct in understanding you have no disagreement
2704
02:35:03.450 --> 02:35:06.310
that 4.3% is a reasonable estimate
2705
02:35:06.310 --> 02:35:09.660
of the post-emergence cost of debt under PG&E's plan?
2706
02:35:15.700 --> 02:35:18.670
I preserved PG&E's calculation
2707
02:35:18.670 --> 02:35:21.600
on the right-hand side of the first page
2708
02:35:21.600 --> 02:35:24.990
and that, I have no disagreement with that calculation.
2709
02:35:26.950 --> 02:35:31.620
And then in your rework, and we'll get into the details
2710
02:35:31.620 --> 02:35:34.090
of that, at the end of the rework,
2711
02:35:34.090 --> 02:35:38.040
you're showing net savings after offsetting financial fees
2712
02:35:38.040 --> 02:35:40.070
and underwriting fees and whatnot,
2713
02:35:40.070 --> 02:35:43.160
net savings of nine million per year, is that correct?
2714
02:35:45.350 --> 02:35:50.210
That's the difference between the 183
2715
02:35:50.210 --> 02:35:53.230
that you calculate from the first set of figures.
2716
02:35:53.230 --> 02:35:56.370
Now, you ask yourself, why did I calculate
2717
02:35:56.370 --> 02:35:58.000
that first set of figures?
2718
02:35:59.010 --> 02:36:03.630
It's because that's the cost of debt
2719
02:36:04.620 --> 02:36:09.260
if we don't have the rate, the interest rate reduction,
2720
02:36:10.820 --> 02:36:15.807
that the POR proposes or accomplishes.
2721
02:36:17.870 --> 02:36:22.870
So you end up with a 4.35% cost of debt absent
2722
02:36:25.260 --> 02:36:29.490
that change that the POR brings.
2723
02:36:30.510 --> 02:36:31.970
I was trying to isolate.
2724
02:36:33.050 --> 02:36:35.100
And the net result of that isolation
2725
02:36:35.100 --> 02:36:37.810
in your calculation is a savings
2726
02:36:37.810 --> 02:36:39.460
of nine million dollars per year?
2727
02:36:40.680 --> 02:36:43.350
Yes, and the reason for that is
2728
02:36:43.350 --> 02:36:48.150
because the fees cost you a lot of money.
2729
02:36:49.806 --> 02:36:53.510
Now we're looking at 2021, the fees are
2730
02:36:53.510 --> 02:36:57.260
basically drinking up everything except the nine million
2731
02:36:58.360 --> 02:37:03.360
in the 70.9 million dollar reduction in interest rate costs
2732
02:37:08.140 --> 02:37:11.320
most of it's been drunk up by the fees.
2733
02:37:11.320 --> 02:37:16.320
Now, PG&E posited that we should compare the 4.3,
2734
02:37:21.920 --> 02:37:26.920
it's actually 4.31% interest rate that comes out
2735
02:37:27.540 --> 02:37:29.420
of the Plan of Reorganization,
2736
02:37:29.420 --> 02:37:32.500
which I have no disagreements with that,
2737
02:37:32.500 --> 02:37:36.000
that's post the reduction in interest rates,
2738
02:37:36.000 --> 02:37:39.840
that we should compare that with the 5.16
2739
02:37:39.840 --> 02:37:44.450
that was adopted in the cost capital decision for 2020.
2740
02:37:44.450 --> 02:37:48.310
The problem with doing that is that was a number--
2741
02:37:48.310 --> 02:37:49.880
I think you're getting well beyond my question.
2742
02:37:49.880 --> 02:37:54.530
Yeah, well, that was a number that was forecasted, okay.
2743
02:37:54.530 --> 02:37:57.570
So it has to do with attribution
2744
02:37:57.570 --> 02:38:01.010
and that's why we ended up with two sets of numbers.
2745
02:38:01.010 --> 02:38:02.900
And I do wanna go through this in some detail,
2746
02:38:02.900 --> 02:38:04.970
but just step by step, please.
2747
02:38:05.870 --> 02:38:10.220
So if we look at the upper left here,
2748
02:38:11.650 --> 02:38:15.430
pre-petition debt amortization, you say,
2749
02:38:15.430 --> 02:38:18.520
"No fees if no RSA renegotiation."
2750
02:38:18.520 --> 02:38:19.600
Do you see that?
2751
02:38:19.600 --> 02:38:20.433
Yes.
2752
02:38:20.433 --> 02:38:24.460
Now, in fact, there were fees incurred by PG&E
2753
02:38:24.460 --> 02:38:26.350
on pre-petition debt, correct?
2754
02:38:30.460 --> 02:38:31.430
Originally.
2755
02:38:31.430 --> 02:38:35.500
You mean when the debt was originally financed?
2756
02:38:35.500 --> 02:38:37.650
And aren't those fees amortized over the course
2757
02:38:37.650 --> 02:38:38.483
of the debt?
2758
02:38:41.970 --> 02:38:43.270
They may be.
2759
02:38:43.270 --> 02:38:44.190
But you haven't added them
2760
02:38:44.190 --> 02:38:45.810
to the average coupon in your number,
2761
02:38:45.810 --> 02:38:47.410
in your recalculation, have you?
2762
02:38:48.470 --> 02:38:50.610
No, but PG&E didn't add them
2763
02:38:50.610 --> 02:38:53.680
to their calculation either, so--
2764
02:38:53.680 --> 02:38:55.890
Look on the right-hand side, it is added there.
2765
02:38:55.890 --> 02:39:00.510
The pre-petition debt amortization 0.15% is there, isn't it?
2766
02:39:04.200 --> 02:39:05.800
Okay, you are correct.
2767
02:39:05.800 --> 02:39:08.390
I should have left the 0.15 in there.
2768
02:39:11.560 --> 02:39:14.220
And then in the next line, underwriting fees
2769
02:39:14.220 --> 02:39:18.590
on 5.925 billion of new issue.
2770
02:39:19.890 --> 02:39:23.480
PG&E had long and short-term debt authorization
2771
02:39:23.480 --> 02:39:26.080
requests pending when it declared bankruptcy, right?
2772
02:39:30.410 --> 02:39:31.780
I'm not sure.
2773
02:39:31.780 --> 02:39:33.290
Well, putting aside the details,
2774
02:39:33.290 --> 02:39:35.750
certainly you would understand that rate base was growing
2775
02:39:35.750 --> 02:39:38.790
and PG&E would have needed to issue new debt
2776
02:39:38.790 --> 02:39:42.080
regardless of bankruptcy, right?
2777
02:39:42.080 --> 02:39:46.280
I'm generally aware that PG&E has the need
2778
02:39:46.280 --> 02:39:51.280
to issue debt and potentially stock periodically.
2779
02:39:51.560 --> 02:39:54.730
And customarily that would involve underwriting, right?
2780
02:39:55.990 --> 02:39:56.880
Yes.
2781
02:39:56.880 --> 02:39:59.640
And on the right-hand side here,
2782
02:40:00.646 --> 02:40:04.900
you have a 0.02% for the underwriting fees
2783
02:40:04.900 --> 02:40:06.600
on that amount of new debt, right?
2784
02:40:11.220 --> 02:40:12.681
Yes, I do.
2785
02:40:12.681 --> 02:40:14.200
And there would be some corresponding,
2786
02:40:14.200 --> 02:40:16.670
roughly corresponding, number that would
2787
02:40:16.670 --> 02:40:18.510
be incurred for the new debt
2788
02:40:18.510 --> 02:40:20.910
if it was incurred outside of bankruptcy, right?
2789
02:40:36.349 --> 02:40:40.182
Let me just see if this is included in here.
2790
02:40:45.660 --> 02:40:49.890
No, you're correct because it is included in the column.
2791
02:40:49.890 --> 02:40:51.320
Thanks.
2792
02:40:51.320 --> 02:40:53.269
Stepping back from the details,
2793
02:40:53.269 --> 02:40:54.510
let's just think of a sort of a gestalt way
2794
02:40:54.510 --> 02:40:55.343
to think about this.
2795
02:40:55.343 --> 02:40:57.610
You understand that Southern California Edison's
2796
02:40:57.610 --> 02:41:00.870
current authorized cost of debt rising out
2797
02:41:00.870 --> 02:41:05.030
of the cost of capital proceeding is 4.74%.
2798
02:41:05.030 --> 02:41:05.930
Sound about right?
2799
02:41:08.940 --> 02:41:12.270
I haven't looked at their cost of capital recently.
2800
02:41:13.410 --> 02:41:15.740
Putting aside the exact number, you wouldn't suggest
2801
02:41:15.740 --> 02:41:18.310
that without the bankruptcy reorganization,
2802
02:41:18.310 --> 02:41:21.210
PG&E would have had a lower cost of debt
2803
02:41:21.210 --> 02:41:25.900
than Southern California Edison, would you?
2804
02:41:27.170 --> 02:41:28.720
I'm not suggesting anything.
2805
02:41:28.720 --> 02:41:31.080
I was just working the math given--
2806
02:41:31.080 --> 02:41:32.470
But would you agree, and I'm trying to,
2807
02:41:32.470 --> 02:41:34.480
I'm sorry, I interrupted you, go ahead.
2808
02:41:34.480 --> 02:41:37.850
I mean I worked the math basically.
2809
02:41:37.850 --> 02:41:40.040
I had, the data was available.
2810
02:41:41.510 --> 02:41:46.510
I went and I replaced the exchanged debt
2811
02:41:46.920 --> 02:41:51.920
with the old exchanged debt, so with the old interest rates
2812
02:41:52.500 --> 02:41:54.200
to bring it up to the higher amount.
2813
02:41:54.200 --> 02:41:57.810
So I'm, to the extent that PG&E said
2814
02:41:57.810 --> 02:42:02.810
that 4.31% was the correct cost of debt as compared
2815
02:42:02.930 --> 02:42:06.950
to the 5.16 in a cost of capital case,
2816
02:42:06.950 --> 02:42:10.180
all I did was an incremental analysis.
2817
02:42:10.180 --> 02:42:12.900
And I apologize, I probably should
2818
02:42:12.900 --> 02:42:16.490
have picked up a few hundredths it looks like
2819
02:42:16.490 --> 02:42:19.310
or maybe a 0.2%.
2820
02:42:20.360 --> 02:42:21.640
That's my mistake.
2821
02:42:22.790 --> 02:42:25.890
That would have raised the resulting cost
2822
02:42:25.890 --> 02:42:28.940
of capital to 4.5 maybe.
2823
02:42:28.940 --> 02:42:33.320
But the point here is I was trying to do a parallel analysis
2824
02:42:33.320 --> 02:42:38.320
so we can isolate the effect of the POR
2825
02:42:38.520 --> 02:42:43.520
and not the forecast error, or the forecast uncertainty.
2826
02:42:43.630 --> 02:42:45.632
Ms. Yap, I don't think there's
2827
02:42:45.632 --> 02:42:46.640
that question pending.
2828
02:42:46.640 --> 02:42:49.090
Mr. Allred, if you could ask your next question.
2829
02:42:49.090 --> 02:42:50.300
Ms. Yap, if you could make sure
2830
02:42:50.300 --> 02:42:53.210
that you're answering the question.
2831
02:42:53.210 --> 02:42:55.964
If you want more explanation to provide,
2832
02:42:55.964 --> 02:42:58.280
you can do that on redirect.
2833
02:42:58.280 --> 02:42:59.648
Mr. Allred.
2834
02:42:59.648 --> 02:43:00.481
Thank you, your Honor.
2835
02:43:00.481 --> 02:43:03.530
And I'm just asking independent of your calculation,
2836
02:43:03.530 --> 02:43:05.963
sometimes its useful to step back,
2837
02:43:05.963 --> 02:43:08.190
but before you dive into or after you try
2838
02:43:08.190 --> 02:43:11.370
to dive into the details of a complicated spreadsheet
2839
02:43:11.370 --> 02:43:15.870
and say, does this result seem consistent
2840
02:43:15.870 --> 02:43:17.290
with what one would expect
2841
02:43:17.290 --> 02:43:19.250
from a big-picture look at things?
2842
02:43:19.250 --> 02:43:24.250
You would not expect a pre-bankruptcy or non-bankruptcy PG&E
2843
02:43:24.660 --> 02:43:27.900
to have a lower cost of debt
2844
02:43:27.900 --> 02:43:29.710
than Southern California Edison, would you?
2845
02:43:29.710 --> 02:43:30.850
Objection, your Honor.
2846
02:43:30.850 --> 02:43:33.240
Ms. Yap has indicated that she is not familiar
2847
02:43:33.240 --> 02:43:35.770
with Southern California's cost of debt.
2848
02:43:35.770 --> 02:43:37.730
Overruled, it's a general question.
2849
02:43:41.570 --> 02:43:44.450
I would expect it to be generally similar,
2850
02:43:45.830 --> 02:43:48.830
but there are differences between the companies,
2851
02:43:48.830 --> 02:43:51.590
so, within the same ballpark,
2852
02:43:53.630 --> 02:43:56.820
assuming that PG&E was not in bankruptcy.
2853
02:44:10.420 --> 02:44:13.200
So if we were to take just the two changes
2854
02:44:13.200 --> 02:44:18.200
that you have noted of adding in the roughly 0.2%,
2855
02:44:18.980 --> 02:44:20.590
that would take the savings back
2856
02:44:20.590 --> 02:44:23.753
to over 40 million a year in 2021, right?
2857
02:44:31.510 --> 02:44:33.220
I can work the spread sheet
2858
02:44:33.220 --> 02:44:35.500
if you wanna ask that question.
2859
02:44:35.500 --> 02:44:38.000
I can't tell just off the top
2860
02:44:38.000 --> 02:44:39.830
of my head looking at the numbers.
2861
02:44:49.970 --> 02:44:52.690
But it would certainly change the 183.
2862
02:44:52.690 --> 02:44:55.810
I'm willing to agree with that, that the result
2863
02:44:55.810 --> 02:45:00.810
of increasing the 4.35% and you compare it to 5.16
2864
02:45:04.220 --> 02:45:07.280
and then you take the difference times the rate base,
2865
02:45:07.280 --> 02:45:10.260
that's gonna give you a lower number than 1.83.
2866
02:45:13.200 --> 02:45:17.460
And do you have any quarrel with the approach
2867
02:45:17.460 --> 02:45:20.400
of taking the revenue requirements
2868
02:45:20.400 --> 02:45:23.660
and applying these percentages to calculate savings?
2869
02:45:25.920 --> 02:45:28.280
I'm sorry, can you ask that question again, please?
2870
02:45:28.280 --> 02:45:30.530
The basic structure of this spreadsheet
2871
02:45:30.530 --> 02:45:35.530
is taking the coupon and the fees,
2872
02:45:37.690 --> 02:45:39.730
calculating the difference from the authorized cost
2873
02:45:39.730 --> 02:45:44.290
of debt and applying that to the revenue requirements
2874
02:45:44.290 --> 02:45:45.980
to get a revenue requirement savings, correct?
2875
02:45:48.540 --> 02:45:52.750
In my response to PG&E's data request,
2876
02:45:52.750 --> 02:45:57.750
I agreed that mathematically you take the incremental change
2877
02:45:59.720 --> 02:46:04.520
in debt times the capital share represented
2878
02:46:04.520 --> 02:46:07.080
by debt times the rate base,
2879
02:46:07.080 --> 02:46:10.700
you do end up with a revenue requirement impact.
2880
02:46:10.700 --> 02:46:12.020
I agree with that.
2881
02:46:12.020 --> 02:46:15.305
There's no math error in PG&E's calculation
2882
02:46:15.305 --> 02:46:20.305
that based on a 0.85% reduction in the cost of capital,
2883
02:46:21.370 --> 02:46:25.430
you would get 192 million dollar a year savings, right?
2884
02:46:25.430 --> 02:46:29.980
Again, in the response to PG&E's questions,
2885
02:46:29.980 --> 02:46:34.980
I did agree that mathematically you derive 192 million.
2886
02:46:35.620 --> 02:46:40.620
I just didn't agree with the attribution of that 0.85
2887
02:46:43.800 --> 02:46:46.850
to the POR because I don't think that's correct.
2888
02:46:50.888 --> 02:46:52.288
If you'll turn to page 23.
2889
02:47:07.180 --> 02:47:09.048
At the top of that page you say, quote:
2890
02:47:09.048 --> 02:47:12.600
"While I appreciate the fact that securitizing debt
2891
02:47:12.600 --> 02:47:16.350
"has the potential to improve PG&E's credit rating
2892
02:47:16.350 --> 02:47:20.090
"and correspondingly reduce overall debt costs,
2893
02:47:20.090 --> 02:47:23.190
"in my opinion the risk of securitization
2894
02:47:23.190 --> 02:47:24.560
"is too great."
2895
02:47:24.560 --> 02:47:25.393
Close quote.
2896
02:47:25.393 --> 02:47:26.400
Do you see that?
2897
02:47:26.400 --> 02:47:28.290
Yes, I did write that sentence.
2898
02:47:28.290 --> 02:47:32.270
And you agree that securitization does provide benefits?
2899
02:47:32.270 --> 02:47:35.870
There is a positive side of the ledger to securitization?
2900
02:47:35.870 --> 02:47:40.870
It moves debt off of the balance sheet effectively.
2901
02:47:41.700 --> 02:47:44.400
And provides for a lower cost finance source; right?
2902
02:47:45.410 --> 02:47:47.740
That's the theory, that is,
2903
02:47:47.740 --> 02:47:52.297
you clean up the balance sheet, you improve the look
2904
02:47:54.510 --> 02:47:58.400
to the rating agencies and the hope is that they improve.
2905
02:47:58.400 --> 02:48:00.870
And also strictly within the securitization
2906
02:48:00.870 --> 02:48:02.120
you can get a lower rate,
2907
02:48:02.120 --> 02:48:04.470
because of the securitization structure, right?
2908
02:48:06.610 --> 02:48:09.480
I'm sorry, ask the question one more time, please.
2909
02:48:09.480 --> 02:48:11.840
By using a securitization structure,
2910
02:48:11.840 --> 02:48:14.260
one can get a lower interest rate
2911
02:48:14.260 --> 02:48:16.990
than through other types of debt?
2912
02:48:16.990 --> 02:48:20.040
For the, you're talking about for the seven billion
2913
02:48:20.040 --> 02:48:23.920
that PG&E is requesting the securitization for?
2914
02:48:23.920 --> 02:48:26.870
Right, or for whatever amount, right
2915
02:48:26.870 --> 02:48:28.420
Not whatever amount, but for whatever amount
2916
02:48:28.420 --> 02:48:31.390
you're securitizing, you can get
2917
02:48:31.390 --> 02:48:34.400
that debt at a lower cost by securitizing.
2918
02:48:34.400 --> 02:48:37.280
Yes, because you do have the guarantee
2919
02:48:37.280 --> 02:48:39.000
of the stream of money.
2920
02:48:39.000 --> 02:48:39.890
And that can translate
2921
02:48:39.890 --> 02:48:41.740
into ratepayer benefits, fair to say?
2922
02:48:44.120 --> 02:48:45.920
It depends on whether you think
2923
02:48:45.920 --> 02:48:50.490
that the ratepayers should be paying that stream of money.
2924
02:48:51.510 --> 02:48:54.840
In other words, if you think that the ratepayers are obliged
2925
02:48:54.840 --> 02:48:58.320
to pay the seven billion, then securitizing it
2926
02:48:58.320 --> 02:49:01.250
would offer them a lower cost of debt
2927
02:49:02.090 --> 02:49:04.500
for paying that seven billion.
2928
02:49:04.500 --> 02:49:07.445
But it remains, in my mind, a question
2929
02:49:07.445 --> 02:49:09.610
as to whether the ratepayer
2930
02:49:09.610 --> 02:49:12.040
should be paying the seven billion.
2931
02:49:12.040 --> 02:49:16.080
And therein lies the rub from a policy perspective.
2932
02:49:16.080 --> 02:49:19.290
Now, the reason you expressed concern is because of risk.
2933
02:49:19.290 --> 02:49:20.570
Is the risk you're referring
2934
02:49:20.570 --> 02:49:23.500
to another possible PG&E bankruptcy?
2935
02:49:24.680 --> 02:49:25.720
Yes.
2936
02:49:25.720 --> 02:49:28.170
And do you believe the Commission has the authority
2937
02:49:28.170 --> 02:49:31.310
to order that rate credits proposed by PG&E
2938
02:49:31.310 --> 02:49:35.020
to offset the non-bypassable rate charges
2939
02:49:35.020 --> 02:49:38.240
for the proposed securitization would continue
2940
02:49:38.240 --> 02:49:41.240
in the event PG&E were to file for bankruptcy in the future?
2941
02:49:42.890 --> 02:49:45.580
You need to repeat the question, please.
2942
02:49:45.580 --> 02:49:48.680
Does this Commission have the authority to order
2943
02:49:48.680 --> 02:49:53.340
that rate credits that would be used as an offset
2944
02:49:53.340 --> 02:49:58.340
in a securitization to the rate charges would continue
2945
02:49:58.710 --> 02:50:02.900
in the event of a PG&E bankruptcy?
2946
02:50:02.900 --> 02:50:04.560
You know, I don't know.
2947
02:50:04.560 --> 02:50:07.260
I think that remains an open question as
2948
02:50:07.260 --> 02:50:10.970
to whether they would have that authority if PG&E were
2949
02:50:10.970 --> 02:50:12.810
to declare bankruptcy again.
2950
02:50:12.810 --> 02:50:15.000
If the Commission were to determine it did have
2951
02:50:15.000 --> 02:50:16.660
that authority, that would reassure you
2952
02:50:16.660 --> 02:50:18.410
on the risk that you cite, correct?
2953
02:50:19.860 --> 02:50:23.170
It would certainly address an issue.
2954
02:50:24.110 --> 02:50:25.860
It's the issue you've identified.
2955
02:50:26.810 --> 02:50:31.260
I've identified another issue as well, the concern
2956
02:50:31.260 --> 02:50:33.510
that the ratepayers, I mean if we wanna read
2957
02:50:33.510 --> 02:50:37.450
on in my testimony, the concern that the ratepayers feel
2958
02:50:37.450 --> 02:50:40.490
like maybe this isn't a cost that they ought
2959
02:50:40.490 --> 02:50:43.650
to be paying and that the Commission
2960
02:50:43.650 --> 02:50:48.370
hasn't addressed whether it's reasonable for them to pay it.
2961
02:50:49.980 --> 02:50:52.300
Assuming that the securitization is structured
2962
02:50:52.300 --> 02:50:54.390
to be rate neutrality with offsets,
2963
02:50:54.390 --> 02:50:57.060
and we'll discuss what those offsets are,
2964
02:50:57.060 --> 02:51:01.350
assuming that it's structured to be neutral to ratepayers,
2965
02:51:01.350 --> 02:51:02.950
that issue would go away, right?
2966
02:51:04.600 --> 02:51:09.600
If the Commission could somehow guarantee that those,
2967
02:51:12.720 --> 02:51:17.720
and I'm not, and in my opinion, I'm not convinced
2968
02:51:17.910 --> 02:51:22.910
that the Commission could do that, but hypothetically,
2969
02:51:23.130 --> 02:51:27.180
if the Commission were able to guarantee that
2970
02:51:27.180 --> 02:51:32.180
that stream of payments from PG&E would go forward
2971
02:51:34.050 --> 02:51:36.920
for the entire life of the securitization,
2972
02:51:40.260 --> 02:51:42.030
bankruptcy or no bankruptcy,
2973
02:51:43.530 --> 02:51:46.750
regardless of whatever liabilities PG&E might face
2974
02:51:46.750 --> 02:51:50.690
in the future, then, yes, that would address a concern.
2975
02:51:51.980 --> 02:51:56.650
Then I wanna now have you turn to PG&E-X-02,
2976
02:51:56.650 --> 02:51:58.090
which is another data request,
2977
02:51:58.090 --> 02:51:59.740
it's a one-pager in front of you.
2978
02:52:13.091 --> 02:52:14.960
Do you have that in front of you?
2979
02:52:14.960 --> 02:52:18.219
That's the six, seven, and eight?
2980
02:52:18.219 --> 02:52:20.317
Question six, seven and eight?
2981
02:52:20.317 --> 02:52:21.973
Okay.
2982
02:52:21.973 --> 02:52:23.860
And in the response to Q6, the second
2983
02:52:23.860 --> 02:52:26.400
to the last sentence begins quote:
2984
02:52:26.400 --> 02:52:29.970
"PG&E has not demonstrated that there is a market
2985
02:52:29.970 --> 02:52:32.170
"for additional securitized debt
2986
02:52:32.170 --> 02:52:33.880
"covering the earlier period."
2987
02:52:33.880 --> 02:52:35.280
Close quote.
2988
02:52:35.280 --> 02:52:36.113
Do you see that?
2989
02:52:36.113 --> 02:52:36.946
Yes.
2990
02:52:36.946 --> 02:52:37.779
Can you explain what that means?
2991
02:52:41.100 --> 02:52:42.910
Personally I have a concern
2992
02:52:42.910 --> 02:52:45.710
that you may saturate the market.
2993
02:52:45.710 --> 02:52:49.790
We're talking about really large sums of money, you know,
2994
02:52:49.790 --> 02:52:52.680
seven billion here, six billion there.
2995
02:52:52.680 --> 02:52:56.400
I mean in previous, if one goes back
2996
02:52:56.400 --> 02:52:59.060
and looks at previous securitizations,
2997
02:53:00.400 --> 02:53:02.260
10 billion was a lot of money.
2998
02:53:03.900 --> 02:53:08.900
And we're now dealing with the wildfire fund securitization
2999
02:53:10.330 --> 02:53:14.270
adopted by 1054, which is 11 billion
3000
02:53:15.294 --> 02:53:18.420
and we're looking at PG&E potentially coming in
3001
02:53:18.420 --> 02:53:21.460
with its proposed seven billion.
3002
02:53:21.460 --> 02:53:23.930
I mean it's just a question of whether the market
3003
02:53:23.930 --> 02:53:27.240
gets saturated, whether there's interest in that.
3004
02:53:27.240 --> 02:53:29.390
It's an empirical question.
3005
02:53:29.390 --> 02:53:31.914
You would expect experienced investment bankers
3006
02:53:31.914 --> 02:53:35.760
to have a good visibility on that?
3007
02:53:37.150 --> 02:53:40.490
Presumably they would, the market would signal
3008
02:53:40.490 --> 02:53:41.640
whether there was interest.
3009
02:53:41.640 --> 02:53:44.060
But from the Commission's perspective,
3010
02:53:44.060 --> 02:53:47.180
it's an issue that they should keep in mind.
3011
02:53:47.180 --> 02:53:50.151
There's not endless market
3012
02:53:50.151 --> 02:53:53.520
for different kinds of debt instruments.
3013
02:53:53.520 --> 02:53:56.570
There's consequences to having too much of,
3014
02:53:56.570 --> 02:53:58.790
if you will, too much of what PG&E
3015
02:53:58.790 --> 02:54:00.550
is considering to be a good thing.
3016
02:54:02.790 --> 02:54:07.600
On page 23 of your testimony where we are were,
3017
02:54:07.600 --> 02:54:10.270
if you go to line 10, it states, quote:
3018
02:54:14.730 --> 02:54:17.790
"Thus, the Commission should deny PG&E's proposal
3019
02:54:17.790 --> 02:54:21.560
"to securitize the seven billion dollars in debt costs
3020
02:54:21.560 --> 02:54:24.540
"and direct PG&E to use the NOLs
3021
02:54:24.540 --> 02:54:26.630
"to support the most appropriate form
3022
02:54:26.630 --> 02:54:29.810
"of unsecuritized debt that is available
3023
02:54:29.810 --> 02:54:33.690
"to PG&E to refinance the six billion dollars
3024
02:54:33.690 --> 02:54:37.600
"in short-term debt and the additional 1.35 billion
3025
02:54:37.600 --> 02:54:40.550
"due to the fire victim trust."
3026
02:54:40.550 --> 02:54:41.850
Close quote.
3027
02:54:41.850 --> 02:54:42.683
Do you see that?
3028
02:54:42.683 --> 02:54:43.683
Yes, I do.
3029
02:54:43.683 --> 02:54:45.860
And this refers back to what we were referring earlier,
3030
02:54:45.860 --> 02:54:50.000
the possibility of NOLs, shareholder asset NOLs,
3031
02:54:50.000 --> 02:54:55.000
being used to offset the dedicated rate stream
3032
02:54:55.030 --> 02:54:56.480
in the securitization, right?
3033
02:54:59.050 --> 02:55:03.810
Yes, we're referring to the NOLs,
3034
02:55:03.810 --> 02:55:06.730
or the tax savings associated with the losses.
3035
02:55:06.730 --> 02:55:10.040
So we're projecting forward that there will be a stream
3036
02:55:10.040 --> 02:55:12.940
of money that would otherwise have been paid
3037
02:55:12.940 --> 02:55:17.240
to the IRS that would be available to support the debt.
3038
02:55:17.240 --> 02:55:18.073
And--
3039
02:55:20.030 --> 02:55:23.030
And so you would agree it would be appropriate
3040
02:55:23.030 --> 02:55:25.390
to use NOLs generated by the payment
3041
02:55:25.390 --> 02:55:29.430
of wildfire claims costs to refinance the six billion
3042
02:55:29.430 --> 02:55:32.740
in temporary utility debt, as I read this, correct?
3043
02:55:33.740 --> 02:55:36.792
Yes, to the extent, I mean PG&E asserted
3044
02:55:36.792 --> 02:55:41.792
that it had those NOLs in sufficient levels
3045
02:55:42.000 --> 02:55:45.730
to be able to cover the cost of the securitization.
3046
02:55:46.700 --> 02:55:51.700
Presumably, it's reasonably close to the cost of debt
3047
02:55:52.310 --> 02:55:55.820
that's not securitized in the same manner.
3048
02:55:55.820 --> 02:55:58.120
And I understand that you oppose securitization.
3049
02:55:58.120 --> 02:56:00.600
But, to the extent that securitization
3050
02:56:00.600 --> 02:56:02.530
were approved by the Commission,
3051
02:56:02.530 --> 02:56:05.170
you would agree that those NOLs could equally be used,
3052
02:56:05.170 --> 02:56:08.060
instead, to offset the dedicated rate component
3053
02:56:08.060 --> 02:56:10.180
on customer bills, right?
3054
02:56:10.180 --> 02:56:12.290
Yes, the math would definitely work out.
3055
02:56:14.500 --> 02:56:15.650
No further questions.
3056
02:56:16.700 --> 02:56:18.170
Thank you, Mr. Allred.
3057
02:56:18.170 --> 02:56:19.003
Mr. Alcantar?
3058
02:56:23.774 --> 02:56:25.010
Good day, Ms. Yap, good to see you.
3059
02:56:25.010 --> 02:56:25.843
Good day.
3060
02:56:27.140 --> 02:56:29.570
Just really one question.
3061
02:56:29.570 --> 02:56:32.130
I'm interested in your definition,
3062
02:56:32.130 --> 02:56:34.930
as opposed to perhaps the question the way it was phrased
3063
02:56:34.930 --> 02:56:37.800
to you, of the definition of risk of securitization.
3064
02:56:39.345 --> 02:56:40.660
Could you clarify that for us, please?
3065
02:56:41.910 --> 02:56:45.410
Is it only the event of a future PG&E bankruptcy
3066
02:56:45.410 --> 02:56:48.771
or are there other risks you had in mind in your testimony
3067
02:56:48.771 --> 02:56:53.771
on page 23 (speaking off microphone).
3068
02:56:56.300 --> 02:57:00.060
I'm, as I think I've expressed in my testimony,
3069
02:57:00.060 --> 02:57:03.490
I am concerned that the ratepayers would,
3070
02:57:03.490 --> 02:57:06.730
there are circumstances under which the ratepayers
3071
02:57:06.730 --> 02:57:09.670
could basically be left holding the bag
3072
02:57:09.670 --> 02:57:11.970
and that's what I'm focused on here.
3073
02:57:12.950 --> 02:57:17.950
And then I also think there is a real issue as to whether,
3074
02:57:19.310 --> 02:57:22.520
you know, if that were, I mean if that were to occur
3075
02:57:22.520 --> 02:57:25.380
and the ratepayers are left holding the bag,
3076
02:57:25.380 --> 02:57:29.640
would the Commission otherwise have made the determination
3077
02:57:29.640 --> 02:57:34.640
that 100% of the seven billion dollar obligation
3078
02:57:34.640 --> 02:57:39.300
was just and reasonable to place in rates.
3079
02:57:39.300 --> 02:57:43.020
And so, there's this disconnect between what the Commission
3080
02:57:43.020 --> 02:57:46.820
would have done under ordinary circumstances
3081
02:57:46.820 --> 02:57:51.820
had PG&E come in and asked to recover those monies
3082
02:57:52.070 --> 02:57:54.612
and it has a right to file an application.
3083
02:57:54.612 --> 02:57:57.830
But, the Commission would have gone through that process.
3084
02:57:57.830 --> 02:58:01.650
That's the disconnect here that I'm very concerned about.
3085
02:58:01.650 --> 02:58:04.150
Could you compare your assessment
3086
02:58:04.150 --> 02:58:06.840
of the risk of securitization
3087
02:58:06.840 --> 02:58:09.750
with what you understand PG&E's view
3088
02:58:10.790 --> 02:58:13.340
of any risk of securitization?
3089
02:58:13.340 --> 02:58:14.750
Object to the form.
3090
02:58:16.590 --> 02:58:17.560
Overruled.
3091
02:58:20.690 --> 02:58:21.670
It's a little difficult,
3092
02:58:21.670 --> 02:58:24.580
'cause I don't know exactly what their definition is.
3093
02:58:24.580 --> 02:58:29.460
But, my understanding is the Commission
3094
02:58:29.460 --> 02:58:34.306
would attach a payment, a rate,
3095
02:58:34.306 --> 02:58:38.380
that is paid off for 20 years or 15 years,
3096
02:58:38.380 --> 02:58:43.050
whatever the life of the debt is and that's dedicated.
3097
02:58:45.480 --> 02:58:50.480
It can't be undone without violating the securities,
3098
02:58:50.920 --> 02:58:52.910
the terms of, I mean all sorts
3099
02:58:52.910 --> 02:58:57.910
of agreements are signed off in doing a securitization.
3100
02:58:57.930 --> 02:59:02.120
So it's not something, you know, in five years,
3101
02:59:02.120 --> 02:59:05.860
if PG&E's bankrupt, you can't just say, oh well,
3102
02:59:05.860 --> 02:59:08.580
we really didn't mean it, the ratepayers don't have to pay.
3103
02:59:08.580 --> 02:59:11.480
The ratepayers still have to pay that rate,
3104
02:59:11.480 --> 02:59:14.090
regardless of the circumstances.
3105
02:59:14.090 --> 02:59:15.770
That's my understanding.
3106
02:59:15.770 --> 02:59:18.100
That's the basis for my concern
3107
02:59:18.100 --> 02:59:21.140
about if there were a bankruptcy
3108
02:59:21.140 --> 02:59:25.020
that basically upset the apple cart
3109
02:59:25.020 --> 02:59:26.830
with respect to the NOLs.
3110
02:59:29.491 --> 02:59:30.324
I appreciate that response.
3111
02:59:30.324 --> 02:59:33.270
The question I think I'm trying to sort out
3112
02:59:33.270 --> 02:59:38.270
is in your review and assessment of PG&E testimony
3113
02:59:39.840 --> 02:59:43.363
associated with its optimism, if you will, with respect
3114
02:59:43.363 --> 02:59:46.750
to the benefits of securitization,
3115
02:59:49.306 --> 02:59:51.730
do you see any risk at all in their assessment?
3116
02:59:52.990 --> 02:59:55.560
Objection, vague, lacks foundation.
3117
02:59:55.560 --> 02:59:56.520
Overruled.
3118
02:59:58.720 --> 03:00:01.260
You know, I don't have their testimony in front of me,
3119
03:00:01.260 --> 03:00:05.040
so I can't really speak to what they were saying.
3120
03:00:06.670 --> 03:00:08.220
Nothing further, your Honor.
3121
03:00:08.220 --> 03:00:09.500
Thank you, Mr. Alcantar.
3122
03:00:09.500 --> 03:00:10.890
Mr. Bloom?
3123
03:00:10.890 --> 03:00:12.830
Thank you, your Honor.
3124
03:00:12.830 --> 03:00:13.790
Good afternoon, Ms. Yap.
3125
03:00:13.790 --> 03:00:15.047
Good afternoon.
3126
03:00:15.047 --> 03:00:15.880
My name is Jerry Bloom.
3127
03:00:15.880 --> 03:00:17.780
I'm here on behalf of the Tort Claimants Committee.
3128
03:00:21.860 --> 03:00:25.800
On page 10 of your testimony, you address the evolution
3129
03:00:25.800 --> 03:00:30.800
of PG&E's management structure, specifically talk about
3130
03:00:31.296 --> 03:00:34.950
that prior to 2000, PG&E had organized
3131
03:00:34.950 --> 03:00:37.490
its business around geographic regions.
3132
03:00:37.490 --> 03:00:38.580
Is that correct?
3133
03:00:38.580 --> 03:00:39.730
Yes, that is correct.
3134
03:00:40.630 --> 03:00:43.890
And then we had the PG&E bankruptcy in 2001.
3135
03:00:43.890 --> 03:00:48.890
But in the mid-2000s, you state in your testimony at page 11
3136
03:00:49.370 --> 03:00:53.270
that PG&E moved to a centralized organizational structure.
3137
03:00:53.270 --> 03:00:54.620
Is that correct?
3138
03:00:54.620 --> 03:00:56.210
Yes.
3139
03:00:56.210 --> 03:00:59.070
And now, in the questions you've already been asked
3140
03:01:00.332 --> 03:01:02.790
this afternoon by PG&E's counsel,
3141
03:01:02.790 --> 03:01:07.790
we find that PG&E has teed up a regional structuring plan
3142
03:01:10.280 --> 03:01:13.590
that it plans to submit in the future.
3143
03:01:13.590 --> 03:01:15.040
We just have a little bit of detail now,
3144
03:01:15.040 --> 03:01:17.470
but this is a plan that's forthcoming?
3145
03:01:17.470 --> 03:01:20.987
Yes, there was a half a page, I believe,
3146
03:01:20.987 --> 03:01:22.600
in their testimony.
3147
03:01:22.600 --> 03:01:23.433
That's correct.
3148
03:01:23.433 --> 03:01:26.210
And is your testimony, for clarification today,
3149
03:01:26.210 --> 03:01:28.840
that you would like to see that filed or a requirement
3150
03:01:28.840 --> 03:01:32.060
that that get filed in the General Rate Case,
3151
03:01:32.060 --> 03:01:33.110
in their next General Rate Case,
3152
03:01:33.110 --> 03:01:34.660
which would be the 2021 filing?
3153
03:01:37.360 --> 03:01:42.360
My proposal is that it, you would address
3154
03:01:45.400 --> 03:01:49.200
the Plan of Reorganization in the context
3155
03:01:49.200 --> 03:01:50.900
of the General Rate Case,
3156
03:01:52.090 --> 03:01:56.100
that PG&E would, well, let me back up.
3157
03:01:56.100 --> 03:01:59.830
That PG&E would take the year that it would have
3158
03:01:59.830 --> 03:02:04.370
between the time the Commission addressed the POR
3159
03:02:04.370 --> 03:02:07.890
and the time it filed its General Rate Case
3160
03:02:07.890 --> 03:02:12.621
for test year 2023, that that would be filed
3161
03:02:12.621 --> 03:02:17.621
in the fall of 2021 and PG&E would incorporate
3162
03:02:19.150 --> 03:02:24.150
in that filing the new organization, basically.
3163
03:02:25.120 --> 03:02:29.093
And I suspect that there may be some considerable
3164
03:02:30.330 --> 03:02:35.330
differences in the way they describe their organization,
3165
03:02:37.570 --> 03:02:41.380
it could be reflected in O&M costs, et cetera.
3166
03:02:41.380 --> 03:02:43.800
But whatever, it gets incorporated
3167
03:02:43.800 --> 03:02:45.860
in that General Rate Case filing.
3168
03:02:45.860 --> 03:02:48.540
That's what my vision was.
3169
03:02:48.540 --> 03:02:50.030
And in the questions you were asked
3170
03:02:50.030 --> 03:02:53.625
earlier this afternoon, do you have an idea
3171
03:02:53.625 --> 03:02:57.570
of the timing it will take that whole process,
3172
03:02:57.570 --> 03:03:00.390
if you will, you talk about the complications
3173
03:03:00.390 --> 03:03:02.490
and the pervasiveness of that change so
3174
03:03:02.490 --> 03:03:05.190
to actually go through those proposals in the GRC,
3175
03:03:05.190 --> 03:03:07.770
begin implementing, do you have any idea
3176
03:03:07.770 --> 03:03:08.603
what we're talking about,
3177
03:03:08.603 --> 03:03:10.521
what we're looking at for the time
3178
03:03:10.521 --> 03:03:11.780
to implement those changes?
3179
03:03:11.780 --> 03:03:14.700
Well, to do a major reorganization,
3180
03:03:14.700 --> 03:03:17.540
it's not something you can do in four months.
3181
03:03:17.540 --> 03:03:19.770
You can talk about it in four months.
3182
03:03:19.770 --> 03:03:21.200
You might have a better idea
3183
03:03:21.200 --> 03:03:23.280
than you have today in four months.
3184
03:03:24.230 --> 03:03:28.020
But, I think it takes years
3185
03:03:28.020 --> 03:03:32.290
to actually effect a reorganization.
3186
03:03:33.660 --> 03:03:36.480
Okay, and if you've been around
3187
03:03:36.480 --> 03:03:39.590
or listened to cross-examination by Mr. Abrams in this
3188
03:03:39.590 --> 03:03:42.850
and also from the victims' perspective who's worried
3189
03:03:42.850 --> 03:03:46.040
about what's gonna happen in the interim period,
3190
03:03:46.040 --> 03:03:48.440
there are questions of how the system operates
3191
03:03:48.440 --> 03:03:51.910
and what we do as we effectuate these longer-term changes
3192
03:03:51.910 --> 03:03:53.670
that are coming up, is that correct?
3193
03:03:54.620 --> 03:03:58.310
I have, I can appreciate
3194
03:03:58.310 --> 03:04:02.600
that Mr. Abrams has some concerns about the victims.
3195
03:04:02.600 --> 03:04:04.700
It's certainly reflected in his questions.
3196
03:04:05.650 --> 03:04:09.280
Okay, so if I understand your testimony, on page 11,
3197
03:04:10.190 --> 03:04:13.510
you discuss the matrix type organization
3198
03:04:13.510 --> 03:04:17.340
and you say that the implementation
3199
03:04:17.340 --> 03:04:21.150
of this would allow the Commission or PG&E
3200
03:04:22.013 --> 03:04:22.890
to start acting more quickly
3201
03:04:22.890 --> 03:04:24.630
in what you call an interim period.
3202
03:04:24.630 --> 03:04:28.720
So could you explain how that recommendation works
3203
03:04:28.720 --> 03:04:32.540
or what happens in the interim period and the necessity
3204
03:04:32.540 --> 03:04:35.540
of why you want something implemented in the interim period?
3205
03:04:39.330 --> 03:04:43.553
My, I mean, again, my vision was that the fully
3206
03:04:45.620 --> 03:04:48.600
fleshed out plan would be reflected
3207
03:04:48.600 --> 03:04:50.650
in the General Rate Case in about a year.
3208
03:04:51.982 --> 03:04:56.982
So in the meantime, there are steps that PG&E could take
3209
03:04:58.660 --> 03:05:02.200
to address the types of concerns
3210
03:05:02.200 --> 03:05:05.200
that have emerged and I describe it.
3211
03:05:05.200 --> 03:05:08.790
I think I described the creation
3212
03:05:08.790 --> 03:05:13.620
of the troubleshooter type person who would try
3213
03:05:13.620 --> 03:05:18.620
to integrate, I mean it is a matrix or a pseudo matrix type
3214
03:05:20.220 --> 03:05:25.220
of organization structure where you have two lines
3215
03:05:27.500 --> 03:05:29.860
of responsibility for an individual,
3216
03:05:29.860 --> 03:05:32.270
they have two lines of reporting.
3217
03:05:32.270 --> 03:05:36.370
So generally people, well, not always, but,
3218
03:05:36.370 --> 03:05:38.420
if you don't have a matrix organization,
3219
03:05:38.420 --> 03:05:40.170
you have a single line of reporting
3220
03:05:41.023 --> 03:05:44.640
and generally organized around some, you know,
3221
03:05:44.640 --> 03:05:46.760
you could be organized around geography,
3222
03:05:46.760 --> 03:05:49.110
but a lot of times, it's functional.
3223
03:05:49.110 --> 03:05:53.230
And PG&E's is what I'm calling task-oriented,
3224
03:05:53.230 --> 03:05:58.230
'cause it's functional with a twist, lots and lots
3225
03:05:58.400 --> 03:06:02.500
and lots of functions broken out into lots of detail.
3226
03:06:04.380 --> 03:06:07.280
So you create a situation where you begin
3227
03:06:07.280 --> 03:06:12.280
to draw the attention of people
3228
03:06:12.380 --> 03:06:15.250
who are focused on the function.
3229
03:06:15.250 --> 03:06:19.000
They're focused on the, I'm gonna go out and, you know,
3230
03:06:19.000 --> 03:06:22.480
I'm gonna plan something or I'm going to engineer something
3231
03:06:22.480 --> 03:06:25.790
or I'm gonna go repair something and I'm thinking of it
3232
03:06:25.790 --> 03:06:30.790
in terms of my limited focus and I'm, what we're trying
3233
03:06:31.890 --> 03:06:36.140
to do is broaden that focus so that the folks,
3234
03:06:36.140 --> 03:06:39.470
that they're thinking, as I believe I say in my testimony,
3235
03:06:39.470 --> 03:06:44.470
more holistically, so that for each geographic region,
3236
03:06:44.510 --> 03:06:47.670
you begin to get better communication
3237
03:06:47.670 --> 03:06:51.590
among the different task area
3238
03:06:51.590 --> 03:06:56.430
or task motivated people within a particular geography.
3239
03:06:56.430 --> 03:06:58.040
Now, they're still reporting back
3240
03:06:58.040 --> 03:07:01.790
to San Francisco or to the sub-regions.
3241
03:07:01.790 --> 03:07:03.730
So they still have that responsibility
3242
03:07:05.555 --> 03:07:06.860
in terms of quality control,
3243
03:07:06.860 --> 03:07:08.730
in terms of what they're supposed to be doing,
3244
03:07:08.730 --> 03:07:11.690
how fast they're doing it, but they begin
3245
03:07:11.690 --> 03:07:16.690
to have responsibilities for, let's compare notes.
3246
03:07:16.790 --> 03:07:20.050
And this troubleshooter, I was trying to think of something
3247
03:07:20.050 --> 03:07:22.660
that would provide an opportunity where you
3248
03:07:22.660 --> 03:07:25.430
have somebody who actually has responsibility
3249
03:07:25.430 --> 03:07:30.430
to weave together, across all the different tasks.
3250
03:07:30.960 --> 03:07:32.500
They're important tasks, right?
3251
03:07:32.500 --> 03:07:36.600
But, they're individually done and they'll be done
3252
03:07:36.600 --> 03:07:38.730
in different geography, you know,
3253
03:07:38.730 --> 03:07:41.830
different geographical areas at different times
3254
03:07:41.830 --> 03:07:46.093
and they're not thinking, oh, for the Lake County
3255
03:07:48.050 --> 03:07:51.690
which came up earlier, they're not thinking:
3256
03:07:51.690 --> 03:07:54.440
Oh, what's the best for Lake,
3257
03:07:54.440 --> 03:07:58.330
or are we covering all the bases in Lake County?
3258
03:07:58.330 --> 03:08:02.340
So the troubleshooter would start that up,
3259
03:08:02.340 --> 03:08:04.760
because it's gonna be their responsibility
3260
03:08:04.760 --> 03:08:08.300
to make sure that, from Lake County's perspective,
3261
03:08:08.300 --> 03:08:10.530
they're getting stuff covered.
3262
03:08:10.530 --> 03:08:13.670
And if they aren't, that troubleshooter knows who to go
3263
03:08:13.670 --> 03:08:18.670
to back in the various line positions to try to get
3264
03:08:19.610 --> 03:08:22.950
that effected and figure out, well, what's causing,
3265
03:08:22.950 --> 03:08:25.030
you know, why are things falling through the cracks
3266
03:08:25.030 --> 03:08:27.220
or why isn't something being covered.
3267
03:08:27.220 --> 03:08:29.930
Now, obviously, they're gonna be competing
3268
03:08:29.930 --> 03:08:33.150
with other demands on these resources.
3269
03:08:33.150 --> 03:08:35.350
So it's not a perfect, you know,
3270
03:08:35.350 --> 03:08:38.670
Lake County won't just get everything it wants,
3271
03:08:38.670 --> 03:08:41.520
but Lake County gets, if you will,
3272
03:08:41.520 --> 03:08:46.520
represented in the organization kind of geographically
3273
03:08:46.660 --> 03:08:49.430
before we get to the reorganization,
3274
03:08:49.430 --> 03:08:52.890
which is a year or two years or maybe even three years off.
3275
03:08:54.158 --> 03:08:55.800
So that was the idea.
3276
03:08:55.800 --> 03:08:59.750
You anticipated very well where my questions were going.
3277
03:08:59.750 --> 03:09:02.470
On page 14 of your testimony, in fact,
3278
03:09:02.470 --> 03:09:06.684
you discuss the horizontal linkage and proposals
3279
03:09:06.684 --> 03:09:11.684
and in that context you specifically, as you just referred,
3280
03:09:12.240 --> 03:09:15.920
discuss preventing things falling through the cracks
3281
03:09:15.920 --> 03:09:17.980
and troubleshooting in terms of that proposal.
3282
03:09:17.980 --> 03:09:19.130
Is that correct?
3283
03:09:19.130 --> 03:09:19.963
Yes.
3284
03:09:19.963 --> 03:09:20.796
And that's part of the (mumbles)
3285
03:09:20.796 --> 03:09:23.430
and is this horizontal linkage, 'cause I wasn't clear,
3286
03:09:23.430 --> 03:09:26.380
is that also an interim step or is that something
3287
03:09:26.380 --> 03:09:30.200
that's more generic or more structural?
3288
03:09:30.200 --> 03:09:35.200
It's an interim step and it could be set aside.
3289
03:09:35.460 --> 03:09:37.600
I mean the people that'll be thinking
3290
03:09:37.600 --> 03:09:40.941
about the reorganization, you know, they can think about
3291
03:09:40.941 --> 03:09:45.941
to the extent that leaving matrix kind of, you know,
3292
03:09:48.760 --> 03:09:50.780
within the organization, you could decide you wanna
3293
03:09:50.780 --> 03:09:53.180
have a mini matrix within it.
3294
03:09:53.180 --> 03:09:57.520
I think Ms. Powell might have referred, someone referred
3295
03:09:57.520 --> 03:10:01.120
to a matrix style organization, no, anyway,
3296
03:10:01.120 --> 03:10:04.330
one of the witnesses I heard referred
3297
03:10:04.330 --> 03:10:06.560
to a matrix or type organization.
3298
03:10:06.560 --> 03:10:09.650
I think it was in a customer service context.
3299
03:10:09.650 --> 03:10:13.440
So I mean you can have little matrix organizations.
3300
03:10:13.440 --> 03:10:15.330
So they could decide to preserve it
3301
03:10:15.330 --> 03:10:18.310
or they could decide to set it aside.
3302
03:10:18.310 --> 03:10:20.390
You would agree, then, and if I understand
3303
03:10:20.390 --> 03:10:23.090
the point you made earlier, it's really important
3304
03:10:23.090 --> 03:10:26.720
as we implement the Plan of Reorganization
3305
03:10:26.720 --> 03:10:29.740
and move forward and a lot of the details get filled in,
3306
03:10:29.740 --> 03:10:33.510
the Restructuring Plan, things come to the Commission,
3307
03:10:33.510 --> 03:10:37.370
to have a system in place that allows us to troubleshoot
3308
03:10:37.370 --> 03:10:40.060
or identify, as you said a minute ago,
3309
03:10:40.060 --> 03:10:43.770
as specific concerns or problems or issues arise,
3310
03:10:43.770 --> 03:10:46.220
a system in place to identify those things
3311
03:10:46.220 --> 03:10:48.230
to take care of them, not wait till two or three
3312
03:10:48.230 --> 03:10:51.340
or four years from now and in the meanwhile,
3313
03:10:51.340 --> 03:10:53.280
things fell through cracks or, God forbid,
3314
03:10:53.280 --> 03:10:57.010
we end up with another catastrophic event or things
3315
03:10:57.010 --> 03:11:02.010
that we don't want to be happening in the meantime?
3316
03:11:02.090 --> 03:11:05.050
These are meant to be things that
3317
03:11:05.050 --> 03:11:10.050
you would effect them very quickly and you could adapt them
3318
03:11:11.070 --> 03:11:16.070
to how things evolve as people's thinking
3319
03:11:16.780 --> 03:11:20.160
about what regionalization means
3320
03:11:20.160 --> 03:11:22.360
from an organizational perspective.
3321
03:11:23.560 --> 03:11:26.730
These interim steps are adaptable,
3322
03:11:26.730 --> 03:11:30.240
and you could fashion measures to try
3323
03:11:30.240 --> 03:11:32.190
to figure out if they're helpful or not
3324
03:11:33.067 --> 03:11:37.120
and you could adapt them to make them better, you know,
3325
03:11:37.120 --> 03:11:39.670
better, I mean maybe the troubleshooter
3326
03:11:39.670 --> 03:11:42.050
isn't the perfect solution.
3327
03:11:42.050 --> 03:11:44.718
You could come up with something that's even better,
3328
03:11:44.718 --> 03:11:48.840
but the point here is that you do have the options
3329
03:11:48.840 --> 03:11:51.390
to take immediate steps.
3330
03:11:51.390 --> 03:11:53.541
And I was struggling with the same thing too,
3331
03:11:53.541 --> 03:11:54.851
like call them.
3332
03:11:54.851 --> 03:11:55.684
What you're saying is we need to fashion,
3333
03:11:55.684 --> 03:11:57.680
whether they're measures or metrics
3334
03:11:57.680 --> 03:12:01.650
or some type of identifiable metrics
3335
03:12:01.650 --> 03:12:03.740
or things that would bring those issues
3336
03:12:03.740 --> 03:12:06.266
that you talked about, those concerns that surface
3337
03:12:06.266 --> 03:12:09.000
to the surface and get them taken along the way,
3338
03:12:09.000 --> 03:12:11.320
so we don't end up down the line saying,
3339
03:12:11.320 --> 03:12:13.160
how did we get here with a catastrophic event?
3340
03:12:13.160 --> 03:12:15.790
We can back that up, and take care
3341
03:12:15.790 --> 03:12:17.530
of those things as we effectuate change.
3342
03:12:17.530 --> 03:12:21.780
Or even if we have a restructuring plan in place,
3343
03:12:21.780 --> 03:12:23.560
as we're implementing it, if we get off track,
3344
03:12:23.560 --> 03:12:27.670
we can make adjustments along the way.
3345
03:12:27.670 --> 03:12:30.780
I would agree that it's definitely,
3346
03:12:30.780 --> 03:12:33.410
you could definitely make adjustments to this.
3347
03:12:33.410 --> 03:12:38.410
I mean and it would work within what PG&E's proposing
3348
03:12:39.220 --> 03:12:44.220
as the overarching, you know, regionalization plan.
3349
03:12:45.440 --> 03:12:50.440
This is an interim step that could be carried forward
3350
03:12:51.000 --> 03:12:53.570
or set aside, as appropriate.
3351
03:12:54.787 --> 03:12:55.760
Okay, so taking out what you said,
3352
03:12:55.760 --> 03:12:58.660
this is all within what PG&E is proposing,
3353
03:12:58.660 --> 03:13:00.143
is what you just said, correct?
3354
03:13:00.143 --> 03:13:02.760
Yes, it wouldn't slow it down.
3355
03:13:02.760 --> 03:13:04.190
It shouldn't slow it down.
3356
03:13:04.190 --> 03:13:09.110
It should, it should help.
3357
03:13:10.050 --> 03:13:13.280
And in fact, thinking about the work
3358
03:13:16.150 --> 03:13:18.220
that troubleshooters would do, I think,
3359
03:13:18.220 --> 03:13:21.030
would actually be inspirational, or should be,
3360
03:13:21.030 --> 03:13:24.900
in terms of thinking about what the real needs are,
3361
03:13:24.900 --> 03:13:26.880
in terms of regionalizing the company,
3362
03:13:27.748 --> 03:13:29.230
what are you really trying to accomplish.
3363
03:13:29.230 --> 03:13:31.840
And would you accept that inspiration
3364
03:13:31.840 --> 03:13:35.510
that you're talking about by being able to troubleshoot
3365
03:13:35.510 --> 03:13:38.610
and make course corrections, I think will be a nice way
3366
03:13:38.610 --> 03:13:42.170
to frame this, would certainly help victims
3367
03:13:42.170 --> 03:13:44.410
who need a peace of mind that what we're doing
3368
03:13:44.410 --> 03:13:45.920
is leading to a different result
3369
03:13:45.920 --> 03:13:47.640
or we can make corrections along the way
3370
03:13:47.640 --> 03:13:50.710
to optimize our ability to get to a better,
3371
03:13:50.710 --> 03:13:52.360
safer and more affordable system?
3372
03:13:53.740 --> 03:13:57.650
I would think that the victims
3373
03:13:57.650 --> 03:14:01.600
and the communities from which those victims
3374
03:14:01.600 --> 03:14:06.600
came would be reassured by the creation of a troubleshooter.
3375
03:14:09.510 --> 03:14:11.150
And we're gonna call it troubleshooter,
3376
03:14:11.150 --> 03:14:14.910
'cause that's what I chose, but, that type of position,
3377
03:14:14.910 --> 03:14:18.000
I think that would be enormously reassuring
3378
03:14:18.000 --> 03:14:22.880
to them because it would be demonstration
3379
03:14:22.880 --> 03:14:27.880
that the organization is taking the community perspective
3380
03:14:28.290 --> 03:14:33.290
very seriously, not just from a hold your hand
3381
03:14:33.290 --> 03:14:36.190
at the customer end of things,
3382
03:14:36.190 --> 03:14:40.850
but from across the fabric of of the corporation,
3383
03:14:42.010 --> 03:14:44.600
across the engineering, across the maintenance,
3384
03:14:44.600 --> 03:14:47.710
the personnel, that people would be,
3385
03:14:49.300 --> 03:14:54.300
there would be an attempt to fold in that tech--
3386
03:14:57.060 --> 03:14:58.190
I think you've answered the question already.
3387
03:14:58.190 --> 03:14:59.411
Okay.
3388
03:14:59.411 --> 03:15:00.940
I think she has too.
3389
03:15:00.940 --> 03:15:01.810
Thank you, Your Honor.
3390
03:15:01.810 --> 03:15:03.730
That concludes my cross.
3391
03:15:03.730 --> 03:15:05.218
Thank you, Ms. Yap.
3392
03:15:05.218 --> 03:15:07.620
Ms. Sheriff, do you have any redirect?
3393
03:15:07.620 --> 03:15:11.060
I have one question for Ms. Yap on redirect.
3394
03:15:11.060 --> 03:15:13.451
Okay, she's done most
3395
03:15:13.451 --> 03:15:14.292
of the redirect already herself.
3396
03:15:14.292 --> 03:15:15.640
(laughing)
3397
03:15:15.640 --> 03:15:18.720
Yes, I'm blessed with my witnesses, Your Honor.
3398
03:15:18.720 --> 03:15:20.350
Thank you.
3399
03:15:20.350 --> 03:15:24.390
Ms. Yap, on what's been marked for identification
3400
03:15:24.390 --> 03:15:28.690
as PG&E-X-2, which is the CLECA Response Number Six,
3401
03:15:31.340 --> 03:15:36.340
counsel for PG&E asked you about specifically the risk
3402
03:15:36.560 --> 03:15:40.150
of securitization from another PG&E bankruptcy.
3403
03:15:40.150 --> 03:15:44.170
You responded to that and also talked
3404
03:15:44.170 --> 03:15:47.140
about the concern over market saturation.
3405
03:15:47.140 --> 03:15:49.080
What other risks do you see
3406
03:15:49.080 --> 03:15:51.150
to the ratepayers of securitization?
3407
03:16:10.763 --> 03:16:11.840
I thought Mr. Alcantar asked that question.
3408
03:16:11.840 --> 03:16:13.880
Yeah, I'm sorry.
3409
03:16:13.880 --> 03:16:18.880
I see it as being the ratepayers are forever bound
3410
03:16:19.860 --> 03:16:23.380
to paying that, you know, paying that amount of money,
3411
03:16:23.380 --> 03:16:27.660
regardless of what happens downstream
3412
03:16:27.660 --> 03:16:29.720
to PG&E's ability to offset it.
3413
03:16:30.703 --> 03:16:32.390
I think that's really the major risk.
3414
03:16:33.725 --> 03:16:34.860
Okay, thank you.
3415
03:16:34.860 --> 03:16:36.800
Thank you, Ms. Sheriff.
3416
03:16:36.800 --> 03:16:38.640
Let's go off the record for a second.
3417
03:16:43.300 --> 03:16:45.500
Did you, identify (speaking off microphone).
3418
03:16:53.830 --> 03:16:55.670
I did not go over what was in 1E.
3419
03:16:55.670 --> 03:16:59.329
Would you like for me to have her go over what was in 1E?
3420
03:16:59.329 --> 03:17:00.672
(speaking off microphone) what it is.
3421
03:17:00.672 --> 03:17:03.100
Actually, (speaking off microphone) CLECA 1E
3422
03:17:04.727 --> 03:17:05.560
which is an errata to CLECA1.
3423
03:17:07.579 --> 03:17:08.847
Yes Your Honor.
3424
03:17:08.847 --> 03:17:09.680
Okay are there any objections to that?
3425
03:17:12.031 --> 03:17:14.750
Okay, let's not bother (speaking off microphone) CLECA 1E
3426
03:17:19.345 --> 03:17:20.540
unless there's objection
3427
03:17:20.540 --> 03:17:22.171
to that we'll wait at CLECA2
3428
03:17:22.171 --> 03:17:23.160
since it's not (speaking off microphone).
3429
03:17:23.160 --> 03:17:25.021
Yes, thank you.
3430
03:17:25.021 --> 03:17:26.520
Okay.
3431
03:17:28.460 --> 03:17:29.293
On the record.
3432
03:17:31.450 --> 03:17:32.440
I'm assuming there's no more
3433
03:17:32.440 --> 03:17:35.310
cross-examination for this witness.
3434
03:17:35.310 --> 03:17:36.670
Seeing none.
3435
03:17:36.670 --> 03:17:39.530
Ms. Sheriff, do you wish to move some exhibits?
3436
03:17:39.530 --> 03:17:40.363
Yes, your Honor.
3437
03:17:40.363 --> 03:17:41.940
May I please ask to have moved
3438
03:17:41.940 --> 03:17:46.940
into the record Exhibit CLECA-1 and Exhibit CLECA-1-E?
3439
03:17:48.230 --> 03:17:49.200
Is there any objection
3440
03:17:49.200 --> 03:17:51.270
to the receipt of those two exhibits?
3441
03:17:51.270 --> 03:17:52.870
Provided that I understand correctly
3442
03:17:52.870 --> 03:17:57.460
that 1-E completely replaces pages seven and eight of one,
3443
03:17:57.460 --> 03:17:59.180
I have no objection.
3444
03:17:59.180 --> 03:18:02.480
CLECA-1-E has a red line
3445
03:18:02.480 --> 03:18:04.620
that shows exactly what is changed.
3446
03:18:04.620 --> 03:18:05.500
Oh, okay.
3447
03:18:05.500 --> 03:18:07.450
And so it's pretty clear
3448
03:18:07.450 --> 03:18:11.270
what it does on pages seven and eight of CLECA-1.
3449
03:18:13.500 --> 03:18:17.700
Hearing no objection, CLECA-1 and CLECA-1-E are admitted.
3450
03:18:19.300 --> 03:18:22.860
Thank you, Ms. Yap, you may step down.
3451
03:18:22.860 --> 03:18:24.350
Off the record.
3452
03:18:24.350 --> 03:18:27.200
Let's get Kenney up here so that Ms. Sheriff can do that.
3453
03:18:37.769 --> 03:18:38.622
I can't reach.
3454
03:18:38.622 --> 03:18:41.289
(faint chatter)
3455
03:19:30.580 --> 03:19:31.680
On the record.
3456
03:19:32.740 --> 03:19:34.470
P&E, call your witness, please.
3457
03:19:35.860 --> 03:19:36.693
Thank you, Your Honor.
3458
03:19:36.693 --> 03:19:38.190
Mr. Robert Kenney.
3459
03:19:38.190 --> 03:19:39.050
Thank you.
3460
03:19:40.241 --> 03:19:41.730
Do you swear to tell the truth, the whole truth
3461
03:19:41.730 --> 03:19:42.970
and nothing but the truth?
3462
03:19:42.970 --> 03:19:43.803
I do.
3463
03:19:43.803 --> 03:19:45.110
Thank you, please be seated,
3464
03:19:45.110 --> 03:19:45.943
state your full name
3465
03:19:45.943 --> 03:19:48.510
and spell your last name for the record.
3466
03:19:48.510 --> 03:19:51.590
Full name is Robert, middle initial S, last name Kenney,
3467
03:19:51.590 --> 03:19:53.010
K-E-N-N E-Y.
3468
03:19:54.760 --> 03:19:56.030
Thank you.
3469
03:19:56.030 --> 03:19:57.426
Good afternoon, Mr. Kenney.
3470
03:19:57.426 --> 03:19:58.990
Can you state your position with PG&E?
3471
03:20:00.870 --> 03:20:03.680
Vice president, State and Regulatory Affairs.
3472
03:20:03.680 --> 03:20:07.650
Thank you and are you sponsoring PG&E Exhibit-1,
3473
03:20:07.650 --> 03:20:10.390
Chapters 10, 11 and 12?
3474
03:20:10.390 --> 03:20:11.759
Yes, I am.
3475
03:20:11.759 --> 03:20:13.390
Do you have any corrections to your testimony?
3476
03:20:13.390 --> 03:20:14.740
Two small ones, if I may.
3477
03:20:16.470 --> 03:20:19.720
Chapter 12, page four, line eight,
3478
03:20:21.410 --> 03:20:24.910
I used the word reaffirmance.
3479
03:20:24.910 --> 03:20:26.680
That should read reaffirmation.
3480
03:20:28.940 --> 03:20:33.940
Chapter 12, page five, line 20, the same correction,
3481
03:20:33.970 --> 03:20:37.070
replace the word reaffirmance with reaffirmation.
3482
03:20:38.240 --> 03:20:39.073
Thank you.
3483
03:20:39.073 --> 03:20:41.410
With those corrections, was that testimony
3484
03:20:41.410 --> 03:20:43.140
prepared by you or under your direction?
3485
03:20:43.140 --> 03:20:44.080
Yes, yes it was.
3486
03:20:44.080 --> 03:20:45.340
And with the corrections noted,
3487
03:20:45.340 --> 03:20:47.380
is it true and correct, to the best of your knowledge?
3488
03:20:47.380 --> 03:20:48.213
Yes, it is.
3489
03:20:48.213 --> 03:20:49.570
Thank you.
3490
03:20:49.570 --> 03:20:51.100
The witness is available for cross-examination.
3491
03:20:51.100 --> 03:20:52.450
Thank you, Mr. Manheim.
3492
03:20:52.450 --> 03:20:54.410
Today, the only cross of this witness
3493
03:20:54.410 --> 03:20:55.700
will be by Ms. Sheriff.
3494
03:20:55.700 --> 03:20:57.490
Go ahead, Ms. Sheriff.
3495
03:20:57.490 --> 03:20:58.323
Thank you.
3496
03:20:58.323 --> 03:21:00.590
Good afternoon, Mr. Kenney, Nora Sheriff for CLECA.
3497
03:21:00.590 --> 03:21:02.010
It's nice to see you again.
3498
03:21:02.010 --> 03:21:03.630
Likewise; good afternoon.
3499
03:21:03.630 --> 03:21:08.630
At page 10-2, lines six to seven, you reference, quote:
3500
03:21:09.700 --> 03:21:13.220
"A substantial reduction in the cost of debt."
3501
03:21:13.220 --> 03:21:14.370
End quote.
3502
03:21:14.370 --> 03:21:17.970
As the cause for the projected reduction in customer rates.
3503
03:21:20.650 --> 03:21:22.010
Let me know when you get there.
3504
03:21:25.770 --> 03:21:26.603
Yes.
3505
03:21:27.610 --> 03:21:30.620
Are you referring to anything besides the reduction
3506
03:21:30.620 --> 03:21:34.476
in the revenue requirement of about 70.7 million dollars
3507
03:21:34.476 --> 03:21:37.750
per year from lower interest rates?
3508
03:21:39.390 --> 03:21:44.320
So what's referenced there on page two, line 10,
3509
03:21:45.300 --> 03:21:47.700
as discussed in Mr. Wells' testimony,
3510
03:21:47.700 --> 03:21:50.821
is the savings that would be realized as a result
3511
03:21:50.821 --> 03:21:55.821
of debt that we would refinance at a lower rate.
3512
03:21:58.260 --> 03:21:59.600
And that is it, correct?
3513
03:21:59.600 --> 03:22:00.450
That's correct.
3514
03:22:02.400 --> 03:22:05.250
Okay, at page 10-3, you talk about the cost
3515
03:22:05.250 --> 03:22:07.630
to improve the safety of its system
3516
03:22:07.630 --> 03:22:10.570
that would have incurred, been incurred regardless
3517
03:22:10.570 --> 03:22:12.230
of the Plan of Reorganization.
3518
03:22:13.390 --> 03:22:16.130
Does that include your Wildfire Mitigation Plan
3519
03:22:16.130 --> 03:22:18.960
for 2020, 2021 and 2022?
3520
03:22:21.610 --> 03:22:22.770
You're referring to, sorry?
3521
03:22:29.200 --> 03:22:32.700
Lines nine to 10, changes in rates that result from costs
3522
03:22:32.700 --> 03:22:35.380
that PG&E would have had to incur
3523
03:22:35.380 --> 03:22:37.320
to improve the safety of its system.
3524
03:22:39.900 --> 03:22:41.660
That would be the type of costs
3525
03:22:41.660 --> 03:22:44.430
that is referenced there on lines 10 and nine and 10.
3526
03:22:44.430 --> 03:22:48.260
So costs associated with our Wildfire Mitigation Plan
3527
03:22:48.260 --> 03:22:51.860
are not costs attributable to the Plan of Reorganization
3528
03:22:51.860 --> 03:22:55.950
and are therefore, not subject to the 3292 neutral,
3529
03:22:55.950 --> 03:22:57.770
on average, analysis.
3530
03:22:57.770 --> 03:23:01.500
And does PG&E's three-year Wildfire Mitigation Plan
3531
03:23:01.500 --> 03:23:03.990
propose about 2.6 billion dollars per year
3532
03:23:03.990 --> 03:23:05.040
to harden the system?
3533
03:23:06.020 --> 03:23:07.760
That sounds directionally correct.
3534
03:23:07.760 --> 03:23:12.760
Okay, at page 10-4, line eight, you reference a quote,
3535
03:23:12.770 --> 03:23:14.860
"baseline of what would have been required
3536
03:23:14.860 --> 03:23:16.730
"absent Chapter 11."
3537
03:23:16.730 --> 03:23:18.800
I think we just discussed that that baseline
3538
03:23:18.800 --> 03:23:21.470
would include your Wildfire Mitigation Plan, correct?
3539
03:23:25.380 --> 03:23:26.880
Yes, the baseline of what would
3540
03:23:26.880 --> 03:23:29.470
have been required irrespective of the Chapter 11.
3541
03:23:29.470 --> 03:23:32.810
So costs associated with our Wildfire Mitigation Plan,
3542
03:23:32.810 --> 03:23:34.980
costs that appear in our General Rate Case,
3543
03:23:34.980 --> 03:23:36.060
for instance, those are costs
3544
03:23:36.060 --> 03:23:37.560
that would have been required
3545
03:23:37.560 --> 03:23:39.630
irrespective of the Chapter 11.
3546
03:23:39.630 --> 03:23:42.230
Does it include the pending application filed
3547
03:23:42.230 --> 03:23:46.900
on February 7th, 2020 for recovery of 899 million
3548
03:23:46.900 --> 03:23:50.520
for costs recorded in multiple wildfire mitigation
3549
03:23:50.520 --> 03:23:52.970
and catastrophic event memorandum accounts?
3550
03:23:54.000 --> 03:23:55.920
I believe you're referencing our application
3551
03:23:55.920 --> 03:23:57.767
for interim rate relief.
3552
03:23:57.767 --> 03:23:58.767
Uh-huh.
3553
03:23:58.767 --> 03:24:00.770
That would be separate and apart from the Chapter 11,
3554
03:24:00.770 --> 03:24:03.150
and those would be costs that would have been required
3555
03:24:03.150 --> 03:24:06.410
irrespective of the Chapter 11, so yes.
3556
03:24:06.410 --> 03:24:08.860
A simple yes or no is sufficient.
3557
03:24:08.860 --> 03:24:09.693
All right, sorry.
3558
03:24:09.693 --> 03:24:11.080
Does the baseline also include the application
3559
03:24:11.080 --> 03:24:12.830
to recover insurance cost
3560
03:24:12.830 --> 03:24:15.680
in your Wildfire Expense Memorandum Account
3561
03:24:15.680 --> 03:24:20.680
of about 498.7 million also filed February 7th?
3562
03:24:20.770 --> 03:24:21.720
Yes.
3563
03:24:21.720 --> 03:24:23.850
Okay, are you familiar with comparisons
3564
03:24:23.850 --> 03:24:26.680
of California's rates with other states rates?
3565
03:24:27.900 --> 03:24:29.410
Generally speaking, yes.
3566
03:24:29.410 --> 03:24:31.220
Would you agree that California rates tend
3567
03:24:31.220 --> 03:24:34.310
to be higher than the rates of other states?
3568
03:24:37.410 --> 03:24:39.240
Yes, generally.
3569
03:24:39.240 --> 03:24:41.740
You used to be a commissioner in another state, correct?
3570
03:24:41.740 --> 03:24:43.940
I did.
Missouri, right?
3571
03:24:43.940 --> 03:24:45.442
That's right.
3572
03:24:45.442 --> 03:24:47.250
Okay, do you recall whether California rates
3573
03:24:47.250 --> 03:24:49.770
are higher than Missouri's rates?
3574
03:24:51.210 --> 03:24:53.380
So I do recall that California's rates
3575
03:24:53.380 --> 03:24:55.670
are higher than Missouri's rates.
3576
03:24:55.670 --> 03:24:58.450
And if you're an industrial customer who uses a lot
3577
03:24:58.450 --> 03:25:03.450
of power on a regular basis, so 24-7, full shifts,
3578
03:25:05.660 --> 03:25:09.890
high load factor, you also have correspondingly high bills
3579
03:25:09.890 --> 03:25:11.990
associated with those high rates, correct?
3580
03:25:12.840 --> 03:25:14.590
Correspondingly or comparatively?
3581
03:25:16.170 --> 03:25:17.947
So compared to Missouri?
3582
03:25:17.947 --> 03:25:19.030
Uh-huh.
3583
03:25:19.030 --> 03:25:21.830
I suspect that would be true since the rates here
3584
03:25:21.830 --> 03:25:23.540
would be higher than the rates in Missouri.
3585
03:25:23.540 --> 03:25:25.240
But I don't recall what the industrial rates
3586
03:25:25.240 --> 03:25:26.842
were in Missouri.
3587
03:25:26.842 --> 03:25:29.240
But comparatively speaking, I think that would be right.
3588
03:25:29.240 --> 03:25:30.073
Thank you.
3589
03:25:30.073 --> 03:25:31.970
Your Honor, I have no further questions.
3590
03:25:31.970 --> 03:25:32.930
Thank you.
3591
03:25:33.814 --> 03:25:35.040
Any recross based on that?
3592
03:25:35.040 --> 03:25:37.510
Yeah, does PG&E evaluate rate impacts
3593
03:25:37.510 --> 03:25:39.550
on customers on the basis of the rate
3594
03:25:39.550 --> 03:25:41.100
or on the average monthly cost?
3595
03:25:42.540 --> 03:25:44.850
So when we look at the cost impact,
3596
03:25:44.850 --> 03:25:46.350
we're looking at the bottom of the bill.
3597
03:25:46.350 --> 03:25:49.480
So it's the bill overall rather than just the rate itself.
3598
03:25:49.480 --> 03:25:53.117
And how does PG&E's average monthly bill rate
3599
03:25:53.117 --> 03:25:56.140
compare in terms of the national average?
3600
03:25:56.140 --> 03:25:58.060
So compared to the national average,
3601
03:25:58.060 --> 03:26:01.100
we're either in line with or actually a little bit lower
3602
03:26:01.100 --> 03:26:02.860
and that's primarily attributable
3603
03:26:02.860 --> 03:26:05.170
to a couple of different issues: The temperate climate,
3604
03:26:05.170 --> 03:26:07.300
but also our leadership around energy efficiency.
3605
03:26:07.300 --> 03:26:09.233
Your Honor, I was asking
3606
03:26:09.233 --> 03:26:11.200
about industrial customer rates.
3607
03:26:11.200 --> 03:26:14.290
Is this specific to industrial customer rates?
3608
03:26:14.290 --> 03:26:15.150
Whatever, I mean,
3609
03:26:15.150 --> 03:26:18.280
this not something we actually need a lot of cross on.
3610
03:26:18.280 --> 03:26:21.730
I mean I think there's plenty of record on this issue.
3611
03:26:21.730 --> 03:26:25.920
So are you done?
3612
03:26:25.920 --> 03:26:26.820
I'm done.
3613
03:26:26.820 --> 03:26:27.653
Okay.
3614
03:26:28.652 --> 03:26:29.674
I assume you don't need to re-cross.
3615
03:26:29.674 --> 03:26:30.870
No, thank you.
3616
03:26:30.870 --> 03:26:32.780
Okay, (mumbles)
3617
03:26:33.940 --> 03:26:35.930
anything else for Mr. Kenney today?
3618
03:26:39.820 --> 03:26:41.590
Any housekeeping things we need
3619
03:26:41.590 --> 03:26:44.840
to take care of before we adjourn for the day?
3620
03:26:44.840 --> 03:26:48.630
I do have one quick question about the timeliness
3621
03:26:48.630 --> 03:26:49.980
of the hearing transcripts
3622
03:26:49.980 --> 03:26:52.610
with the opening brief deadline coming up.
3623
03:26:52.610 --> 03:26:54.860
Well, if I can stop going until five o'clock,
3624
03:26:54.860 --> 03:26:56.725
they can probably get them out faster.
3625
03:26:56.725 --> 03:26:59.970
We only have one so far, Your Honor.
3626
03:26:59.970 --> 03:27:01.470
Okay, well I'm sure the reporters
3627
03:27:01.470 --> 03:27:02.913
are working at it.
3628
03:27:02.913 --> 03:27:04.880
But you know, Judge Cook
3629
03:27:04.880 --> 03:27:09.390
and I have both been really maximizing hearing room time.
3630
03:27:11.450 --> 03:27:14.220
And to the extent that parties wanna keep
3631
03:27:14.220 --> 03:27:17.120
doing cross-examination on stuff that a lot
3632
03:27:17.120 --> 03:27:19.780
of I think is of questionable value to this Commission
3633
03:27:19.780 --> 03:27:22.770
and to briefing, we're gonna have long hearing days
3634
03:27:22.770 --> 03:27:25.030
and it's gonna slow down the transcript.
3635
03:27:25.030 --> 03:27:30.030
So I'm not making any promises on behalf of the reporters.
3636
03:27:30.400 --> 03:27:31.770
I know they work hard and are trying
3637
03:27:31.770 --> 03:27:34.160
to get the transcripts out quickly.
3638
03:27:34.160 --> 03:27:36.660
But if I'm running 9:00 a.m to 12:00 p.m. and 1:00 p.m.
3639
03:27:36.660 --> 03:27:39.360
to 5:00 p.m. that doesn't give them a lot of time
3640
03:27:39.360 --> 03:27:41.230
to get the transcripts ready.
3641
03:27:41.230 --> 03:27:44.310
So I'm sure they're getting them as quickly as they can.
3642
03:27:44.310 --> 03:27:48.700
But, you know, I don't have a huge amount
3643
03:27:48.700 --> 03:27:51.980
of sympathy if I'm having to do this kind of length
3644
03:27:51.980 --> 03:27:53.560
of hearing days to get through stuff
3645
03:27:53.560 --> 03:27:57.190
where frankly there's a lot of stuff that's,
3646
03:27:57.190 --> 03:27:59.050
there's cross-examination here that's not
3647
03:27:59.050 --> 03:28:00.910
on disputed factual issues
3648
03:28:02.370 --> 03:28:04.930
that I think parties could raise in briefs.
3649
03:28:04.930 --> 03:28:09.680
So I won't promise you anything other
3650
03:28:09.680 --> 03:28:11.030
than I'm sure the reporters are trying
3651
03:28:11.030 --> 03:28:13.490
to get the transcripts out as quickly as they can.
3652
03:28:14.690 --> 03:28:16.560
I would start again at 9:00 a.m.
3653
03:28:16.560 --> 03:28:18.910
I am cognizant that it's election day.
3654
03:28:20.796 --> 03:28:23.690
Well actually, we might, last week when I was doing this
3655
03:28:23.690 --> 03:28:25.020
and hoping that we'd be efficient,
3656
03:28:25.020 --> 03:28:28.740
I was thinking maybe we'd start at 10:30.
3657
03:28:28.740 --> 03:28:30.350
But given how it's going,
3658
03:28:30.350 --> 03:28:32.450
we'll start at 9:30 a.m. tomorrow morning.
3659
03:28:33.670 --> 03:28:34.590
Anything else?
3660
03:28:35.820 --> 03:28:36.653
Thank you.
3661
03:28:36.653 --> 03:28:38.590
The hearing is adjourned for the day.
3662
03:28:38.590 --> 03:28:39.423
Off the record.
3663
03:28:40.500 --> 03:28:41.650
Can we go over.