BILL ANALYSIS 1
1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
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|SB 427 - Peace |Hearing Date:May 11, 1999 | S|
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|As Amended:May 6, 1999 | | B|
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DESCRIPTION
This bill establishes an optional program to govern
electric utilities' tree maintenance activities.
Specifically, utilities that participate in the program
will be eligible to recover the full cost of tree trimming
and removal work from ratepayers, once the current rate
freeze is lifted, if the work meets the following
conditions:
1.For each tree removed, utilities must plant between one
and three five-gallon replacement trees, depending on the
diameter of the tree removed (one replacement tree for
removal of a 5 to 12 inch tree, two for a 12 to 18 inch
tree and three for a larger than 18 inch tree).
2.Utilities must give priority to planting replacement
trees at or near the tree removed, but may plant them
elsewhere.
3.If the planted trees have the potential to affect power
lines, they must be selected from a list of appropriate
trees adopted by a working group convened by the
California Public Utilities Commission (CPUC).
4.For tree planting, utilities must use local conservation
corps members or the California Conservation Corps,
unless volunteer laborers or non-profit organizations are
available.
5.Utilities must offer wood and wood chips from their tree
trimming activities to the adjacent property owner(s) and
must remove flammable debris if fire officials determine
removal is necessary for fire protection.
6.Utilities must provide notice to the public and affected
cities and counties prior to implementing a program
pursuant to this bill.
7.Utilities must consult with the California Department of
Forestry and Fire Protection (CDF) in order to minimize
the risk of plant disease transmission.
This bill also shields records of a utility's violations of
the CPUC's tree-wire clearance standards (Rule 35) and
CDF's firebreak standards from being used by the CPUC or
CDF as evidence or the basis of fines or penalties, if the
violations are corrected and if they do not result in
damage to any person or property.
KEY QUESTIONS
1.Should the Legislature establish detailed requirements
for the conduct of a utility tree maintenance program
when the program is optional?
2.If utility ratepayers are to bear the full cost of such a
program, should the cost be considered in the context of
the utility's overall distribution rates, or otherwise
subjected to some type of performance standard?
3.Should records of utilities tree-trimming violations be
shielded from use as evidence under certain
circumstances?
4.Are there alternatives to this bill's mitigation standard
that could provide an equivalent or greater public
benefit, such as adoption of a mature tree that is
threatened or a requirement that wires that are
threatened by landmark trees be rerouted, rather than
removing the tree?
BACKGROUND
Under existing law, the CPUC requires utilities to trim
trees to maintain reasonable clearance between overhead
wires and branches and foliage. Utilities are further
required to remove dead, rotten or diseased trees that
overhang or lean toward and may fall into wires.
Currently, there are no mitigation requirements imposed on
utilities for trimming or removing trees adjacent to
overhead wires.
This bill establishes a tree replacement requirement to
mitigate for the removal of trees by utilities, although
the mitigation is required only for utilities that
voluntarily participate in the program.
If a utility chooses to participate, it is eligible for
full cost recovery, outside the constraints of any
performance-based ratemaking (PBR) scheme, for tree
replacement and any other expenses associated with the
program. There are no performance or cost-effectiveness
criteria that would specifically apply to tree maintenance
costs, other than the utility's incentive to limit passing
costs on to its customers.
In addition to full rate recovery, this bill gives
utilities protection from records of tree maintenance
violations being used against them by the CPUC or CDF.
Of course, utilities that choose not to participate would
not be subject to the mitigation or related requirements,
and they would remain eligible for cost recovery for their
mandatory tree maintenance programs as they are today,
although the costs would not likely be exempt from a PBR.
COMMENTS
1.Competing objectives. Utilities are caught between
allegations that their tree trimming and removal
practices are insufficient to maintain safety and
reliability and pressure to reduce the overall costs of
their programs under PBR schemes. By imposing (albeit
optional) mitigation and related requirements for tree
removal that are funded by ratepayers, this bill has the
potential to both create a disincentive to tree removal
and increase costs when trees are removed.
2.What's an optional requirement? Under this bill, the
conditions that would apply to tree removal can be
practiced at the option of the utility. The extent to
which utilities would participate is uncertain, but one
can reasonably expect it would be minimal if utilities
found the mitigation requirements to be burdensome. If
the intent of the bill is to establish an effective
program to mitigate for the loss of trees, the Committee
may wish to consider whether it would be more useful to
establish a mandatory program that is funded outside of
utility distribution rates.
3.Mitigation alternatives. To the extent that this bill
establishes enforceable standards for mitigation of tree
removal, the Committee may wish to consider alternatives
to tree removal and replacement that could yield a
greater public and environmental benefit. In the case of
landmark, heritage or other trees with significant value,
an alternative solution to a tree vs. wire conflict would
be to reroute the wire underground rather than remove the
tree. Another mitigation alternative when utilities must
remove a tree would be to require them to "adopt" a tree
of similar stature and value that is threatened by
development.
4.Privileged information? This bill grants protected
status to records of a utility's violation of tree
maintenance standards if the violation is corrected and
doesn't result in damage. In such a circumstance, the
records could neither be used as the basis for any fine
or penalty or introduced in evidence in any
administrative, civil or criminal proceeding, except to
enforce reasonable compliance with tree maintenance
requirements. It is unclear whether this provision would
apply only to records associated with tree maintenance
conducted under the requirements of this bill, or to
records associated with any tree maintenance work.
The rationale for prohibiting the use of a record of
violation that had been duly corrected as the basis for a
fine or penalty for that violation is clear. The
potential to avoid a fine or other penalty is an
incentive for a utility to promptly correct a violation.
However, as evidence, records of violations and
corrective action could have significant value in an
administrative or judicial venue, either to establish a
pattern of violations, or to establish a pattern of
diligent corrective action. As such, the Committee may
wish to consider why this type of evidence should be
shielded from use by either the CPUC or CDF.
5.Rate recovery outside the PBR box. This bill would allow
strict recovery of the costs associated with the program
it establishes without regard to PBR requirements.
Arguably, this provision will diminish the incentive to
slash costs and undermaintain trees described in Comment
1. The Committee may wish to consider whether expenses
related to this aspect of utility service should be
separated from consideration by the CPUC within the
context of a PBR scheme and what other aspects of utility
service might qualify for similar treatment.
6.Double referral. Should the Committee approve this bill,
it will be re-referred to the Natural Resources and
Wildlife Committee for further review.
POSITIONS
Support:
California Association of Local Conservation Corps
Planning and Conservation League
Oppose:
Office of Ratepayer Advocates
PG&E
Sempra Energy
TURN
Lawrence Lingbloom
SB 427 Analysis
Hearing Date: May 11, 1999