5. Description of CEMA Events

Resolution E-3238 established two specific criteria that must be met to record costs in the CEMA. The first criterion is that a catastrophic event is defined as one which results in the official declaration of a disaster by a competent state or federal authority. The second criterion is that, should a declared disaster occur, the utility should inform the Commission's Executive Director by letter within 30 days after the catastrophic event, if possible, if the utility has started recording costs in the CEMA. PG&E contends that the events described below meet the criteria established in Resolution E-3238.

A. February 1998 Storms

In late January 1998, a series of storms swept through California with high winds, heavy rains, and snow causing widespread flooding, mudslides, road closures, and power outages. On February 4, 1998, Governor Wilson declared a state of emergency; nine of the 10 counties in this declaration were located in PG&E's service territory. On February 9, 1998, President Clinton declared 27 counties disaster areas; 24 of the counties were located in PG&E's service territory. During subsequent days, Governor Wilson declared a state of emergency for additional counties. By February 18, 1998, a total of 33 counties were declared in a state of emergency due to the storms.

On March 6, 1998, PG&E filed its CEMA letter providing notice that costs would be recorded in the CEMA. There was widespread damage to PG&E's electric³ and gas facilities, with the majority of the damage occurring on the electric distribution system. PG&E seeks recovery of $4.8 million in revenue requirements for restoration costs.⁴

B. 1997 New Year's Flood

Beginning the last week of December 1996, northern California was hit by severe rain and flooding. On January 2, 1997, Governor Wilson declared a state of emergency in 25 northern California counties. On January 4, 1997, President Clinton declared 37 northern California counties disaster areas. By

January 13, 1997, Governor Wilson had declared a state of emergency in 46 counties.

On February 3, 1997, PG&E filed its CEMA letter providing notice that costs would be recorded in the CEMA. In the storm and flood, electric and gas facilities were destroyed or damaged. The majority of the damage was to PG&E's hydroelectric generation facilities. In 1998, PG&E received $50 million in insurance proceeds for the damage incurred on PG&E's system as a result of this flood. Consistent with the principles established in PG&E's 1987 GRC D.86-12-095, PG&E applied the insurance proceeds first to expenses, with remaining dollars applied to capital. This disaster is the only CEMA event for which PG&E received insurance proceeds. PG&E seeks recovery of $3.0 million in revenue requirements for restoration costs.

C. March 1995 Storms

Beginning on March 8, 1995, a series of powerful storms battered California for over a week. The storms consisted of high winds, heavy rains, and snow causing widespread flooding, mudslides, road closures, collapsed bridges, and power outages. On March 12, 1995, President Clinton declared 39 counties disaster areas. Fifty-seven counties were declared disaster areas by March 28, 1995. These included 48 counties in PG&E's service territory.

On April 6, 1995, PG&E filed its CEMA letter providing notice that costs would be recorded in the CEMA. The March 1995 storms caused widespread damage to PG&E's electric and gas facilities. Electric transmission and distribution equipment damaged by the storm included poles, transformers, and several thousand spans of wire. A significant number of gas transmission crossings were exposed due to storm runoff and flooding. PG&E seeks recovery of $18.6 million in revenue requirements for restoration costs.

D. January 1995 Storms

Beginning on January 6, 1995, a series of storms swept through California. The storms lasted for over a week with heavy rains, snow, and high winds which caused widespread flooding, landslides, and power outages. On January 9, 1995, Governor Wilson declared a state of emergency. On January 10, 1995, President Clinton declared 24 counties disaster areas. By January 6, 1995, 38 counties were declared disaster areas.

On February 3, 1995, PG&E filed its CEMA letter providing notice that costs would be recorded in the CEMA. Of the 38 counties declared disaster areas, 29 were located in PG&E's service territory. The storms caused significant damage to the electric transmission and distribution systems. The storms also damaged the Geysers Power Plant cooling towers and turbine buildings. PG&E seeks recovery of $19.5 million in revenue requirements for restoration costs.

E. Northridge Earthquake

On January 17, 1994, an earthquake measuring 6.6 on the Richter scale occurred in Northridge. The Sylmar converter facility, which is owned 50% by Southern California Edison Company and 50% by the Los Angeles Department of Water and Power, was damaged. The Sylmar facility is part of the California Companies Pacific Intertie Agreement (Intertie Agreement). PG&E's service area was not affected by the earthquake; however, PG&E is a participant in the Intertie Agreement.

Under the Intertie Agreement, PG&E is responsible for 50% of the shared costs of repairing the facility. On February 11, 1994, PG&E filed its CEMA letter providing notice that costs would be recorded in the CEMA. PG&E seeks recovery of $1.3 million in revenue requirements for restoration costs.

F. Calaveras and Shasta County Fires

On August 16, 1992, a fire started in Calaveras County. The fire burned nearly 20,000 acres of land and destroyed 80 structures. The fire was declared under control by August 23, 1992. On August 20, a fire started in Shasta County, burning 64,000 acres of land and destroying 577 structures. The fire was 90% controlled by August 28, 1992. On August 29, 1992, President Bush declared these counties disaster areas.

On September 15, 1992, PG&E filed its CEMA letter providing notice that costs would be recorded in the CEMA. The fires destroyed or damaged electric transmission and distribution facilities. PG&E seeks recovery of $5.0 million in revenue requirements for restoration costs.

G. Oakland/Berkeley Hills Fire

On October 20, 1991, a fire began in the Oakland/Berkeley Hills. The fire was declared under control on October 23, 1991. The fire burned 1,600 acres in the cities of Oakland and Berkeley and destroyed over 2,800 homes. On October 20, 1991, Governor Wilson declared a state of emergency for the area. On October 22, 1991, President Bush declared these cities disaster areas.

On November 19, 1991, PG&E filed its CEMA letter providing notice that costs would be recorded in the CEMA. The fire destroyed or damaged electric and gas facilities in PG&E's Central and Bay Divisions.⁵ As quickly as possible, PG&E installed facilities to return service to its original state preceding the fire. At the same time, on behalf of the cities of Oakland and Berkeley, PG&E sought Commission authority to install underground electric facilities to replace the overhead facilities that were destroyed in the fire with all costs of the undergrounding recorded in CEMA and borne by all PG&E ratepayers. D.92-12-016 addressed PG&E's application. Conclusion of law 17 states:

PG&E's cost of the restoration of service following the fire (including the cost of the overhead system) and the cost of the undergrounding project, less the contribution by the Cities and other amounts discussed herein, shall be recorded in the CEMA for later review by the Commission and recovery in accordance with Resolution E-3238.

PG&E contends that the costs reflected in its filing are consistent with D.92-12-016. PG&E seeks recovery of $23.5 million in revenue requirements for restoration costs.