Background

Over 12 million trees in the mountainous regions of Riverside, San Bernardino, and San Diego counties have been weakened by years of drought and are dead or dying due to an infestation of bark beetles. This situation has created a potential hazard to the people and property in these communities due to imminent fire danger.

On March 12, 2002, the Board of Supervisors of Riverside County passed a resolution finding "that due to the Epidemic Infestation of bark beetles problems causing a condition of extreme peril to life and property necessitates the declaration of the existence of an emergency." It based that finding on findings:

· that the method for eradicating and stopping the spread of this voracious insect is to fell infected trees and treat the stumps with insecticide;

· that the existence of these extremely dangerous conditions is beyond the control of the services, personnel, equipment, and facilities of the County of Riverside; and

· that this declaration is being sought to assist us in dealing with this very serious threat to our public safety as well as the destruction of our forested communities.

On April 23, 2002, the Board of Supervisors of San Bernardino County adopted a resolution that proclaimed the existence of a local emergency on both public and private lands (emphasis added) located in the San Bernardino National Forest and requested the Governor to proclaim a state of emergency due to the bark beetle infestation. On September 24, 2002, the Board amended the resolution to include the Angeles National Forest, Mt. Baldy and Lytle Creek communities. This resolution addressed drought, bark beetle infestation, fire conditions, flood control, ecological, environmental, and economic issues. The supervisors said "Since the original April 2002 emergency proclamation, the bark beetle infestation has increased in an exponential manner based primarily upon severe and extended drought conditions in addition to unseasonably high summer weather temperatures. The bark beetle infestation has now developed into a much larger and more diversified problem, which encompasses fire, environmental, ecological, flood control, and economic implications. The communities of Wrightwood, Crestline/Lake Gregory, Lake Arrowhead, Running Springs and the Big Bear Lake area are affected by this emergency. Based upon this scope, mitigation efforts will be extensive and multi-jurisdictional."

On March 7, 2003, the Governor issued a Proclamation declaring a State of Emergency in the impacted areas of Riverside, San Bernardino, and San Diego counties. The Emergency Proclamation requested the Commission to "direct utility companies with transmission lines in Riverside, San Bernardino, and San Diego counties to ensure that all dead, dying and diseased trees and vegetation are completely cleared from their utility right-of-ways to mitigate the potential fire danger."

In response to the Emergency Proclamation, the Commission issued Res. E-3824 dated April 3, 2003, which ordered Southern California Edison Company (SCE) and other utilities to work with the California Department of Forestry and Fire Protection (CDF) and other appropriate agencies to, "take all reasonable and necessary actions to implement the applicable provisions of the Emergency Proclamation to mitigate the increased fire hazard by removing dead, dying or diseased trees from falling or contacting distribution and transmission lines within their rights of way. . . ." Res. E-3824 also directed SCE to activate its Catastrophic Event Memorandum Account (CEMA)¹ to record the costs of tree removal and incremental support costs. SCE notified the Commission that it activated its Bark Beetle CEMA as directed effective April 3, 2003. The Resolution also authorized SCE to submit annual advice letters requesting recovery of the bark beetle costs and to recover in rates the amounts determined to have been reasonably incurred. The resolution did not set a date for commencement of the tree removal period for reimbursement.

During the following months SCE received numerous inquiries from property owners who had actively removed dead or dying trees that could have impacted SCE lines about whether it would reimburse their past or future costs for tree removal. On August 8, 2003, SCE filed AL 1730-E which requested Commission authorization to begin providing property owners reimbursement for necessary tree removals that occurred after April 3, 2003, the date Res. E-3824 was issued, and directed SCE to activate its CEMA. AL 1730-E also presented other possible dates for the Commission to consider when establishing a date that would be used as the commencement of the period for reimbursements.² Some property owners filed comments on AL 1730-E requesting that the Commission consider a commencement date prior to April 3, 2003.

On August 29, 2003, SCE received notification from the Director of the Energy Division that AL 1730-E was approved effective April 3, 2003 and directed SCE to " . . . reimburse eligible property owners in accordance with SCE's proposed criteria for trees necessarily removed after April 3, 2003."

In his complaint, Dick Schattinger (Schattinger), who lives in Lake Arrowhead, San Bernardino County, requests the Commission to change the start date for tree removal reimbursement from April 3, 2003 to a date in the summer of 2002 to include those parties who removed trees quickly because of the urgency of the situation (Schattinger's trees were removed December 11, 2002). The tree removal cost to Schattinger was $4,450. He filed a claim for reimbursement with SCE, but was rejected because the costs were incurred prior to April 3, 2003. He then sued SCE under our Expedited Complaint Procedure (ECP).³ The presiding Administrative Law Judge (ALJ) terminated the ECP and recalendared the case under our regular procedures in the public interest. Public hearing was held November 15, 2004.

SCE is sympathetic to Schattinger's situation and also to that of the many other property owners who have requested SCE to issue reimbursements for trees removed prior to April 3, 2003. However, it says it cannot resolve this matter because to do so would be in conflict with the Commission's directive on this matter and would jeopardize SCE's ability to seek recovery of these costs in rates. SCE does not have the authority to record costs in its CEMA account that were incurred prior to April 3, 2003. SCE argues that if the Commission grants Schattinger's request there will be no avenue for SCE to seek rate recovery for the reimbursement paid to Schattinger, and a precedent will have been established for hundreds, and possibly thousands of other property owners to seek similar reimbursements. The costs for these reimbursements are estimated to be millions of dollars.

The presiding ALJ determined that the evidence was persuasive that persons in complainant's position should receive reimbursement for tree removal in response to the emergency proclamations issued by the Boards of Supervisors of San Bernardino, Riverside, and San Diego counties in 2002. Persons who promptly responded to the proclamations should not be barred from recovery because they were prompt, while persons who delayed their response until April 2003 are compensated. The ALJ agreed with SCE's argument that under Res. E-3824 and AL 1730-E it cannot compensate persons in Schattinger's position and recover those costs in its CEMA account. In the ALJ's opinion these persons should be compensated by SCE and SCE should be reimbursed. To reach this result, he determined that Res. E-3824 should be modified to allow for reimbursement to those who removed infected trees in response to the emergency proclamation of San Bernardino, Riverside, and San Diego counties. To provide the necessary procedural foundation for a possible modification of Res. E-3824, on January 27, 2005, he issued an ALJ Ruling (Ruling) as follows:

1. This complaint shall be deemed a Petition to Modify Resolution E-3824, pursuant to Commission Rules of Practice and Procedure 42 and 47.

2. The Process Office shall serve copies of this Ruling on all parties to Resolution E-3824 and Application 02-05-004.

3. The procedures set forth in Rule 47 shall apply to this Ruling.

4. I recommend that the date for commencement of the tree removal period for reimbursement be March 12, 2002.