ALJ Ruling Revises Schedule and Invites Comments on Public Outreach Strategies and Proposals to Mitigate Rate Increases

Commission Identified Cost/Revenue Reducing Proposals:

1. Move some or a subset of some categories of wildfire mitigation costs (e.g., undergrounding, enhanced vegetation management, distribution system hardening) to non-ratepayer sources of funding.
2. Reduce Investor-Owned Utilities’ (IOUs) authorized Return on Equity.
3. In the first phase of General Rate Cases, require IOUs to file an alternative revenue request constrained by Consumer Price Index.

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Commission Identified Cost Allocation & Rate Design-Related Proposals:

1. Implement an income-based fixed charge in which the amount charged progressively increases for higher income households.
2. Expand implementation of Percent of Income Payment Plan (PIPP) pilot programs.
3. Authorize IOUs to deploy capital and recover costs for building decarbonization upgrades via tariffed on-bill structures that enable participation regardless of income, credit score, or renter status.
4. Institute fixed charge or surcharge for customers living in high fire threat districts.
5. Pursue rate reform that could include one or more of the above proposals and/or additional proposals such as expansion of critical peak pricing, time of use, or other rate mechanisms that focus on reducing rates to something that better reflects the marginal costs of electricity.

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Commission has posed the following questions for party comment:

1. How would/could we account for costs of wildfire mitigation investments and hardening of IOU owned assets with non-ratepayer dollars? How would/could use of non-ratepayer dollars covering wildfire mitigation measures and improvement impact the IOU earnings?
2. Should wildfire mitigation funding come from an issuance of a state bond or the General Fund, if funding moved out of rate base? Would/could there be benefits to having a state transmission authority?
3. Should IOU Return on Equity ("ROE") be reduced to the national average or lower, in light of the common operating risks faced by California IOUs as well as the potential for ROE to substantively impact rates?
4. Should other non-ratepayer options for funding be explored to cover some or all of the costs for public interest-oriented programs?

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Public Outreach & Engagement Strategies

• In the course of gathering input on the most compelling proposals addressed at the 2022 Affordability En Banc, the Commission will host a series of public town hall-style “Listening Sessions” around the state over the summer and fall of 2022 to hear from the public on regional affordability issues.
• These Listening Sessions will take place in locations that represent the diverse geography and demographics of California, including the San Joaquin Valley, eastern San Diego County, and other places near or in designated Areas of Affordability Concern, according to the annual Affordability Report. At least one Listening Session will offer an option for virtual participation.
• In comments in response to this ruling, parties are invited to share any feedback on strategies for maximizing these listening sessions to ensure that robust public input helps to fully inform the proposals we prioritize in this proceeding.
• We solicit feedback on topics such as specific regions where the listening sessions should be held, communities that have experienced particularly difficult electric and gas affordability challenges, strategies for ensuring community input is meaningfully incorporated into commission work, staff presentations and engagement, and possible discussion facilitators, among other topics.

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Schedule Update