June 13, 2019 - From the June, 2019 issue

CPUC's Transition to a Resilience Agency: Commissioner Cliff Rechtschaffen

The wildfires afflicting California in recent years have been some of the largest, deadliest, and most devastating in the state’s history. Though utility infrastructure is only one of the many known causes of increasingly frequent conflagrations, the flames it sparks tend to be the most extensive. In response, the California Public Utilities Commission is quickly moving from its traditional area of expertise—financial regulation and ratemaking—to playing an active role in climate adaptation, resilience, and public safety. In this interview, Commissioner Cliff Rechtschaffen details the state’s efforts to manage the heightened risks facing California in the age of climate change.


Cliff Rechtschaffen

"The reality of climate change is transforming the PUC into a different kind of agency that is much more focused on safety and resilience than ever before." —Cliff Rechtschaffen

Given that PG&E’s bankruptcy arose from the vulnerability of our electrical grid to wildfires and climate risk, share the CPUC’s extensive efforts to improve safety in the face of climate change.

Cliff Rechtschaffen: We are working overtime on this issue and then some. Elevated wildfire risk is California’s “new abnormal,” as former Governor Brown put it, and while PG&E’s may be “the first climate-change bankruptcy,” it certainly won’t be the last. This reality is transforming the PUC into a different kind of agency that is much more focused on safety and resilience than ever before.

Together with CalFire, we have mapped the state and found that close to 45 percent of California is at elevated or extreme fire risk—that’s how extensive the problem is. In those high-risk areas, we have required enhanced safety measures, more frequent inspections and more rigorous line clearance and vegetation management. We’re also working on new requirements for infrastructure planning to minimize wildfire risks and enhance safety.

Last year, the legislature passed SB 901, which required that utilities adopt annual, detailed wildfire mitigation plans. Those plans must include things like vegetation management, hardening the grid, replacing wooden poles with steel pools, schedules for inspection and auditing their facilities, metrics to evaluate compliance, and so forth. We just finished our review of the 2019 plans.

We are also in the midst of a proceeding on de-energization, or public safety power shut-offs: this is when utilities proactively shut off power amid heavy winds and other weather conditions in order to avoid a situation where their infrastructure becomes the source of a wildfire. This is a drastic step with significant adverse impacts on the community that loses power, so the utility’s decision to exercise this discretion has to be made with great care. It also has to be done with plenty of advance notification to customers, emergency services providers, first responders, hospitals, and critical facilities.

It’s also important to pay special attention to the risks that disadvantaged and vulnerable communities face, because we know that the poorest communities—those already suffering the most from the pollution—are likely to be disproportionately impacted by climate change.

Elaborate on the CPUC’s evolving approach to utility infrastructure risk and how the agency’s regulation of utility practices might change going forward.

When I talk to public utilities commissioners from other states about the breadth and scope of what we do at the CPUC, they often find it difficult to comprehend. In other parts of the country, PUCs do not regulate the safety of utility practices. And of course, most other states don’t deal with anything close to our wildfire risks.

Traditionally, PUCs are economic regulators. Our PUC was originally constituted to function in this way as well. As a result, we have great expertise in areas like ratemaking. But since the 2010 San Bruno pipeline explosion involving PG&E, we’ve been developing new expertise in partnership with other state agencies, firefighting agencies, research and academic institutions, the tech industry, and so forth.

One thing we’ve done is adopt new processes for utilities to evaluate their risks and determine how to spend money reducing them. Utilities spend hundreds of millions, if not billions, of dollars on preventing and dealing with a whole range of risks facing their infrastructure—anything from gunmen opening fire on an electric substation, to overhead lines going down, to excavations that could damage pipelines. But in the past, priorities and spending decisions on risk mitigation were developed by utility subject matter experts without much transparency to the PUC or stakeholders. Now, we require utilities to systematically, objectively, and quantitively evaluate the risks, and prioritize where to spend money to get the biggest bang for their buck. That’s a big deal and a very positive improvement.

This process will take time; we’re not going to turn ourselves into a safety agency overnight. But we’re working very hard on it because of the obvious and compelling need.

Speak to how the CPUC is approaching climate adaptation.

The PUC is increasingly focused on adaptation because we know that climate change is already impacting our state. If we know that areas where utilities have assets are soon going to be overwhelmed by sea-level rise or wildfires, or that extreme heat is going to cause efficiency losses, then we have to be thoughtful about how we plan our infrastructure. We don’t want to approve projects and the commensurate costs today that will be compromised in 30 years because of the changing climate.

We are in the midst of an important proceeding on adaptation. Our expectation is for utilities to engage in “vulnerability assessments” that evaluate which of their assets are most vulnerable to climate change and come up with plans to mitigate those risks going forward. This includes analyzing the impacts that climate change will have on disadvantaged and vulnerable communities.

California has required all state agencies to engage in adaptation planning, and preparing utility infrastructure to adapt is an important part of that effort. Fortunately, California has just completed our Fourth Climate Assessment that includes analysis of “downscaled” climate risks in regions throughout the state. Data from the Fourth Assessment and other research about climate impacts in California will enable utilities to use the best climate science available to inform their planning and infrastructure investments.

Share what was learned at the CPUC’s recent Wildfire Technology Innovation Summit.

That was a really interesting summit, and the first of its kind for us. Technology is one of our greatest potential assets—and so far, one of the most underutilized—in dealing with wildfire risks.

In March, the PUC worked with CalFire and leaders in the tech industry to convene what we hope was only the first of many Wildfire Technology Innovation Summits. Several hundred people from the US, Canada, and Australia—scientists and academics, utilities, firefighters, public safety experts, ratepayer and consumer advocates, and more—came together to share best practices and what the future may hold. We all came away very excited about what’s possible and how we can improve.

California has hundreds of thousands of miles of transmission and distribution lines throughout the state. It would be extraordinarily difficult and labor-intensive to have inspectors monitoring all those lines all the time. If we could instead employ sophisticated technology to be our eyes and ears, we would be much further along in dealing with wildfire risk. Likewise, there are technologies that could detect faults in electric lines even when the line appears to be in good condition from a surface inspection. This could prevent a lot of accidents.

Our energy utilities have been adopting new technologies for wildfire risk mitigation and enhanced grid resiliency. These efforts have been led by San Diego Gas & Electric. For example, they’ve installed weather stations with high-resolution weather monitors that locate smoke and fire and display weather conditions in real time, so that the utility doesn’t need to engage a fire crew just to assess the severity of the issue.

The utilities are also employing supercomputers and data analytics to come up with more detailed metrics for fire risk, and using machine learning to create highly sophisticated models to predict how quickly fires will spread. They are looking at the moisture content of grass and trees, temperatures, wind, historic trends, and more. All of these tools will help us target the deployment of fire crews and be much more surgical in power supply shut-offs, so that a minimal number of people will be impacted.

What is role of the recently created Catastrophic Wildfire Cost and Recovery Commission in the Governor’s Office of Planning and Research (OPR), chaired by former Public Utilities Commissioner Carla Peterman? How is it linked to the growing domain of the CPUC in utility risk management?

That Commission looks at broader, more systemic issues relating to how the costs of increased wildfires should be socialized: How can we keep people and businesses whole, keep insurance companies solvent, and avoid placing undue stress on any individual utility when damages occur? The Commission has been evaluating what’s been done in other areas, such as Florida and Louisiana, where repeated disasters have resulted in damages that swamped coverage limits and incurred billions of dollars in costs.

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This work complements the PUC’s work, but our role is more narrowly focused on utilities’ behavior and how to mitigate the risks their infrastructure poses to wildfire safety. 

The CPUC has recently approved a de-energization, or public safety power shut-off, strategy to prevent future catastrophic wildfires like those experienced in California in the last two years. What drove that direction to utilities?

We’re balancing very difficult trade-offs. Utility-caused fires are only about 10 percent of all wildfires in California, but they’re often some of the worst ones with the most extensive damage. When a live power line comes into contact with vegetation during high wind or storm events, it can cause a fire that can rapidly spread and cause great damage. In bad weather conditions, it may make sense for utilities to shut off power to certain lines so that they no longer pose an ignition risk. We of course want to avoid a conflagration like the Thomas Fire, the Woolsey Fire, the Tubbs Fire, or the Camp Fire—all of which devastated parts of California in 2017 and 2018.

However, shutting off power also has very significant adverse impacts on communities. We depend on electricity for so many things; everything is impacted when you turn it off. Water pumping systems, communication systems, refrigeration, streetlights—it all turns off. Not to mention that hundreds of thousands of people use medical equipment, including oxygen and breathing equipment, that relies on electricity. And in a storm, people may be shut in their homes and unable to get to another power supply. So de-energization has to be done very surgically and only as a last resort.

There’s no perfect way to do this. But the PUC is setting up requirements that utilities must follow to ensure that, when it must be done, it’s done very carefully with advance notice so that people can prepare as much as possible. We’ve directed the utilities to work with communities to prepare backup resource centers, and to do public awareness campaigns over the summer so that people can start to get their heads around the possibility well in advance.

Speak to your personal role in the electrification of transportation—in former Governor Brown’s office, as a PUC commissioner, and as a board member of Veloz.

Transportation electrification is a central issue in making further progress toward tackling climate change in California and beyond, and I am very excited to be in a leadership role working on it.

California has done well in decarbonizing other areas of our economy, particularly our power sector. But we have made far less progress, and certainly not enough progress, in our transportation sector, which is our biggest source of greenhouse gas emissions, along with criteria air pollutants and toxic air pollutants.

I recently joined the policy board of Veloz, a non-profit organization that brings together stakeholders from different sectors to work on this issue, particularly on increasing awareness of zero-emission vehicles. California leads the nation in zero-emission vehicles, but there are still a lot of people who don’t know what a great option they are.

When I worked for Governor Brown as a policy advisor, I helped draft our 2012 executive order on zero-emission vehicles—at that time, a goal of 1.5 million electric vehicles on the road in California by 2025. People said, “That’s too ambitious. It’s a moonshot; we won’t get there.” Well, we’re already halfway there, and there is no question we will meet and exceed that target. So, while our new goal of 5 million by 2030 is also ambitious, I have no doubt that it’s achievable.

The PUC is working on a variety of programs to spur the developments we need. We have funded close to $2 billion in electric vehicle charging infrastructure. We’re looking at setting rates to promote charging vehicles at certain times to support our grid, and also at policies and pilots to advance vehicle-to-grid integration. 

TPR recently interviewed SoCalGas CEO Bret Lane. In your opinion, what is the role of hydrogen and renewable natural gas in California’s future transportation energy mix?

The PUC doesn’t play the central role in hydrogen policy because hydrogen isn’t a fuel that we regulate (as opposed to electricity). But, consistent with state policy and the Air Resources Board’s scoping plan for the entire economy, I do believe that hydrogen will contribute substantially to decarbonizing our transportation sector—in particular when it comes to medium- and heavy-duty vehicles, which are much harder to electrify.

Of course, we need to make sure the hydrogen we use comes from renewable energy sources. We’re hoping to find a happy marriage between hydrogen production and our excess solar energy during the middle of the day. 

The utility sector is going through a transformation, led by the growth of distributed energy, community choice aggregation programs (CCAs), climate change, and more. What do you see on the horizon for California utilities in the next five years?

We’re still in the process of figuring that out. Many of the changes we’re seeing in the utility sector are for the good and will help promote a clean energy economy. But change is also disruptive, and we have to thoughtfully address the concerns that it raises.

For example, we have seen sharp growth in the number of CCAs throughout the state. Many local governments have opted for CCAs as a way to achieve greater autonomy and promote stronger renewables policies that reflect what their constituents want. Increased customer choice is good news, but we have to ensure that the system as a whole remains reliable for all customers, regardless of who their electricity provider is.

We’ve also seen a dramatic growth in distributed energy, rooftop solar, new energy efficiency tools, new demand response techniques, batteries, and batteries plus storage. All these resources have a great deal of promise for making our grid smarter and more efficient. They can give customers a better way to manage their load, and help us shift energy use away from peak periods, avoiding the need to build more power plants just to deal with those peak periods of energy use.

How the utilities will emerge from all this is still to be determined. Some, like SDG&E, would like to get out of the business of electricity generation altogether, and instead make the management of transmission and distribution lines their core business. That model would make them a distribution platform for a variety of different energy providers that customers could choose from.

But other utilities may not want to go in that direction. Southern California Edison, for example, sees an opportunity for the dramatic electrification in transportation and buildings, and they want to continue to be a provider and procurer of that energy. The Southern California Gas Company sees a decarbonized world in which they can continue to play a major role by producing renewable gas and hydrogen.

The legislature, the governor, and the market will all have a big say in where the utilities end up. The state has imposed a lot of responsibility on the utilities for various policy initiatives, and we’ll have to see whether that continues to make sense, or whether we should disperse those responsibilities among other actors. Market forces also will have a major role, as more and more customers express a preference for choice. For the PUC’s part, we want to create a fair and consistent set of rules so that customers can make those choices well informed and with proper consumer protections. At the same time, we want to make sure that the grid remains safe and reliable and that costs remain reasonable.

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© 2019 The Planning Report | David Abel, Publisher, ABL, Inc.