Goodin MacBride attorneys have obtained a ruling that will clear the way for cities and counties to participate more fully in proceedings at the California Public Utilities Commission.
On January 28, 2021, the California Public Utilities Commission issued an historic ruling finding that cities and counties impacted by electric utility-caused wildfires are able to demonstrate significant financial hardship, which is a critical first step toward cities and counties being reimbursed for attorney fees and costs incurred in CPUC proceedings. For decades, the CPUC had ruled that local governments’ taxing authority made it impossible to demonstrate financial hardship. The CPUC also concluded that multi-million-dollar budget deficits were insufficient to demonstrate the hardship of local governments having to pay attorney fees that totaled tens of thousands of dollars. In 2016, following the San Bruno pipeline tragedy, the Legislature allowed local governments that suffer catastrophic loss from utility infrastructure to be eligible for reimbursement for their work at the CPUC if they demonstrate utility-caused harm and significant financial hardship.
The Counties of Mendocino, Napa, Nevada, and Sonoma and the City of Santa Rosa, represented by Goodin MacBride partner Megan Somogyi, filed the first claims for compensation under the new statutory framework. The local governments proposed new guidelines for demonstrating utility-caused catastrophic loss, which the CPUC adopted. The CPUC requested the local governments provide information regarding the size of their general funds and why, in light of those funds, it would be a financial hardship to pay outside counsel without reimbursement. The local governments responded with an alternative framework that considers the nature of local government budgets and financial obligations, the scope of the physical and financial harm caused by the 2017 wildfires, and the realistic costs of participating in a CPUC proceeding. The CPUC accepted the local governments’ framework and issued a ruling finding that the local governments successfully demonstrated financial hardship.¹ That ruling reverses decades of precedent and makes local government cost reimbursement possible for the first time in the history of the intervenor compensation program.
Goodin MacBride is pleased that the CPUC has construed the statutes governing reimbursement in a way that will allow increased participation of local governments in CPUC proceedings. Local governments are crucial voices in any proceeding intended to address catastrophic failures of utility equipment and future improvements to utility operations and community relations.
¹The City of Malibu, represented by separate counsel, was also deemed eligible to claim intervenor compensation in the same ruling.