CPUC ISSUES $51.5 MILLION IN PENALTIES OVER MALIBU CANYON FIRE

(The following is a reformatted version of a press release
issued by The California Public Utilities Commission and
received via electronic mail. The release was confirmed by the
sender.) 
Media Contact: Terrie Prosper, 415.703.1366, news@cpuc.ca.gov 
CPUC ENHANCES SAFETY, ISSUES $51.5 MILLION IN PENALTIES AND
REMEDIATION AGAINST SCE AND NEXTG FOR MALIBU CANYON FIRE 
SAN FRANCISCO, Sept. 19, 2013 -- The California Public Utilities
Commission (CPUC) today approved settlement agreements totaling
$51.5 million with Southern California Edison (SCE) and NextG
Networks to resolve all issues regarding the October 2007 Malibu
Canyon Fire and to significantly enhance public safety. 
The Malibu Canyon Fire occurred when three utility poles fell to
the ground during a Santa Ana windstorm in October 2007. The
settlement agreements approved today not only penalize SCE and
NextG for wrongdoing as a deterrent to future violations, but
also increase public safety by requiring the inspection of
61,453 poles for compliance with CPUC safety rules, repair or
replacement of poles found in violation, and more stringent
safety requirements for poles in Malibu. 
Under the $37 million settlement approved between SCE and the
CPUC’s Safety and Enforcement Division (SED), SCE admits that a
pole was overloaded in violation of CPUC rules due to the
facilities that were attached to the pole by another utility.
SCE also admits that it violated Public Utilities Code when it
failed to take prompt action to prevent the pole overloading.
SCE further admits that it violated Rule 1.1 of the CPUC’s Rules
of Practice and Procedure when SCE withheld pertinent
information from the CPUC. SCE will pay, in shareholder funds, a
fine of $20 million to California’s General Fund. SCE will also
pay $17 million in shareholder funds to assess 1,453 utility
poles in the Malibu area to be certain they meet the CPUC’s
regulations. Substandard poles found by the assessment will be
remediated.  The settlement requires that all line elements in
Malibu Canyon have a wind-load safety factor of at least 4, the
most stringent requirement under CPUC regulations, which will
help mitigate any repeat of the damage caused by the 2007 fire
to Malibu Canyon and the surrounding communities. 
The CPUC also approved a settlement agreement between SED and
NextG Networks under which NextG admits that a pole was
overloaded in violation of CPUC rules. NextG will pay $14.5
million, of which $8.5 million is a fine to California’s General
Fund. The remaining $6 million will be used to conduct a safety
audit of all of NextG’s poles and pole attachments in
California, totaling nearly 60,000 utility poles. Any money that
remains after the safety audit is complete will be paid to
California’s General Fund. Conversely, if $6 million is not
sufficient to complete the audit, NextG will provide additional
funds to finish the audit.  The $6 million provided for the
safety audit will not pay for remedial work on substandard
facilities found by the audit. The costs for remedial work will
be in addition to the $14.5 million that NextG is required to
pay under the settlement agreement. 
“These settlements not only financially penalize two companies
for wrongdoing and serve as a deterrent to future violations of
CPUC rules, but they also increase safety going forward by
requiring inspections, repairs, and strengthening safety factors
to make poles in the Malibu area better able to withstand high
winds,” said Commissioner Carla J. Peterman, the lead
Commissioner for the two proceedings. 
“CPUC approval of these settlements is an important step to
assure the future safety of utility poles should the state again
suffer from extraordinary weather conditions, not at all an
unlikely prospect,” said Commissioner Catherine J.K. Sandoval.
“The settlement provides for a safety audit to determine whether
poles and pole attachments, upon which our electric and
communications systems depend, can withstand the maximum,
reasonably foreseeable impacts of Santa Ana windstorms.
Moreover, the costs incurred for the safety steps in these two
settlements will be borne by the utilities, not ratepayers.” 
The CPUC in September 2012 approved a settlement agreement for
$12 million between SED and AT&T, Verizon, and Sprint for the
Malibu Canyon fire. 
The NextG settlement proposal voted on is available at
http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M077/K059/7
7059441.PDF. 
The SCE settlement proposal voted on is available at
http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M076/K996/7
6996747.PDF. 
For more information on the CPUC, please visit www.cpuc.ca.gov. 
(bjh) NY 
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