CCPUC Annual Meeting October 24, 2011, Monterey, CA Infrastructure Safety: Challenges in the Face of Catastrophe CIP Pe

1. CCPUC Annual MeetingOctober 24, 2011, Monterey, CAInfrastructure Safety: Challenges in the Face of CatastropheCIP Perspective

2. 2007 California Firestorm – AWatershed Event • 16 Major Fires, over 500,000 acres burned, 3,600 structures lost, 17 lives lost • Five of fires allegedly caused by power lines • Two allegedly “associated” with CIP facilities on joint use poles with electric lines • CPUC Response: • Enforcement OIIs: I.08-11-007 (Guejito); I.08-11-006 (Witch /Rice); I.09-01-018 (Malibu) • Fire Safety OIR, R.08-11-005 (Phase 1, 2 and 3)

3. Significant Changes in CIP Practices & CPUC Requirements Have Followed • Changes voluntarily undertaken and agreed to by CIP in OII settlement • Additional CIP inspections; maintenance & corrective action; coordination; documentation & record keeping • New CPUC rules adopted in D.09-08-029, Phase 1 decision in Fire Safety OIR • Additional inspections; maintenance & corrective action; pole loading; vegetation management; documentation & record keeping requirements • Additional CPUC requirements under consideration in Phase 2 of Fire Safety OIR

4. Key Questions re Changes in CPUC Requirements • Will these changes actually reduce fire risks associated with CIP facilities on joint use poles with electric lines? • If so, by which measures & to what extent? • What will the cost be to CIPs and the public? • Are there other measures that could do so at lower cost & in a more effective manner? • Will the costs be worth the benefit in terms of the actual incremental reduction in fire risks?

5. Case Study -CIP Inspection Requirements • New CIP inspection requirements have been driven largely by perceptions and assumptions re the 2007 Fires, inc. Guejito • CPSD’s Investigation Report re the Guejito alleged: • Fire was caused by broken CIP lashing wire contacting overhead kv conductor in high winds causing arcing, igniting fire • CIP lashing wire was broken prior to ignition of the fire • CIP failed to adequately inspect its facilities • CIP failed to adequately maintain its facilities • These allegations have been hotly disputed • The CPUC OII was settled with no findings re root cause

6. CIP Inspection Requirements are Changing

7. Will More Frequent & Different CIP Inspections Reduce Fire Risks Associated with CIP Facilities on Joint Use Poles? • What percentage of wildfires do powerlines cause? • What percentage of such fires are caused in whole or part by CIP facilities on joint use poles? • If the percentage is small, do CIP facilities on joint use poles nevertheless cause or contribute to particularly large & devastating fires? • If so, what makes them so destructive? • Will new CPUC CIP inspection requirements really reduce these risks?

8. California Has a Long History of Large, Destructive Fire Events • A small percentage of wildfires are caused by powerlines, however • 2%-3% of California wildfires are caused by powerlines • A very small percentage of this small percentage have been “associated” with CIPs on joint use poles • Few anecdotal incidents, but so little real data that no percentage can be calculated • The percentage where CIP facilities established as the “root cause” appears to be 0%

9. Wildfires By Cause 2010, 2009, 5-Yr Avg.

10. Haven’t Some of the Largest Most Devastating Fire Events in California Been Caused by Utility Facilities on Joint Use Poles? • Electric powerlines have been causally associated with several of the large recent fires in California • But none of the Top 20 Largest Wildfires in California have been attributed to CIP facilities on joint use poles

11. 20 Largest Wildfires in California

12. What do Fire Experts Say About Risks re CIP Facilities on Joint Use Poles • Exponent Failure Analysis Associates Study (2009): • Powerlines account for @ 2% -3% of wildland fires in Calif. • CIPs on joint use poles a much smaller percentage • No record of fires caused by CIP facilities on joint use poles in CalFire and NFIRS databases. • No record of fires caused by CIPs on joint use poles found in technical review of decades of scientific studies in US and abroad • “Hazards Analysis” conducted by Exponent identified one potential low risk event associated with CIPs on joint use poles • Conclusion – Risk associated with CIP facilities on joint use poles is “negligible

13. Does the Guejito Incident Prove that Additional Regulations Are Required? • The events may not have been as CPUC assumes: • The root cause remains in dispute • CalFire’s investigation was not complete at the time its Guejito Fire Report was prepared • CalFire reached no definitive conclusion regarding the cause of the contact or arcing between the powerline and CIP cable • CalFire’s Investigator testified that the Report could not be relied upon in testimony regarding cause • Exponent reviewed CalFire’s Report and concluded it “does not provide a basis to conclude that the CIP facility was the cause of this fire.” • There is no factual basis for drawing any definitive conclusion regarding the root cause of this fire

14. Can Appropriate New Inspection Rules Be Adopted Without Knowing the Root Cause? • CPUC has previously acknowledged the importance of determining the root cause of fire events: “If we were to adopt regulations without knowing exactly how overhead electric lines contributed to the ignition of the October 2007 wildfires, there is real possibility that the adopted regulations would not address the root causes of the fires, thereby leaving the public at risk.” D.08-05-030, at 8. • Has the CPUC made this very mistake in imposing new inspection requirements on CIPs?

15. What Costs May Be Incurred to Implement Additional New CIP Inspection Requirements • Incremental costs for additional CIP inspections are competitively sensitive and in dispute • CPSD claims should be no significant cost since GO 95, Rule 31.2 has long required “frequent & thorough” inspections • AT&T estimates CPSD proposal in Phase 2 of OIR will cost it at least $18 million/year additional • One Small LECs estimate over $1.5 million/year additional for system with 155,000 customers

16. Closing Observations • Following 2007 Fires, CIPs increased attention to and focus on specific alleged fire risks • Since Phase 1 decision in the OIR, CIPs have undertaken additional “Patrol” Inspections in High Fire Threat Areas of So. Calif. & are prepared to do so in No. Calif. • Nonconforming conditions have been found & repaired • Will further increasing CIP inspection requirements reduce fire risks beyond the level already achieved? • Will any such reduction be worth the incremental cost? • Available data and expert opinion suggests not. • Expert analysis and hard data provide a better basis for improving effectiveness & reducing costs of remedial measures than assumptions and wishful thinking

17. References • California Department of Forestry and Fire Protection, California Fire Siege 2007-an Overview. • CPUC Order Instituting Investigation 08-11-007 re Guejito Fire (2008). • CPUC Order Instituting Investigation 08-11-006 re Witch and Rice Fires (2008). • CPUC Order Instituting Investigation 09-01-018 re Malibu Fire (2008). • CPUC Order Instituting Rulemaking 08-11-005 to Revise and Clarify Commission Regulations Relating to the Safety of Electric Utility and Communications Infrastructure Providers Facilities (2008). • I.08-11-007 Settlement Agreement Between CoxCom, Inc. Cox California Telcom, LLC and Consumer Protection and Safety Division of the California Public Utilities Commission (Oct. 30, 2009). • CPUC D.10-04-047 Approving Settlement Agreements in Guejito, Witch and Rice Fire OIIs (April 22, 2010). • CPUC D.09-08-029 in Phase 1 of R.08-11-005, Fire Safety OIR (Aug. 20, 2009) (as corrected by D.09-10-004 (Oct. 1, 2009)). • R.08-11-005, Workshop Report in Phase 2 of Fire Safety OIR (Aug. 13, 2010). • I.08-11-007 Report of the Consumer Protection and Safety Division Regarding Guejito, Witch and Rice Fires (Sept. 2, 2008). General Order 95, Rules for Overhead Electric Line Construction, Prescribed by the Public Utilities Commission of the State of California.

18. References, cont. • California Department of Forestry and Fire Protection, Wildfires by Cause, 2010, 2009, 5-Yr Avg. • United States Department of Forestry and California Department of Forestry and Fire Protection, California Fire Siege 2003 – The Story. • California Department of Forestry and Fire Protection, California Department of Emergency Services, United States Department of Forestry, and United States National Park Service, 2008 June Fire Siege. • California Department of Forestry and Fire Protection, 20 Largest Wildfires in California. • Time.com, Top 10 Wildfires Worldwide. • R.08-11-005, Larry W. Anderson, et al, Exponent Failure Analysis Associates , Study to Assess Fire Risk Associated With Collocated Communications Equipment (Wired Telephone Lines and Wireless Equipment) with Utility Power Lines on Poles (March 27, 2009). • I.08-11-007, Direct Testimony of CoxCom,Inc. and Cox California Telcom, LLC (May 18, 2009). • I.08-11-007, Direct Testimony of San Diego Gas and Electric Company (May 18, 2009). • CPUC D.08-05-030, Denying SDG&E Petition for Rulemaking (May 29, 2008). • R.08-11-005, Phase 2 ,Opening Brief of the CIP Coalition (Sept. 3. 2010)