CPUC Public Agenda 3285 Thursday, December 1, 2011, 9:00 a.m. 505 Van Ness Ave, San Francisco Commissioners: Michael R. Peevey Timothy Alan Simon Michel Peter Florio Catherine J.K. Sandoval Mark J. Ferron

Public Comment Per Resolution ALJ-252, any member of the public who wishes to address the CPUC about matters before the Commission must either sign up at the Commission's webpage section "Public Comment Sign-Up" or with the Public Advisor before the meeting begins. Public speakers must visit the Public Advisors table before the start of the meeting on the day of the Commission Meeting to ask our staff to mark their presence. Once called, each speaker has up to 3 minutes at the discretion of the Commission President, depending on the number of speakers. A sign will be posted when 1 minute remains. A bell will ring when time has expired. Those who sign up after 9:00 a.m. will only have 1 minute. The following items are NOT subject to Public Comment:  Item: 29, 31 & 44  All items on the Closed Session Agenda

Public Comment Per Resolution ALJ-252, any member of the public who wishes to address the CPUC about matters before the Commission must either sign up at the Commission's webpage section "Public Comment Sign-Up" or with the Public Advisor before the meeting begins. Public speakers must visit the Public Advisors table before the start of the meeting on the day of the Commission Meeting to ask our staff to mark their presence. Once called, each speaker has up to 2 minutes to address the Commission. A sign will be posted when 1 minute remains. A bell will ring when time has expired. Those who sign up after 9:00 a.m. will only have 1 minute. The following items are NOT subject to Public Comment:  Item: 29, 31 & 44  All items on the Closed Session Agenda

Public Comment Per Resolution ALJ-252, any member of the public who wishes to address the CPUC about matters before the Commission must either sign up at the Commission's webpage section "Public Comment Sign-Up" or with the Public Advisor before the meeting begins. Public speakers must visit the Public Advisors table before the start of the meeting on the day of the Commission Meeting to ask our staff to mark their presence. Once called, each speaker has up to 1 minute to address the Commission. A bell will ring when time has expired. The following items are NOT subject to Public Comment:  Item: 29, 31 & 44  All items on the Closed Session Agenda

Agenda Changes Items shown on the Consent Agenda will be taken up and voted on as a group in one of the first items of business of each CPUC meeting. Items on Today’s Consent Agenda are: 1, 3, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 33, 34, 35, 36, 37 & 58 Any Commissioner, with consent of the other Commissioners, may request an item from the Regular Agenda be moved to the Consent Agenda prior to the meeting. Items: 39, 42, 45 & 49 from the Regular Agenda have been added to the Consent Agenda. Any Commissioner may request an item be removed from the Consent Agenda for discussion on the Regular Agenda prior to the meeting. Item: None have been moved to the Regular Agenda. Item: 5 has been withdrawn. The following items have been held to future Commission Meetings: Held to 12/15/11: 2, 20, 32, 40, 41 & 50 Held to 1/12/11: 51, 46 & 46a

Regular Agenda Each item on the Regular Agenda (and its alternate if any) will be introduced by the assigned Commissioner or CPUC staff and discussed before it is moved for a vote. For each agenda item, a summary of the proposed action is included on the agenda; the CPUC’s decision may, however, differ from that proposed. The complete text of every Proposed Decision or Draft Resolution is available for download on the CPUC’s website: Late changes to agenda items are available on the Escutia Table.

Regular Agenda – Energy Orders Item #38 [10475] Regulations to Reduce Fire Hazards with Overhead Power Lines and Communication Facilities R Order Instituting Rulemaking to Revise and Clarify Commission Regulations Relating to the Safety of Electric Utility and Communications Infrastructure Provider Facilities. Quasi-Legislative Comr. Simon/ ALJ Kenney PROPOSED OUTCOME: Adopts regulations to reduce the fire hazards associated with overhead power lines and aerial communication facilities located in close proximity to power lines. Establishes a new Phase 3 of this proceeding to (1) revise Section IV of General Order 95 to reflect modern practices and to incorporate a new High Fire-Threat District; (2) develop a plan for the Consumer Protection and Safety Division to collect data on power-line fires and formulate fire-prevention measures; and (3) develop maps of areas where power-line fires are more likely to occur. Identifies the regulatory mechanisms that cost-of-service utilities should use to seek recovery of the costs they incur to comply with the adopted regulations. Denies a request by certain parties to open a new rulemaking proceeding to consider if fire risk should be added to the list of reasons to permit undergrounding of power-line facilities pursuant to electric Tariff Rule 20. ESTIMATED COST: The adopted regulations will likely increase costs, but the amount is unknown. The cost of the new regulations is more than offset by the public-safety benefits.

Regular Agenda – Energy Orders Item #43 [10795] Procurement Quantity Requirements for Renewables Portfolio Standard R Order Instituting Rulemaking to Continue Implementation and Administration of California Renewables Portfolio Standard Program. Ratesetting Comr. Ferron/ ALJ Simon PROPOSED OUTCOME: Sets renewables portfolio standard procurement quantity requirements for all retail sellers for compliance periods ; ; and ESTIMATED COST: Unknown.

Regular Agenda – Energy Orders Item #44 [10822] Pacific Gas and Electric Company's $38 Million Penalty I Order Instituting Investigation on the Commission’s Own Motion into the Operations and Practices of Pacific Gas and Electric Company, regarding the Gas Explosion and Fire on December 24, 2008 in Rancho Cordova, California. Adjudicatory Comr. Simon/ ALJ Wong PROPOSED OUTCOME: Affirms $38 million penalty against Pacific Gas and Electric Company (PG&E) concerning the December 24, 2008 gas explosion in Rancho Cordova, California and adopts stipulations. Closes the proceeding. ESTIMATED COST: PG&E will not seek to recover from customers in rates any portion of the penalty and other costs associated with this decision.

Regular Agenda – Communication Resolutions and Written Reports Item #46 [10677] Suspends the Communications Division’s Written Disposition of TelePacific’s Advice Letter 314 Res T PROPOSED OUTCOME: Directs parties to the proposed transaction to file an application seeking Commission approval of the processed acquisition of assets. ESTIMATED COST: None.

Regular Agenda – Communication Resolutions and Reports Item #46a [10804] ALTERNATE TO ITEM Res T PROPOSED OUTCOME: This alternate resolution denies the protest of Straishot RC LLC and approves U.S. TelePacific Advice Letter 314 granting authority for the acquisition of the assets, customer base and operating authority of IXCH, Inc., by TelePacific's subsidiary, TelePacific Managed Services. ESTIMATED COST: None.

Regular Agenda – Communication Resolutions and Reports Item #47 [10810] California Advanced Services Fund Rural and Urban Broadband Consortia Grants Res T PROPOSED OUTCOME: Approves $1.349 million to fund the cost of broadband deployment activities other than the capital cost of facilities in 2012 by seven consortia grantees. ESTIMATED COST: $1.349 million.

Regular Agenda – Communication Resolutions and Reports Item #47a [10811] ALTERNATE TO ITEM Res T PROPOSED OUTCOME: Approves $1.670 million to fund the cost of broadband deployment activities other than the capital cost of facilities in 2012 by seven consortia grantees. ESTIMATED COST: $1.670 million.

Regular Agenda – Water/Sewer Resolutions and Reports Item #48 [10613] San Jose Water Company's Surcharges to Recover $5,740,078, or an Increase of 2.62% in Annual Metered Revenue, for Lost Revenues due to Mandatory Conservation - OPTION A Res W-4885, Supplemental Advice Letter 415-A filed on July 8, Related matters PROPOSED OUTCOME: Order rejecting without prejudice San Jose Water Company's (SJWC) request to amortize its mandatory conservation revenue adjustment memorandum account and referring this issue to be reviewed and resolved in SJWC's next General Rate Case application. ESTIMATED COST: None.

Regular Agenda – Water/Sewer Resolutions and Reports Item #48a [10801] OPTION B Res W-4885, Supplemental Advice Letter 415-A filed on July 8, Related matters PROPOSED OUTCOME: Permits the Utility to transfer $5,740,078 from its Mandatory Conservation Revenue Adjustment Memorandum Account to a balancing account for recovery. Permits the Utility to earn interest on the balance in this balancing account at the 90-day commercial paper rate. Permits the Utility to implement a surcharge of $ per 100 cubic feet added to the quantity rates over 12 months to recover in rates the $5,740,078 in lost revenues. Permits the Utility to file a Tier 1 Advice Letter to make effective the tariff schedules attached to this Resolution five days after approval of this Resolution. Permits the Utility to cancel the corresponding tariffs for the presently effective rate schedules listed in Ordering Paragraph 3. ESTIMATED COST: $5,740,078 or 2.62%.

Commissioners’ Reports

Management Reports

Regular Agenda – Management Reports and Resolutions Item #52 [10816] Report and Discussion by Consumer Protection and Safety Division on Recent Safety Program Activities

19 Risk Assessment Julie Halligan Deputy Director of CPSD California Public Utilities Commission December 1, 2011

Presentation Overview Formation of the Risk Assessment Unit Risk Assessment Unit Staff Risk Assessment General Methodology First Tasks Approach to Identifying Hazards Questions or Comments?

Formation of the Risk Assessment Unit In the area of utility safety, the Commission historically has focused its resources on inspections and accident investigations. These programs mostly look back at past events or conditions. In light of the San Bruno tragedy, we identified a clear need to improve our skills necessary for risk identification, analysis and management. This concept was supported by the Legislature, and also in the final report of the Independent Review Panel which recommended that “the CPUC should significantly upgrade its expertise in the analytical skills necessary for state-of-the-art quality risk management work”.

The Risk Assessment Unit Staff Last Spring, we requested and received approval for an additional nine positions for our utility safety team. Of these new positions, four were specifically identified to be members of a newly established Risk Assessment Unit. We completed staffing appointments to the Risk team in September. The first four members of the team are all Utilities Engineer Specialists. They are Joyce Steingass, Claudia Lam, Steve Haine and Chuck Magee.

Risk Assessment General Methodology 1.Identify hazards to public safety. 2.Assess the risks associated with the hazards by examining the frequency and consequence of the hazard. 3.Using safety as the top priority, examine and decide on the most cost-effective method to mitigate the hazards and prevent accidents.

Risk Assessment Unit First Tasks The first priority for the RA Unit will be to assess hazards to the gas system. Assessment of other types of utility hazards will follow. The Risk Assessment Unit is already at work on the following tasks: 1.Establishing contacts and working relationships with federal and state agencies, gas regulatory agencies, utilities, divisions and branches within the CPUC and others. 2.Identifying hazards to the gas system. 3.Training

Approach to Identifying Hazards Conducting surveys and interviews of regulatory agency representatives from other states, experts in gas safety, critics of gas safety, academics, gas utility employees, utility worker unions, USRB, first responders and others. Compiling hazards identified by the NTSB accident report, the Independent Panel Report on the San Bruno explosion, the Pipeline and Hazardous Materials Safety Administration (PHMSA) database, the USRB database, and various inspection, accident and risk reports worldwide as they are identified. Inspections of gas transmission and distribution infrastructure.

Questions or Comments?

Regular Agenda – Management Reports and Resolutions Item #52 [10816] Report and Discussion by Consumer Protection and Safety Division on Recent Safety Program Activities

Management Reports

The CPUC Thanks You For Attending Today’s Meeting The Public Meeting is adjourned. The next Public Meeting will be: December 15, 2011, at 9:00 a.m. in San Francisco, CA