From RTO Insider:
Travis Kavulla, director of energy and environmental policy at the R Street Institute, a D.C. think tank, and a member of the Western Energy Imbalance Market’s Governing Body, said the applications for higher returns on equity filed by PG&E and SCE would base a quarter to a third of the companies’ future profits on predicted fire liabilities.
The utilities, especially PG&E, “have already made in essence an opening bid to say what amount of their profit is guided by wildfire-related risk,” Kavulla said. Instead, he said, profits should be connected to measurable results.
“A significant amount of this firm’s profits … should be tied explicitly to achievement of safety outcomes rather than simply being earned as a return paid on capital investments,” Kavulla said.