Reasonableness of Vegetation Management Expenditures for Wildfire Risk Reduction

Synapse assisted The Utility Reform Network in a litigated proceeding to address the reasonableness of Pacific Gas and Electric's (PG&E's) 2021 cost overruns related to the utility's Enhanced Vegetation Management (EVM) program. Synapse found EVM cost overruns were not reasonable and should be disallowed, for several reasons:

• PG&E did not demonstrate its overspending on EVM resulted in tangible benefits
  to ratepayers, namely reduction in wildfire risk;
• PG&E’s EVM overspending lacked prudent oversight and fiscal responsibility;
• PG&E did not incorporate efficacy and cost-effectiveness into its decision-making;
• PG&E removed trees that were marked for pruning which is wasteful, not risk
  based, and not fiscally prudent;
• PG&E’s risk ranking methodology allows for a significant deviation from highest to lowest circuit segment risk prioritization and resulted in work on relatively low-risk miles.