Safety Policy Division’s Risk Assessment and Safety Analytics (“RASA”) section is charged with the task of scrutinizing energy-utility safety-risk threat assessments along with associated proposed mitigation plans, and estimated costs and spending requests. Collectively, these utility disclosures and proposed plans are submitted as risk reports to the Commission on a four-year-cycle basis, which inform and enable applications for approval of system-wide utility operating and capital budgets. This regulatory review and public-vetting process – known as the RAMP (or Risk Assessment and Mitigation Phase) – is required for each of California’s four major investor-owned utilities.

In effect since 2014, the RAMP has proven to be a pivotal utility-safety reform backed by rigorous new rules and guidance to ensure that California’s energy utilities carefully consider and fully disclose those safety risks associated with their service and activities, and explain how utilities are equipped to detect, quantify, and contain those risks at the lowest practicable cost.

Investor-Owned Utilities Subject to RAMP Requirements

Pacific Gas & Electric (PG&E)
Southern California Edison (SCE)
San Diego Gas & Electric (SDG&E)
SoCal Gas

SDG&E and SoCal Gas, collectively the Sempra Company Utilities

Please click on any of the links above to be directed to the webpage constituting that utility’s RAMP efforts.

 

Constant RAMP Improvement with Regular Refinement of Applicable Regulations Stipulating Utility Risk-Management Requirements Makes for a Safer California at the Lowest Practicable Cost

R.13-11-006. Rulemaking R.13-11-006 (2013-2020), designated disclosure of utility safety risk factors as a precursor to and major factor informing utility spending and budgets, and prioritized establishment of a new regulatory Risk-Based Decision-Making Framework to determine appropriate rules and expectations for how enhanced utility risk management practices would lead to a safer California at a cost deemed reasonable.

D.14-12-025. Decision D.14-12-025 (2014), was the first set of new Commission Orders resulting from R.13-11-006, and codified an initial set of RAMP requirements to incorporate a Risk-Based Decision-Making Framework into the process for approving energy utility operating and capital budgets -- a major regulatory-compliance undertaking initiated upon a utility’s filing of a General Rate Case (GRC) application.

D.15-11-005. Decision D.15-11-005 (2015) was the second set of new Commission Orders resulting from R.13-11-006, and addressed additional safety and risk management issues, including several recommendations put forward by Commission consultant experts.

D.16-08-018. Decision D.16-08-018 (2016), within Application A.15-05-002, the Safety Model Assessment Proceeding (first S-MAP), established guidelines for what utility RAMP submissions should include, as well as an assessment methodology by which to review the RAMP submissions. Requirements included new safety model and risk assessment standards. Improved utility risk frameworks that are quantitative, probabilistic, transparent, and more consistent from one utility to another were issues identified as requiring further analysis.

D.18-12-014. Decision D.18-12-014 (2018), within Application A.15-05-002, further brought to bear the Risk-Based Decision-Making Framework vision articulated in R.13-11-006, and identified a new RAMP lexicon and established ten major components to be included within utility risk compliance filings.

D.19-04-020. Decision D.19-04-020, (2019), within Application A.15-05-002, adopted 26 safety performance metrics and further refined utility risk and safety assessment and reporting requirements.

D.20-01-002. Decision D.20-01-002 (2020), was the third and final set of Commission Orders resulting from Rulemaking R.13-11-006 (now closed), which set forth a four-year cycle for Commission review of utility RAMP risk reports. The Decision also established that a utility RAMP risk report shall be filed as an application prior to an energy utility submitting a request for approval of any GRC application to fund its proposed system-wide utility operating and capital expenses.

R.20-07-013. Rulemaking R.20-07-013 (2020 - ), now in progress, this proceeding (second S-MAP) has the broad objective to improve energy utility prioritization of safety consistent with P.U. Code Sec. 451. This multi-phase, multi-track rulemaking is addressing, among other things, the identification of critical lessons learned from the risk assessment and risk modeling regulatory efforts completed thus far; benefit of new rules for utility safety reporting and performance metrics; potential for advancing the Commission’s GRC, Climate, and Wildfire safety goals, and the appropriateness of revised risk model weightings, tolerance, and loss value assignments.

 

More About the RAMP Process

The RAMP application review process is hands-on in that it is the cyclical vetting of each utility’s risk report – disclosing identified principle operational risks and associated mitigation costs – by Commission staff and the energy safety stakeholder community to better illuminate and enable Commission authorization of proposed utility spending requests. Such RAMP review generally would be more micro level as it consists of identifying areas where a particular utility may not have met full expectations, for example, in how estimated costs were calculated or how risk reduction would be delivered. In other instances, perceived deficiencies might have to do with a utility running afoul of procedural or rule requirements.

Additionally, utilities have some latitude to assemble a roster of their identified RAMP priority risks with associated ranking and threat quantification. For certain risks which may be new enough to not yet be well-established industry legacy problems, a particular utility’s chosen approach to characterizing and addressing a particular risk may be subject to scrutiny, debate, and pushback. For example, the risks surrounding cyber security or climate change are ones that touch on several utility lines of business including communication channels, control systems, and various infrastructure and their safe and reliable operating parameters. In response, a utility may choose to treat such a risk not as a standard primary risk, but as one that is crosscutting – that is to say, one that exists more as a risk accelerator for other identified utility risks such as wildfire or hydro-electric dam failure.

 

Additional Risk-Associated Regulatory Processes and Mechanisms

While the RAMP review track is in constant motion, rotating among California’s four large investor-owned utilities, a parallel rulemaking track is underway at the Commission to continually refine and improve the RAMP and its associated utility mandates. Such is the macro-level calibration of the Commission’s risk management expectations that convey regulatory clarity and address existing gaps and ambiguity via new policies to allow for better future RAMP applications and utility safety performance.

Staffed by RASA, this macro-level review and refinement process of risk-associated regulatory guidance is referred to generally as the Safety Model Assessment Proceeding (S-MAP). The S-MAP is the rulemaking engine that informs and refines the RAMP effort, continuously updating utility risk-related requirements and providing interpretations to support California utilities’ capacity building to respond to new and growing risks and make use of the latest risk-modeling science. It is in the pursuit of making California safer via transparently airing issues of concern and pooling ideas from a community of stakeholder experts that S-MAP works to inform the RAMP process.

The third pillar of the Commission’s energy-utility risk-management triad is ongoing and robust Compliance Reporting by jurisdictional utilities joined by Commission staff review and feedback. Safety Performance Metrics Reports and associated Commission staff review summaries are compiled annually and address an initial 26 safety performance metrics, covering risk factors which include gas pipelines and storage facilities; electrical overhead wires; and motor-vehicle, aviation, and utility employee safety practices.

 

Enhanced Energy Utility Accountability via Enhanced Risk Disclosure

The RAMP’s origins lie within Rulemaking R.13-11-006 (2013-2020), which served to promote enhanced energy-utility accountability by establishing a Risk-Based Decision-Making Framework (RDF) whereby utilities must first identify, quantify, and control public safety risks associated with their assets and activities before the Commission will consider approval of proposed utility spending budgets.

The Commission’s RDF regulatory-oversight rubric serves as a comprehensive utility-risk dashboard from which to carry out its core duty of ensuring California is kept safe from all hazards associated with energy utility infrastructure, a job whose complexity grows year by year as climate change impacts disrupt the traditional calculus of weather trends and forecasts that have helped to explain natural events and set expectations for the State’s seasonality conditions for the past 100 or more years.

The Commission’s risk management methodology serves as a template for other U.S. states seeking to pre-condition utility rates and spending on first having received tangible evidence of a well-articulated utility plan that demonstrates how capital investments and operating costs will effectively reduce those safety risks that come with a utility delivering its core service.

 

Risk Assessment Mitigation Phase