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CPUC Issues Financial Stress Test Proposal Related to Utility Wildfires

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The California Public Utilities Commission (CPUC) today issued a proposal by an Administrative Law Judge that would adopt a methodology for conducting a financial "Stress Test" per Senate Bill 901.

The methodology considers a utility's financial status and determines the maximum amount the company can pay for 2017 catastrophic wildfire costs without harming ratepayers or materially impacting the company's ability to provide adequate and safe service, as required by law. 

A utility that has filed for relief under chapter 11 of the Bankruptcy Code may not access the Stress Test to recover costs in an application under section 451.2(b), because the CPUC cannot determine the corporation's  "financial status," which includes, among other considerations, its capital structure, liquidity needs, and liabilities, as well as its capacity to raise additional debt, cash or resources that are reasonably available to the utility, as required by section 451.2(b).

The first opportunity that the proposal can appear on a CPUC Voting Meeting agenda for a vote by the Commissioners is June 27, 2019.

The proposal is available at http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M294/K815/294815603.PDF.

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