PG&E Risk Assessment Mitigation Phase (RAMP)

Background

In November 2017, PG&E submitted its Risk Assessment Management Phase (RAMP) application to the CPUC requesting approval of its risk quantification and mitigation plan, as required by the CPUC’s 2014 Decisions 14-12-025 and 16-08-018. The purpose of this proceeding is for the CPUC to determine the reasonableness of PG&E’s risk quantification methods, and subsequent proposed risk mitigation measures. The proposed mitigation measures and costs from this RAMP proceeding will inform spending in PG&E’s General Rate Case (GRC).

 
In its RAMP application, PG&E identified 22 major risks for gas and electric utility infrastructure and non-asset based risks such as employee safety. PG&E quantified the impacts of these risks over the 2017-2022 time frame through a probabilistic model, and drafted proposed mitigation measure spending for these risks. PG&E’s draft proposed mitigation spending for the 2017-2022 time frame is $6.7 billion.



ORA Position

ORA made general comments of PG&E’s RAMP risk quantification and mitigation plan methodology, as well as comments specific to each individual risk identified by PG&E. ORA acknowledges the tremendous effort PG&E has taken to develop its RAMP application, as well as PG&E’s acknowledgement and addressing of issues identified by SEMPRA’s previous RAMP report. However, ORA also acknowledges that the RAMP process still has much room for improvement. ORA’s general recommendations of PG&E’s application include:
  

  • Adjusting the calculation of the Multi-Attribute Risk Score so that it is logically consistent in how it weighs different consequence categories (e.g. Environmental, Compliance, and Financial), and includes only consequence categories that are quantifiable and have direct impacts;
  • Refining model inputs;
  • Improving the quality of PG&E’s alternate mitigation plans;
  • Adjusting mitigation spending calculations to account for interactions between mitigations and to capture the potential benefits of mitigation measures beyond the 2017-2022 time frame; and
  • Improving data clarity and transparency.

ORA did not make specific budget recommendations due to the preliminary nature of PG&E’s mitigation plans and cost forecasts. However, ORA notes that PG&E’s proposed mitigations are currently not optimized for spend efficiency across risks.

Other Resources

 PG&E Testimony and Workpapers