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California regulator to investigate utilities’ mass fire-prevention power outages

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Via Reuters Finance

(Reuters) – California regulators said on Monday they will open a formal probe of whether utilities violated any rules by cutting power to millions of residents for days as a precaution during recent periods of high winds and heightened wildfire risks.

FILE PHOTO: PG&E works on power lines to repair damage caused by the Camp Fire in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage/File Photo

The investigation was urged by safety and enforcement staff of the California Public Utilities Commission after more than 1 million homes and businesses were left without electricity on Monday, mostly from planned “public safety power shut-offs” on an unprecedented scale.

The announcement did not single out any utilities by name, but the overwhelming bulk of the shut-offs were implemented by Pacific Gas and Electric Co, a unit of PG&E Corp (PCG.N), California’s largest investor-owned utility.

PG&E filed for bankruptcy in January, citing some $30 billion in civil liability from major wildfires sparked by its equipment in 2017 and 2018, including last year’s Camp Fire which killed 85 people and incinerated most of the Northern California town of Paradise. That fire ranks as the state’s deadliest on record.

Responding to the latest windstorms over the weekend, PG&E turned off electricity to 970,000 homes and workplaces in 38 counties in northern and central California, encompassing millions of people across more than half of PG&E’s service area of 70,000 square miles.

That tally far surpassed the previous record planned outage of 730,000 customers during high winds two weeks ago.

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By Monday evening as the latest winds began to subside, PG&E crews had restored electricity to 325,000 customers, utility spokeswoman Tamar Sarkissian said. She said the company had some 6,000 technicians in the field patrolling power lines, making repairs and turning electricity back on.

Even as power was being gradually restored, PG&E said it was considering yet another round of power shut-offs due to more high winds forecast for later in the week.

The precautionary blackouts have drawn sharp criticism from the governor and state regulators as being too widespread and disruptive, as well as poorly managed and communicated to the public earlier this month.

‘HELD TO ACCOUNT’

California Governor Gavin Newsom has said PG&E is largely to blame for its own predicament, arguing that corporate greed and mismanagement kept the utility from upgrading its infrastructure while wildfire hazards have steadily worsened over the past decade.

He has vowed that under the leadership of the new Public Utilities Commission president he appointed in July, Marybel Batjer, utilities such as PG&E would be “held to account” for their lapses.

The agency’s statement on Monday said its enforcement division will ask commissioners in the next 30 days to open an investigation of the outages. The inquiry will examine utility compliance with agency regulations, “any resulting violations and potential actions to ensure utilities are held accountable,” the statement said.

Fines of up to $100,000 per violation per day and additional penalties can be assessed for violations of commission rules and regulations, agency spokesman Christopher Chow said.

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PG&E was previously assessed a record $1.6 billion penalty for the unsafe operation of one of its gas pipelines that exploded in San Bruno, California, near San Francisco, in 2010.

In addition, the commission said it would ensure that customers do not end up charged for services they failed to receive during the blackouts.

Batjer also plans to reevaluate the protocols for precautionary power shut-offs and consider how utilities can minimize future outages.

In response to the commission’s action, PG&E said, “We are constantly working to minimize the impact of these safety shut-offs while prioritizing public safety. The sole purpose of these power shut-offs is to reduce the risk of catastrophic wildfire in the communities that we serve.”

PG&E acknowledged last week that a major wildfire in Sonoma County wine country erupted near a damaged a transmission tower owned by the utility at about the time a live high-voltage line carried by that tower malfunctioned.

Reporting by Peter Henderson in San Francisco; Writing and additional reporting by Steve Gorman in Culver City, California; Editing by Sandra Maler and Cynthia Osterman


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