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By Lambert Strether of Corrente.
The PG&E blackout debacle is an enormous, sprawling story, a Homeric epic of institutional dysfunction going back decades. Homer, however, I am not, so in this brief prose poem I’ll cover developments in the last few days, take a detour into an interesting technology (mini-grids), and conclude by fitting the PG&E blackouts into our continuing “Jackpot” storyline. If you haven’t read Yves’ round-up from Thursday, please do so; the comments are also very rich, even for the NC commentariat.
PG&E Blackout Round-Up
First, as American surrealist and Burbank resident Johnny Carson used to say, “More to Come,” since the risk of wildfires is increasing. Quartz:
Such “Public Safety Power Shutoffs” aren’t going away. As transmission lines age and electricity loads increase, the risk grows that a new wildfire will break out. Power lines ignite fires after branches brush against them, or transmission poles snap, leaving live wires. Clearing trees and brush can take years, and improving infrastructure even longer. That’s compounded by extreme weather driven by climate change, which has turned America’s western forests into furnaces in waiting. Years of extreme droughts, followed by torrential rains, have left California’s wild lands full of dead and dying trees, as well as fresh growth to fuel new flames.
All can be mitigated, with money and a level of effort, but not in the next year, or even the next decade. Second, although safety is indeed a concern for PG&E, the bankruptcy proceedings in which it has enmeshed itself figure largely as well. From Wired, “California’s Power Outages Are About Wildfires—But Also Money“:
A core function of bankruptcy is to let a business continue to operate while it figures out what it owes, and to whom. PG&E has spent hundreds of millions of dollars to figure that out. “If the assumptions in your analysis turn out to be wrong, your whole strategy can blow up and be immensely costly, and delay your bankruptcy,” says Jared Ellias, an expert in bankruptcy law at UC Hastings College of the Law. That means you try to get through it fast, and with minimal chaos.
A wildfire would definitely qualify as chaos. In large part, that’s because of the damages PG&E is on the hook for. Expenses incurred during a bankruptcy take precedence over the ones from before the bankruptcy. The bills are, in the language of the law, “senior.” …
The rules get more complicated than that. This summer California passed a law called AB 1054, which set terms for how PG&E will pay out claims for previous fires and established a $20 billion insurance fund to pay future claims. That carefully negotiated, controversial plan didn’t take into account what would happen if a massive fire happened right now. “Of greater significance to PG&E is the fact that it cannot access the ‘insurance’ fund established by AB 1054 for fires this season,” writes Mike Danko, a lawyer representing fire victims, in an email. “Those funds would be available to PG&E for fires beginning in 2020, at the earliest—another reason for PG&E to protect itself at the expense of the ratepayers by turning off power, even if not really necessary.”…
PG&E then looks, let’s say, highly incentivized…. Yes, shutting off the power was about public safety. But in this case, that decision was at least semi-aligned with bankruptcy prep and shareholder value. “The company is currently controlled by the board of directors, who work for the shareholders, and the shareholders sit behind pre-bankruptcy fire victims in the pecking order,” Ellias of UC Hastings says. “So from their perspective, .”
Third, during the blackout itself (!), the bankruptcy parameters changed. From Bloomberg, “PG&E Plunges on Fear of Total Wipeout by New Bankruptcy Plan“:
PG&E Corp. shares plunged as it grappled with a court ruling that threatens to put the fate of the bankrupt power giant in the hands of outsiders and perhaps wipe out the stock.
The shares dropped as much as 32% Thursday after U.S. Bankruptcy Judge Dennis Montali stripped PG&E the previous day of exclusive control over its recovery process.
The decision escalates an already-heated battle for control of the largest utility bankruptcy in U.S. history. Montali agreed to let bondholders including Pacific Investment Management Co. and Elliott Management Corp. pitch their own restructuring plan alongside PG&E’s, so they can both come up with ways the utility could deal with an estimated $30 billion in wildfire liabilities. Some of PG&E’s bonds jumped to their highest levels in almost two years.
(Here is the bankruptcy docket; here is PG&E’s ownership.) Elliott Management is run by Paul Singer, characterized by the New Yorker as “the world’s most feared investor,” and by his own Wikipedia entry (!) as a “vulture capitalist.”) As a result, “PG&E Shares Have 75% Chance of Falling to $0, Citigroup Says” (The Street) as Citigroup analyst Praful Mehta “says the bankruptcy exit plan proposed by bondholders led by Elliott Management group has the best chance of being approved by the judge overseeing the company’s bankruptcy proceedings.”
Finally, PG&E — as one expects, at this point — has had several PR stumbles.”PG&E Holds Wine Tasting Event on Anniversary of Deadly Fires” is a headline you just don’t want to see. More seriously, from the New York Times, “‘This Did Not Go Well’: Inside PG&E’s Blackout Control Room“:
Things quickly began going wrong. PG&E’s communications and computer systems faltered, and its website went down as customers tried to find out whether they would be cut off or spared. As the company struggled to tell people what areas would be affected and when, chaos and confusion unspooled outside. Roads and businesses went dark without warning, nursing homes and other critical services scrambled to find backup power and even government agencies calling the company were put on hold for hours.
If “control” is the word we want.
New Hope for the Grid?
As readers know, I’m a meliorist. So I don’t want to write about climate issues like wildfires without presenting some hopeful development; fear is not adaptive if it only immobilizes. In the case of the state of California’s power grid — depending, I grant, on a political level of effort, in addition to “the market” — one such development is mini-grids.
To begin, PG&E’s strategy is one of triage, and it didn’t start with this blackout. From CityLab, “Why the Bay Area Is Having a Massive Power Outage“:
PG&E began the practice of preemptively shutting off its electricity grid during high-risk periods in 2018, after the utility’s fragile and poorly maintained power lines, surrounded by untrimmed trees, helped ignite the deadly Camp Fire in Paradise, California. More than 80 people were killed in the wildfire, and thousands of homes turned to ash.
Over the past year, four similar planned safety outages were held, says Mark Toney, executive director of the Utility Reform Network (TURN), a consumer advocacy group that has been critical of the PG&E shutdown. But those affected primarily Napa and Sonoma counties, and lasted only about 24 hours at a time. In 2013, San Diego Gas & Electric became the first California utility to cut power during dry conditions, according to the Wall Street Journal; its largest shut-off only affected about 20,800 people.
Now, triage is institutionalized. From Vice, “This Is Why California Will Keep Burning“:
After such a devastating stretch of fires, the idea of temporarily shutting down or “de-energizing” the grid is gaining traction. It’s the backbone of PG&E’s 2019 Wildfire Safety Plan, which calls for shutting off the power to parts of more than 30,000 miles of distribution and transmission lines during high fire-risk weather.
However, on the brighter side, it’s possible to develop new approaches in those triaged areas from which a reliable source of power has been withdrawn:
The immediate strategy for dealing with an old grid under new pressures is simply to shut down the power on especially hot, windy days. So-called “de-energizing” is arguably the best infrastructure fix the state currently has for wildfire. But it’s controversial policy, affecting thousands of customers, and potentially even endangering those who require electrical power for equipment they need to live.
Yet it’s also an unusual opportunity to build something better—a more resilient, clean, distributed electrical grid, at least on a small scale, starting in wildfire country. California’s dire climate crisis could be the impetus for what some have called a kind of mini Green New Deal, something to address a crucial need for the state at the vanguard of some of the worst, most violent effects of climate change the country has seen yet.
Most advocates of resilient microgrids aren’t suggesting the state tear out all the existing transformers and power lines, but make them redundant over time with the installation of these networked little grids. The prospect of a distributed grid is less infrastructure anarchy than making the old monopoly system more environmentally responsible, more efficient, and more resilient.
Here is one example at the municipal level from the Los Angeles Times, “California’s wildfire threat could be an opportunity for clean-energy microgrid“:
To the untrained eye, the shipping containers clustered on the outskirts of Borrego Springs don’t look like an innovative clean-energy technology that could help California cope with wildfires.
But these containers, in the remote desert of eastern San Diego County, are packed with lithium-ion batteries — and they’re part of one of the world’s most advanced microgrids. It combines solar panels, diesel generators, energy storage and something called an ultracapacitor to power Borrego Springs, even when electricity isn’t flowing through the single transmission line that connects the town to the main power grid.
Here is an example at the household level. From Quartz, “California’s wildfires may be the best thing to happen to home batteries“:
The market for residential batteries remains is small — only a few hundred megawatt-hours were installed in 2018. But it’s growing tenfold year-over-year, reports Wood Mackenzie Power & Renewables. Home solar company Sunrun has installed 5,000 of its Brightbox systems — solar panels and lithium-ion batteries with eight to 12 hours of backup power — in the US and expects sales to double this year. “We are seeing increased consumer awareness of outages due to [the California] wildfires and receiving more questions from customers about home batteries,” said spokesperson Georgia Dempsey of Sunrun.
That’s the pattern after most natural disasters, says Nick Liberati of EnergySage, an online marketplace where people buy and sell home solar panels and batteries. After massive hurricanes struck Texas and Florida in 2017, EnergySage saw installations of the systems surge on its platform. Similarly, in Puerto Rico, record numbers of the island’s residents installed home battery systems after Hurricane Maria cut power for months. The pattern appears to be holding in California.
And if these distributed solutions move from back-up power to substitute power sources, we would end up with a more resilient and less fire-prone grid:
Local solar power paired with batteries can provide reliable energy and keep electricity running for communities in need, particularly at times when a power line needs to be turned off for safety reasons. This technology might also reduce the chances of electric sparks on overhead lines, which could result in dangerous wildfires.
Electrical lines can only safely carry a certain amount of power without getting too hot. When an electric line heats up with too much energy running through it, the line can sag and drop closer to potential hazards.
If communities were to deploy more local solar and batteries, we could reduce the amount of power flowing through electricity lines, and coordinate with utilities in real time, leading to an improved scenario for utilities to carry out maintenance, reroute power in case of problems, and ensure overall safety of fire-prone communities.
Now, of course there are issues. Utilities make connections to their own grid difficult, and in some cases make it impossible to run solar without connecting to the grid. Nor are microgrids incentivized or standardized. Most are at the demonstration stage. So it doesn’t do, to get too enthusiastic:
“It doesn’t seem like we have the technical capabilities right now to do systemwide microgrids that can withstand multiday outage events,” said Elizaveta Malashenko, director of the commission’s Safety and Enforcement Division. “Even if that’s where we end up going as a state as a long-term solution, you can’t just plug in a bunch of batteries and [protect] communities in the next six months.”
But “right now’ and “in the next six months” doesn’t mean anything like “never.” (To temper my hopefulness, it’s not clear to me how residential batteries and solar would withstand flying embers, for example — the main cause of wildfires spreading. But that strikes me as an engineering problem and by no means insoluble.)
NC has taken the concept of “The Jackpot” from William Gibson (and I wish he’d finish his new book. Who does he think he is? George R.R. Martin?) Gibson’s riff is quite extended (see here for context and a complete extract) but this paragraph will be sufficient for our purposes:
[The Jackpot] was androgenic, [he, Wilf] said, and [she, Flynn] knew from Ciencia Loca and National Geographic that meant because of people. Not that they’d known what they were doing, had meant to make problems, but they’d caused it anyway. And in fact the actual climate, the weather, caused by there being too much carbon, had been the driver for a lot of other things. How that got worse and never better, and was just expected to, ongoing. Because people in the past, clueless as to how that worked, had fucked it all up, then not been able to get it together to do anything about it, even after they knew, and now it was too late.
So now, in her day, he said, they were headed into ….
So, we might look at the California wildfires (“androgenic, systemic, multiplex, seriously bad sh*t”) and the PG&E debacle (“got worse and never better”) as a sort of exemplar of what is to come if nothing is done, taking California as a sort of fractal pattern for the larger world.
First, the impotence and absurdity of the political class. Headline: “[California Governor] Newsom signs laws on drilling, fur sales, circuses and beach smoking.” Even: “California adopts nation’s broadest gun seizure laws.” These are all very well in themselves — reminiscent though they be of Bill Clinton’s famous triangulation toward school uniforms — but California has enormous problems of an entirely different scale that don’t figure in “the conversation.” Take CalPERS — please! The largest pension fund in the fifth largest economy in the world is run by crooks! And the same goes for our topic today. Here’s Governor Newsome on PG&E:
[NEWSOME:] This is not a climate change story as much as a story about greed and mismanagement over the course of decades. Neglect, a desire to advance not public safety but profits. What has occurred in the last 48 hours is unacceptable. … We’re seeing the scale and scope of something no state in the 21st century should experience.
[HILL:] I think it is excessive. PG&E clearly hasn’t made its system safe. These shutdowns are supposed to be surgical. But shutting down power to 800,000 people in 31 counties is by no means surgical. This cannot be something that can be acceptable nor long-term. .
Wrong. You are Third World. Not only is California a one-party state with a corrupt and dysfunctional political class, it has Third World levels of inequality. From the San Jose Mercury News, “Income inequality is on the rise in California. In some Bay Area counties, the disparities are extreme“:
California is the Golden State — at least for those at the top of the income scale. For everyone else, the nickname may apply more to the sun than to money.
That’s one takeaway of a recent analysis of U.S.Census Bureau data by the California Budget and Policy Center (CBPC), which found a widening gap between the state’s haves and have-nots.
The CBPC analysis found major gains for California’s richest residents, modest gains for people with median incomes, and losses for the lowest income earners when adjusted for inflation.
Median household income in California, the CBPC reported, increased by 6.4%, from $70,744 in 2006 to $75,277 in 2018, adjusting for inflation. But for the top 5% of households, income grew by 18.6%, from $426,851 in 2006 to $506,421 in 2018, while households in the bottom 20% saw their average income fall by 5.3%, from $16,441 in 2006 to $15,562 in 2018. The analysis was based on the census agency’s latest American Community Survey report.
From the Daily Beast:
By some estimates, the state’s level of inequality compares with that of such global models as the Dominican Republic, Gambia, and the Republic of the Congo.
At the same time, the Golden State now suffers the highest level of poverty in the country—23.5 percent compared to 16 percent nationally—worse than long-term hard luck cases like Mississippi. It is also now home to roughly one-third of the nation’s welfare recipients, almost three times its proportion of the nation’s population.
So, how would be you expect the oligarchy running a Third World country like California to handle a power outage? You would expect the weak to be written off (exactly as happened with New Orleans after Katrina, and Puerto Rico after Hurricane Maria). Here is where the blackouts did not happen:
Hundreds of thousands of homes across California are without power. But chunks of Bay Area remain conspicuously absent from outage maps: The seats of power for nearly every major tech giant. https://t.co/GFoLMY7OWj pic.twitter.com/Qb94PYrFoB
— WIRED (@WIRED) October 10, 2019
And here’s what happened where the blackouts hit. From the San Francisco Chronicle, “‘I’m overwhelmed’: PG&E power shut-offs leave ill and disabled struggling“:
Napa resident Gina Biter-Mundt said that’s a common problem among people who have health issues — they lack the mobility, or the money, to prepare appropriately, even if they are well informed.
The power went out at Biter-Mundt’s house after midnight Wednesday. She uses a motorized wheelchair to get around, plus a special bed that relies on electricity to lift her up and down so she can sleep safely and get herself into her wheelchair. She’s a disability rights advocate and even teaches disaster preparation classes, and she has a backup generator and a lithium battery to keep her equipment charged.
But even with all of her preparation, she said that her wheelchair would probably last only two more days before running out of power.
And who will be hurt when power outages are more widespread? Popular Science, “California’s massive power outage is a wake-up call for the whole country“:
It’s not just PG&E. Circumstances in California are just a particularly extreme example of something that’s happening across the country: the nation’s power grids are aging and lack appropriate funding for upkeep, while climate change is increasing both the average temperature and the number of extreme weather events throughout the United States to make wildfire conditions more likely.
And it’s not just the electrical grid. Infrastructure is all connected, says Zimmerman. .
You can bet when system failures begin to cascade, Nancy Pelosi’s winery will do fine, just fine. The disabled, the sick, the old, the working class? Those who can’t buy their way out? Them, not so much. Jackpot….
There’s certainly a post to be made on turning PG&E into a public utility. But I think the real issue is political (a question of mobilization). What I notice is not agenda-less “movements” but the various disturbances now taking place concurrently: Hong Kong, France, Iraq, Ecuador, Haiti, Peru, and probably others I can’t bring to mind. The classical trigger for such disturbance is food prices, as with the Tahrir Square uprising, but if that is the case today, I haven’t seen evidence. Rather, in every case — granted, from what little I can dope out from coverage by our famously free press — these disturbances are political and directed at the State. California seems relatively placid. But then, perhaps the reality of having losing power because the power company thought its stockholders were more important than the people it supposedly serves might give rise to a certain sense of irritation among those affected, especially considering there were so many of them. You have micro-grids to win! (Also, grandma won’t die in her home, your house won’t burn down, and the people who wrote you off and threw you away won’t be able to do that any more).
 Here is an interesting thread on PG&E’s financials:
Now that lots of Californians are calling for a public takeover of PG&E, as the public, let’s do what any investor would do before buying a company – review its financial statements. https://t.co/DFLAOTOyoQ Thread 1/
— Alfred Twu (@alfred_twu) October 11, 2019
 With Sanders, I believe and ask “‘I have one life to live, what role do I want to play?” and my answer is to do my little bit to get as many people through the evolutionary chokepoint of the Jackpot as possible (unlike, say, Elon Musk, who would like to rocket off to Mars).
 Agency. Which three letters?