PG&E plans to shut off power to nearly 3m Californians
Nearly 3m Californians are preparing to spend their weekend without power after Pacific Gas and Electric confirmed it will be shutting off electricity across 36 counties to avoid the risk of wild fires.
On Saturday morning PG&E, which supplies electricity and natural gas to most of northern California, expanded the projected number of customers to be affected by 90,000 to 940,000, hitting an estimated 2.8m people.
The California Department of Forestry and Fire Protection also issued a mandatory evacuation to 50,000 residents.
Governor Gavin Newsom, who on Friday blamed “decades of greed and mismanagement by PG&E,” tweeted on Saturday “If you live in the area, please stay safe, alert, and follow directions of local officials.”
The shut-offs, which have sparked outrage, are expected to begin around 2pm, in six zones spanning 36 counties including Western Sacramento Valley and the densely populated greater Bay area — home to Silicon Valley. They are meant to prevent power lines from igniting fires owing to strong winds.
Outages are likely to be felt across many parts of the region. Utilities in southern California also warned of more contained power outages.
In Marin County, north of the Golden Gate Bridge, the Sheriff’s Office said electricity would be shut down around 4pm local time and told residents they “should be prepared to be without power for up to 5 days.”
The Sheriff’s Office also recommended residents identify evacuation routes, take stock of non-perishable foods, have petrol filled in their cars and be prepared to leave quickly.
The expected shutdown would be a more extensive repeat of the 36-hour blackout earlier this month that cut power to 750,000 PG&E customers, as the realities of living in a region that has become more vulnerable to catastrophic wildfires began to hit home.
Autumnal conditions — when a long, dry season draws to a close and strong winds pick up — make California particularly susceptible to wildfires. But climate change has been blamed for a steady increase in the dangers, brought home by several years of drought earlier this decade and the past two years of record conflagrations.
Serious fires in 2017 and 2018 were blamed on faulty PG&E transmission equipment, prompting it to take greater precautions when the fire danger is at its highest. The utility sought bankruptcy protection early this year as it tried to deal with liabilities from the past two years of fires, estimated at anywhere from $15bn to more than $50bn.
The warning of more extensive power cuts stirred a fresh round of anger on Friday, causing local politicians to scurry for cover. Governor Newsom called the situation “unacceptable”, adding: “Issues of corporate greed meeting issues of climate change have created these conditions.”
The local economy should be largely unaffected by sporadic power cuts, even if they last for days, said Christopher Thornberg, an economist at Beacon Economics in Los Angeles. But the inability to keep the lights and air conditioners on has dented the region’s self-image. “What we’re talking about is a reduction in consumer utility — in happiness,” Mr Thornberg said.
PG&E’s predicament has sharpened a fight among the state’s public utility commission, politicians and local cities over how best to manage local electricity services. San Jose, which lies at the southern end of Silicon Valley, has proposed a city takeover of its local power system, wresting control from PG&E.
The company’s struggles have also prompted a battle among hedge funds over the spoils that could come from a financial restructuring. Investors who have stepped in to buy the utility’s battered stock have asked the court to approve a plan that would leave existing shareholders with an ongoing interest in the company. However, the court opened the door recently to a rival plan, proposed by bondholders led by activist investor Elliott Management, that would virtually wipe out the value of the stock.
“There’s a lot of money out there” to back a rescue, said Mr Thornberg, thanks to the ability of regulated power companies to pass on their costs to ratepayers. “The question is, how much of the past cost can they push off on to someone else?”
Meanwhile, PG&E’s shares, already down 85 per cent since it fell into bankruptcy in January, plunged 25 per cent on Friday, to $5.40, as the company faced blame for a fire that broke out earlier this week in a rural area 75 miles north of San Francisco.
The company shut down power to customers in the area 10 minutes before the fire began after detecting a fault in its equipment. But it kept the main transmission lines in the area open after an inspection appeared to show they were “in excellent condition”, said Bill Johnson, chief executive.