PG&E Cuts Power to Half a Million in California on Fire Risk

PG&E Cuts Power to Half a Million in California on Fire Risk(Bloomberg) -- PG&E Corp., the California utility giant forced into bankruptcy by devastating wildfires, has cut power to 513,000 customers in the first phase of its biggest-ever intentional blackout to keep power lines from sparking more blazes.The shutdowns in Northern California began overnight as dry winds leave the region at high risk of fire. More than 2.7 million people may be eventually affected by the orchestrated shutoffs, based on city estimates and the average size of a U.S. household. The economic impact could reach $2.6 billion.The undertaking is key to PG&E’s strategy for preventing power lines from sparking another deadly -- and costly -- conflagration. Never before have California utilities intentionally cut power to so many people for their own safety. Electricity will be out in cities including Oakland and Berkeley, but San Francisco and Silicon Valley are expected to be excluded.“This is unprecedented in terms of what all of us are facing as a community,” PG&E Vice President Sumeet Singh said at a media briefing Tuesday night. “We are doing everything we can to minimize the impact on our customers’ lives.”The shutoff will occur in three phases, eventually impacting almost 800,000 homes and businesses, including in the San Francisco Bay Area and Napa County. The second one will occur around noon and affect 234,000. The last phase is being considered for the southernmost portions of PG&E’s service area, impacting 42,000.“There is a pretty significant fire risk across California,” said Marc Chenard, a senior branch forecaster with the U.S. Weather Prediction Center in College Park, Maryland. “The biggest threat looks to be today and continuing into the day tomorrow.”As California’s climate warms and dries, the massive blackouts could become a new, annual ordeal. The shutoff warning came two years after wildfires tore through Napa and Sonoma counties, and 11 months after one of PG&E’s transmission lines triggered the Camp Fire, which leveled the town of Paradise and killed 86 people.Near Los Angeles, Edison International’s Southern California Edison utility said it was also considering cutting power to 106,000 homes and businesses. Sempra Energy’s San Diego Gas & Electric utility said it may also cut power.PG&E shares rose 1.1% at 9:49 a.m. in New York. Edison climbed 0.7%. And Sempra Energy rose 0.7%.“We have a grid that was built to manage a set of circumstances that don’t exist anymore,” said Michael Wara, director of the Climate and Energy Policy Program at Stanford University. “We are having to adapt to new circumstances brought about by climate change.”He estimated PG&E’s blackout for two days could have an economic impact of as much as $2.6 billion, using a planning tool developed by Lawrence Berkeley National Laboratory.The cities affected warned residents to brace for six days without power. California’s transportation agency said it was preparing to close two major tunnels in the region due to the loss of power.Within the blackout zones, residents were rushing Tuesday to buy food, water and electric generators -- almost as if a hurricane were approaching. Stores including Rite Aid and Target across Oakland had run out of flashlights and most batteries. Public officials tried to assure residents that essential services would still be available, while asking them be prepared regardless.The section of PG&E’s website where people can check their home’s status was so inundated that it was inaccessible Wednesday morning.‘No One is Happy’Governor Gavin Newsom, at a public appearance Tuesday, called PG&E’s actions warranted while acknowledging the massive disruption the blackout represented.“No one is happy about it, no one is satisfied, but no one should be surprised, because we have been anticipating this moment for a year,” Newsom said. The blackout, he said, “shows that PG&E finally woke up to their responsibility to keep people safe.”State Senator Jerry Hill, a frequent PG&E critic, called the blackout an overreaction. “I think they need to spend the billions they’ve already received to harden the system,” he said. “I think they’re in crisis and will do anything to prevent another wildfire.”The region’s main commuter rail system -- Bay Area Rapid Transit, or BART -- said it expected no impact on its electrified trains or its stations, in part because it had already deployed backup generators to stations that needed them.Similarly, the utility that supplies water to 1.4 million residents east of San Francisco Bay said it had stationed generators at its pumping stations and treatment plants, but it asked residents to conserve water just in case.“We are here to assure Oaklanders that the city of Oakland is fully prepared for the potential planned outage,” Oakland Mayor Libby Schaaf said at a Tuesday press conference. “This is an evolving world where these extreme weather conditions that we see from climate change are happening, and we have got to adjust.”In Emeryville, just across the Bay Bridge from San Francisco, the Home Depot was nearly sold out of back-up generators by Tuesday morning. Andy Kovacevic of Oakland snapped up one of the last units. The 73-year-old said he had rushed down to the store after he got a robo-call from Alameda County, warning him that he could be without power for days.“I’m not happy about it,” Kovacevic said. “I’m not sure it’s really necessary.”(Adds share prices in ninth paragraph.)\--With assistance from Nic Querolo.To contact the reporters on this story: David R. Baker in San Francisco at [email protected];Mark Chediak in San Francisco at [email protected];Jeffrey Taylor in San Francisco at [email protected] contact the editors responsible for this story: Lynn Doan at [email protected], Joe Ryan, Pratish NarayananFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.