Don’t leave blackout decisions to PG&E
The millions of Californians warily eyeing the return of wildfire season this summer can be forgiven for feeling like the Duke of Wellington facing a looming battle. When asked how he expected his soldiers to fare against the opposing troops, Wellington remarked, “I don’t know what effect they will have on the enemy, but by God, they frighten me.”
A May 30 California Public Utilities Commission decision has designated executives of California’s investor-owned utilities to be our “soldiers” against wildfire risk. The PUC’s guidelines give these companies full discretion to shut down their transmission and distribution lines whenever the utilities deem that weather conditions unduly increase wildfire risk. And we should worry.
These forced blackouts — or “de-energization decisions,” in regulatory parlance — will have big impacts. Extended power outages — lasting five or seven days — bring a parade of horribles. Many residents will not be able to call 911 from their cell phones. Senior care homes lacking backup generators may not be able to operate respirators and other life-sustaining equipment. Traffic signals and street lights will go dark, leaving frazzled motorists to fend for themselves, increasing accident risk and gridlock. Wells and gas station pumps lacking backup generators will cease operating, leaving rural residents without water and urban commuters without gasoline.
While blackouts pose uncertain risks to life, they pose certain economic losses. Every supermarket, restaurant, and home will lose refrigerated food; offices will shut down, struggling small businesses will fail, and many families will flee their homes. A multiday blackout in 2003 cost Ohio, Pennsylvania and New York residents and businesses more than $4 billion and resulted in 100 fatalities.
Most troubling, the responsibility for making this very weighty decision to cut the power lies solely in the hands of California’s utility companies. While the May PUC decision instructs private utilities to coordinate transmission shut-offs with state and federal regulatory agencies, the companies retain full authority to decide whether and when to flip the switch. Notice to emergency responders and local governments may come with no warning.
And yes, here in Northern California, the decision lies with none other than Pacific Gas & Electric. Yes, the same PG&E that just announced $11 million in bonuses to executives for their performance in a year in which the company filed for bankruptcy and racked up more than $30 billion in liabilities for wildfires caused by their own negligence. The same PG&E that — according to a December 2018 PUC report — falsified electric and gas infrastructure records for a half-decade. The same PG&E that issued debt to pay more than $7 billion in dividends to shareholders between 2009 and 2017, while cutting needed investment in infrastructure safety and maintenance.
Beyond questions of PG&E’s competence and judgment, every electric utility has asymmetrical risk exposure — and asymmetrical incentives — when facing the decision to de-energize. PG&E clearly faces financial and reputational liability for wildfires, but will PUC approval shield them from responsibility for lost lives and livelihoods from a lengthy power shutdown? Worse, can PG&E hedge against the wildfire risks created by its own poor safety practices by simply de-energizing transmission lines more frequently? PG&E’s ostensible exposure to only one side of the risk equation may put millions of Californians on the other side.
Predictably, PG&E has submitted a public safety power shutoff plan to the PUC that will vastly broaden the geographic area subject to power shutdowns, expanding the circuit miles of targeted transmission lines from 370 miles last year to 5,500 miles today. The plan also reduces the threshold of de-energization decisions, guaranteeing that blackouts will happen more frequently. PG&E publicly asserts that it will opt to shut down electrical transmission only as a “last resort,” but the temptation to overcorrect is too great.
Meanwhile, cities and counties scramble furiously to protect their residents and critical facilities by installing backup generators, building resilient microgrids with battery storage and solar arrays, and deploying blackout-predicting software. These investments require time and resources, however, along with a state willing to remove regulatory barriers to accelerating this work, particularly for the many Bay Area cities that have formed Community Choice Aggregators to serve local energy needs. Most of these efforts, moreover, will come too late for this summer’s blackouts.
In the meantime, the state Legislature needs to take responsibility for grid safety out of PG&E’s hands, and put it into those of a public agency such as the California Independent System Operator, the Office of Emergency Services that will “flip the switch” only after full consideration of all of the impacts to Californians’ safety. For that, we need a decision maker accountable to the public, not merely to shareholders.
Sam Liccardo is the Mayor of San Jose, CA.