California Launches Probe of Major Utilities Over Power Shutoffs

(CN) – California’s utility regulator voted to launch an investigation into all three investor-owned utilities Wednesday in the aftermath of several bouts of prophylactic power outages that have affected millions of customers and dented California’s powerhouse economy.

Pacific Gas & Electric crews work to restore power lines in Paradise, Calif., on Nov. 9, 2018. (AP Photo/Rich Pedroncelli, File)

The California Public Utilities Commission announced a formal investigation of the three major utilities – Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric – aimed at determining whether the power companies properly balanced the duty to provide reliable and safe electricity service against the stated public safety concerns of wildfire threats.

PG&E said it welcomes the perspective of its regulator and other interested parties regarding its efforts to navigate what it characterized “October’s historic weather events.”

“We’ve taken those requests and suggestions seriously, implemented many of them in real time, and are working to implement more for potential future PSPS events,” the utility said. “While we recognize that the scope of these events is unsustainable in the long term, it was the correct decision for safety given the large-scale, historic weather events and ensuing equipment damage that unfolded across our service area.”

In a statement, San Diego Gas & Electric said it is also looking forward to working with the commission and noted it has “worked closely with our customers for the past several years to discuss their needs and concerns related to power shutoffs.”

The voluntary power outages, officially known as Public Safety Power Shutoffs (PSPS), began Oct. 1 as a combination of low humidity, high winds and low moisture content in vegetation throughout California caused utility managers to fret that yet another catastrophic wildfire could be in the offing.

Initially, the power outages affected about 800,000 customers primarily in the Bay Area, affecting 2 million people. But as October progressed into November, utilities in Southern California joined PG&E with pre-emptive power outages that affected up to 3 million California residents at one time.

The program prompted fierce backlash among customers, most of whom pay some of the highest rates for electricity in the nation. Residents criticized PG&E most vehemently, saying the utility has delayed important infrastructure upgrades and maintenance projects for years while paying enormous bonuses to an ever-expanding roster of executives.

Governor Gavin Newsom said the shutdowns were a product of PG&E’s “greed and mismanagement.”

Newsom is not alone, as a chorus of lawmakers and public officials have called for comprehensive reform of the nation’s largest utility, with some even demanding a state takeover of its operations.

The backlash culminated in the commission’s Thursday announcement.

“It is important for the CPUC to determine if the utilities complied with using Public Safety Power Shutoffs as a last resort, and to collect the knowledge gained towards any revisions needed for next year,” said Commissioner Genevieve Shiroma.

The commission has come under fire of its own for what some characterize as a lax regulatory approach to the utilities under their purview. But Newsom said the appointment of Marybel Batjer to lead the agency represents a different era.

“She comes in with a reputation for improving state bureaucracies,” said Les Guliasi, president of the Power Association of Northern California.

Past presidents of the commission have gotten into trouble for cozy relationships with PG&E and other utilities, including Michael Peevy, who resigned amid accusations of judge-shopping on behalf of the utility and leaning on friends in the industry to contribute to various political initiatives.

Guliasi said the new administration at the commission is not only trying to distance itself from past indiscretions but is trying to respond to contemporary issues.

“There has been a huge public outcry and a lot of it is justified,” he said. “The government has to prove that it is responsive to the public at large.”

The pre-emptive power shutoffs came about after two of the deadliest and most destructive fires in California history. In 2017, the Tubbs Fire destroyed an entire neighborhood of Santa Rosa, killing 22 and costing more than $1 billion in damage. The following year, the Camp Fire razed the entire town of Paradise, killing 85 and causing more than $16 billion in damages.

After Cal Fire investigators determined a PG&E transmission line sparked the Camp Fire, the utility quickly filed for bankruptcy and is still mired in the process as it contends with another bout of outrage.

PG&E and others argue that climate change – not corporate malfeasance – is one of the larger factors in the recent spate of fires, as changing climatic conditions have transformed California into a vast tinderbox.

“This is perhaps the new normal,” Guliasi said. “Because of drought conditions, warm temperatures, high winds and all the attendant issues of global warming, the utilities have to look differently at how they operate.”

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