PG&E boss says it wasn’t fully ready for California outages
SACRAMENTO, CA – The head of Pacific Gas & Electric Corp. told angry California lawmakers Monday that the nation’s largest electric utility wasn’t fully prepared for the effects of its unprecedented outages last month even as it plans to shut off power to about 375,000 people this week to prevent wildfires.
Lawmakers wanted answers from Bill Johnson and executives from the state’s other two investor-owned utilities about the shutoffs last month that caused life-saving medication to spoil, businesses to lose money and communications networks to go dark.
PG&E CEO Bill Johnson blamed his company’s poor response to the blackouts affecting millions of people partly on a sense of complacency after a much smaller outage went well earlier this year.
“We weren’t as well prepared as we thought, and we needed to give a little more attention — a lot more attention — to impacts after we shut the power off,” Johnson said. “I do think as things went on, we got better at each one of these.”
Lawmakers were skeptical, venting residents’ pent-up frustration at the company that is trying to emerge from bankruptcy after its outdated equipment has sparked devastating wildfires in recent years.
Democratic state Sen. Scott Wiener said he believed PG&E had “forfeited its right to operate as an investor-owned utility.”
State Sen. Bill Dodd told Johnson that an Oct. 9 shutoff was “a big ‘screw you’ to your customers.”
“That has really created among the Legislature and among your customers a real trust issue,” Dodd said.
Meanwhile, people in Northern California were bracing for more outages. PG&E has started notifying customers in parts of 18 counties that it may turn off electricity Wednesday because of strong winds that could spark wildfires in dry conditions.
The blackout is expected to affect 375,000 people in the San Francisco suburbs, Sierra Nevada foothills, wine country and elsewhere.
Johnson said PG&E has struggled to respond to the growing threat of wildfires over its coverage area of more than 70,000 square miles (181,299 square kilometers). In 2012, he said less than 15% of its power lines traversed areas at high risk for wildfires. Just seven years later, that’s grown to more than 50%.
The state’s two other investor-owned utilities — San Diego Gas & Electric and Southern California Edison — also have turned off power this year. But their shutoffs have affected far fewer people and been much shorter.
Caroline Winn, San Diego Gas & Electric chief operating officer, said the company’s power outages have averaged about 24 hours, in part because it has upgraded its equipment to more narrowly tailor shutoffs.
Johnson told lawmakers that PG&E has spent $30 billion over the last 10 years improving its electrical network. He also said the company recently inspected its vast network of power lines and other equipment for repairs and replacement. The company has plans to install “microgrids,” or backup power sources, for isolated areas to help keep power running during a shutoff.
“We do not expect an annual repeat of what we went through this October,” Johnson said. “That just cannot happen again.”
But lawmakers were skeptical. Democratic Sen. Bill Monning noted the company is facing potential damages of up to $30 billion for a series of wildfires in 2017 and 2018, including the most devastating wildfire in state history that destroyed roughly 19,000 buildings and killed 85 people.
Monning said PG&E has not buried its power lines in fire-prone areas to “save money for shareholders.” He did note that if the company decided to bury one-quarter of its power lines in wildfire-prone areas, it would cost roughly $15 billion.
“I think you will see us undergrounding considerably more of our system,” Johnson said. “Not so much because of the liability, but because it’s the right thing to do given the circumstances.”
Preemptive power shutoffs are not new to California, but the scope of those by PG&E this year have been unprecedented. The company has more than 5 million customers in Northern California.
Lawmakers have set a June 30 deadline for PG&E to emerge from bankruptcy or else forfeit participation in a fund designed to help cover damages from future wildfires. But negotiations have bogged down as shareholders and creditors battle in bankruptcy court over the future of the company.
A federal bankruptcy judge has appointed a mediator to try to resolve the case. But Democratic Gov. Gavin Newsom has threatened to intervene if the company can’t reach an agreement by June 30, including a potential state takeover.
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