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Oct 24, 2019

Californians go dark in blackout that may affect 1.5 million

PG&E Stock Has 75% Probability of Going to Zero, Citi Analyst says


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Parts of Northern California have gone dark in the first stage of a mass blackout that could eventually leave more than a million people across the state without power.

PG&E Corp. has cut service to customers in counties near Sacramento and Napa Valley in an attempt to keep its power lines from sparking wildfires amid high winds. The blackout is set to spread overnight to other parts of the San Francisco Bay Area. Other utilities are also warning of shutoffs as the winds shift to Southern California. In all, more than 1.5 million people may be affected, based on customer estimates and the average household size.

PG&E has been taking more extreme measures to prevent fires since its equipment sparked a series of blazes that devastated California in 2017 and 2018, saddling the state’s largest utility with an estimated US$30 billion in liabilities and forcing it into bankruptcy. Just two weeks ago, the company carried out the biggest planned blackout in California history, plunging 2 million people into darkness and igniting a debate over how far the state is willing to go to keep fires from happening.

“The only reason we do this is to protect human life,” PG&E Chief Executive Officer Bill Johnson said in a media briefing Wednesday. “We understand the hardship caused by these shutoffs, and the safety issues that come with it. But we also understand the heartbreak and devastation of catastrophic wildfires.”

Winds are forecast to slow by noon Thursday, but another, even stronger storm may follow that could last into next week, according to the National Weather Service. That may trigger a second wave of shutoffs in eight of PG&E’s nine geographical zones starting Sunday.

“This could be the strongest wind event of the season,” becoming potentially bigger than the one that hit earlier this month, Scott Strenfel, chief meteorologist for PG&E, said Wednesday.

In the Los Angeles area, Edison International is warning that it may cut the lights to 308,000 customers, but didn’t say when it’ll decide. In San Diego, Sempra Energy estimated that 24,000 could lose power. PG&E expects a total of about 179,000 customers in parts of 17 counties to be affected in its territory.

The threat of wildfires was listed as critical across the state Wednesday with dry winds set to “ramp up considerably.” Thursday is expected to be the worst for storms across Southern California, the weather service said.

Once the winds have died down, utilities will have to inspect and repair lines before restoring service. PG&E has a goal of returning power to the vast majority of customers within 48 hours of the weather passing -- potentially just in time for the next wind storm to hit.

The PG&E blackout that struck earlier this month drew outrage from residents and state officials who accused the utility of cutting service to more customers than necessary and failing to properly communicate its plans. The company has since vowed to improve communications.

The company’s equipment was identified as the cause of the Camp Fire in November 2018 that killed 86 people and destroyed the entire town of Paradise. It was the deadliest blaze in California history.

Johnson said this week’s shutoffs “don’t have anything to do with the quality of our system, or our vegetation management.” The risk of wildfires in PG&E’s territory has increased dramatically over the past several years due to drought and changes in weather patterns, he said.

--With assistance from Robert Tuttle.