By Associated Press
The utility that serves more than 5 million electrical customers in one of the world’s most technologically advanced areas is now faced again and again with a no-win decision: risk starting catastrophic deadly wildfires, or turn off the lights and immiserate millions of paying customers.
Pacific Gas & Electric is in bankruptcy, facing $30 billion in liabilities, billions more in needed upgrades to its system and an uncertain path to safely providing reliable power to a vast portion of California.
How that came to be is a story not of a single villain but of systemic failure by the utility’s management, the regulators who oversee it and the politicians who let it all happen. It’s a story of climate change, a housing crisis and an aging power system that, like much of the infrastructure in the U.S., has fallen into disrepair.
“There’s a ton of blame to go around here,” said Christopher Knittel, director of the Center for Energy and Environmental Policy at the Massachusetts Institute of Technology’s Sloan School of Management.
The problem and its potential solutions have jumped to the top of the California political agenda. But most experts agree: Even under the best scenarios, the fires and widespread power shutoffs will be here for years to come. In the meantime, Californians will pay higher prices for less reliable energy.
“It’s not just going to be a PG&E cost, isolated from impact on the consumer,” said Matthew Cordaro, a longtime utility executive and a trustee for the Long Island Power Authority, which sustained significant damage during Superstorm Sandy in 2012. “The consumer’s going to have to pay for it.”
The danger from a growing number of people living next to power lines and dry forests as the climate changes wasn’t unknown, but it wasn’t front of mind before electrical systems started a series of fires that swept through Northern California two years ago, leaving a trail of destruction and killing dozens. What seemed unthinkable was repeated just a year later, when PG&E power lines started the Camp Fire that destroyed the town of Paradise and killed 85 people.
PG&E operates some 125,000 miles (200,000 kilometers) of power lines, enough to wrap around the equator five times. Much of the system traverses remote forests that are dry from years of drought and dense from a lack of logging or natural fires. California has 138 million dead trees, all of them potential fuel for fire.
“There’s a ton of blame to go around here” – Christopher Knittel, director of Center for Energy and Environmental Policy
Meanwhile, a shortage of housing in cities — and stiff resistance to building more — has pushed new construction into forested areas, where there are few barriers to building.
And the climate is warming. While scientists can’t blame climate change alone for any one fire, they say it contributes to drier brush, hotter temperatures and stronger winds, all of which help flames spread farther, faster. Five of the 10 largest fires and seven of the 10 most destructive have happened in the last decade. The deadliest were started by power lines.
More than half of PG&E’s 70,000 square miles (181,000 square kilometers) of service territory is designated as high risk for fires, according to the company’s wildfire mitigation plan submitted this year to the state’s utility regulator, the California Public Utilities Commission.
Kris Mayes, Arizona’s former top utility regulator who now leads the Utility of the Future Center at Arizona State University, said PG&E should be broken into two or three more manageable entities, and California should shift to “performance-based regulation” that rewards utilities for things like safety, reliability, customer service or the amount of renewable energy. Utilities now are awarded a fixed profit on their investments. The need for long-distance transmission lines could be reduced by conserving energy and generating and storing more of it locally, she said.
“The utilities have been rewarded over decades for building big stuff, including these power lines that are now causing fires,” Mayes said.
Whatever route PG&E goes, it still faces extensive debt for its existing infrastructure and stiff liabilities from starting the two deadliest and most destructive wildfires on record in United States history. Those costs, and likely the cost for system upgrades, are likely to be passed to its customers.
“This is an unacceptable situation in California, and no utility should ever put its customers in harm’s way,” Mayes said. “It’s just not supposed to happen.”