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Fallout from PG&E's proactive wildfire prevention power shutoff continues

Days after the electricity throughout its service territory came back on, Pacific Gas and Electric Co. continued to take criticism for implementing widespread proactive wildfire prevention power shutoffs on Oct. 9-12 as regulators and legislators called for investigations, a consumer advocacy group urged customers to file damage claims, and at least one mayor sought to have his city cut its electric service ties with the company.

In an Oct. 17 memo addressed to the state Senate Democratic Caucus, which was obtained by S&P Global Market Intelligence but not available for publication, Senate President Pro Tempore Toni Atkins asked the Senate Energy, Utilities and Communications Committee to address "serious deficiencies" with the PG&E Corp. subsidiary's practice of shutting off power to prevent wildfires.

Noting that the state is entering peak wildfire season and faces the risk of additional power shutoffs and fire damage, Atkins said a working group of senators has been meeting on a broad range of wildfire concerns. She called on caucus members to provide suggestions for reducing the negative impacts of power shutoffs, insisting that the matter be treated with utmost urgency.

"This issue of shutoffs cuts across numerous policy areas, from energy, to health care, to human services, to transportation and even education," Atkins wrote. "This is an incredibly important issue with broad impacts across the entire state."

Emergency meeting called

The California Public Utilities Commission called an "emergency meeting" on Oct. 18 for utility officers to report on the planning and execution of the "public service power shut-off" events. "Top [PG&E] executives have been called upon by the CPUC to publicly address mistakes and operational gaps identified in the utility's latest public safety power shut-off events and to provide lessons learned to ensure they are not repeated," the agency announced.

The commissioners said the meeting is intended to ensure that PUC members and staff have as much information as possible and can take the actions necessary "to mitigate severe risks to public health and safety" ahead of future Pacific Gas and Electric, or PG&E, wildfire prevention shutoffs. Gov. Gavin Newsom on Oct. 14 called on the PUC to conduct a comprehensive review of PG&E's actions.

Due to a combination of high winds, arid weather and tinder-dry vegetation, PG&E began shutting off power on Oct. 9 to prevent its electrical equipment from starting wildfires. But chaos and confusion resulted for many of the estimated 2 million people affected by the shutoffs to 738,000 customer accounts for periods lasting 48 hours or more. The company said it found more than 100 instances of damage, including downed power lines and trees that fell on lines, any of which could have started a fire if the power had been on.

During the PUC's meeting, agency President Marybel Batjer told PG&E officials that in addition to negligent maintenance of electric infrastructure, PG&E inadequately executed certain measures that were supposed to keep customers safe. PG&E was not fully prepared to manage large scale public safety power outages and did not adequately scale its business operations to allow for an increase in customers contacting the utility, she added.

Company officials admitted they were not prepared for the situation but vowed to focus on making improvements. PG&E President and CEO Andrew Vesey said, "We have to develop a mindset of anticipation" that includes planning for unexpected scenarios, such as the unlikely event that an earthquake might hit while the power is shut off. "We should be thinking of the [public safety power shutoff] all the time," Vesey said.

PG&E Corp. CEO William Johnson said, "Hardships were widespread and made worse by shortcomings in communications, … online maps and other areas." The website and call centers were underequipped to meet the challenge, and critical errors were made that are unacceptable and cannot happen again, Johnson said.

Proactive shutoffs may continue to be needed over the next decade, but PG&E will keep working to narrow the scope of the outages, the CEO said.

Meanwhile, The Utility Reform Network, or TURN, said thousands of businesses were shuttered and many more workers went without paychecks, while 500,000 families lost food when refrigerators and freezers were unable to run for an extended period of time. "The cost to our state economy is estimated to be $2.5 billion," TURN said.

The consumer advocacy group urged customers to submit damage claims to PG&E. "Californians should not have to choose between risking a wildfire and access to basic utilities," TURN Executive Director Mark Toney said. "While PG&E has said it won't pay claims, TURN advises customers who suffered losses to document them and demand reimbursement from PG&E."

Newsom said the utility, which is in bankruptcy court, should provide an automatic credit or rebate of $100 to each affected residential customer and $250 to each small business.

Vesey, however, told the commissioners that PG&E has not decided whether or how it will compensate customers for any damages.

San Jose mayor: It is time for local control

San Jose Mayor Sam Liccardo said he wants his city to create a municipal utility by taking over PG&E's distribution system within the city limits and setting up its own microgrids with distributed generation.

"A resilient future for California's electricity is distributed and local," Liccardo said. "San Jose can provide solutions to avert a dystopian future of unpredictable blackouts."

In a detailed Oct. 17 memorandum to the city council's rules and open government committee, Liccardo recommended polling to determine voter support for a potential citywide referendum on municipalization.

"The limitations of California's investor-owned-utility model became all too apparent to more than 60,000 San Joseans in early October, when we experienced the first of likely many public safety power shutoff events," the mayor wrote.

PG&E Corp. has not been interested in selling its utility assets. Johnson recently rebuffed the city and county of San Francisco's offer to buy utility assets for $2.5 billion.

Yet Manuel Pineda, the chief electric utility officer for the California City of Santa Clara, pointed out an advantage of having a municipal utility in an interview with NBC News. Because Santa Clara operates its own distribution system, it is not affected by PG&E's proactive power shutoffs, Pineda said.