Northern California Goes Dark
Government needs to be more hands-on when it comes to keeping the lights on and shutting them off.
Last week more than 700,000 homes and businesses, customers of Pacific Gas & Electric (PG&E) in northern California, lost power. Traffic lights went dark causing numerous traffic accidents. People with medical needs struggled to find power for essential devices. Schools closed, requiring parents to scramble to make arrangements for their kids. Power wasn’t shut down by a hurricane or roiling storm. Instead, the utility flipped the switches and shut off power in many areas.
PG&E said the blackouts were necessary to protect public safety. Dry and windy weather threatened to bring electric wires into contact with dry vegetation and ignite wildfires, endangering lives and destroying property.
Now policymakers are questioning PG&E’s actions. But finding a path forward is going to be hard without a much better understanding of the costs of outages, the extent to which de-energizing lines reduces wildfire risk, and a more clear-eyed view of a private utility’s motivations. It’s going to be up to policymakers to work through these challenging issues, not PG&E.
Tallying the Costs
The types of costs caused by the recent outages are numerous and likely very large. There are the costs to prepare for a shutdown, including for back-up generators in some cases. People couldn’t go to work and school. Businesses shut their doors. The list goes on-and-on.
Surprisingly, as important as electricity is, we don’t have a great handle on the costs of outages. This makes it hard for society, and policymakers, to know how much should be invested to avoid outages. And it’s difficult for policymakers to make the right trade-off between keeping the lights on and public safety, which is what these Public Safety Power Shut-off (PSPS) events require.
Tools have been developed to estimate the cost of outages, but further research is needed, especially for widespread outages such as California experienced.
It’s also important to consider who bears the costs. Under current law PG&E bears the costs of starting fires, but not the costs of shutting down power to prevent them, so they have too much incentive to shut off power.
Benefiting from a Blackout
In California, power lines have sparked several of the state’s most devastating fires. The damages associated with these kinds of fires have grown over the years due to widespread development in wildfire-prone areas. Shutting off power could reduce the likelihood of these serious fires. If the massive loss of life and property and widespread air quality problems caused by recent fires is indicative of what future fires could do, then even a small reduction in the likelihood of a fire would be very valuable.
Ideally, shut-offs would be targeted at the highest risk areas. San Diego Gas & Electric (SDG&E) has tackled this challenge by deploying hundreds of weather stations and cameras to monitor weather conditions, and has sectionalized its lines to allow for more targeted shut-offs. These investments could increase the likelihood that a shut-off targets the highest risk areas where the benefits are greatest.
PG&E, in contrast, is receiving scrutiny for shutting off power in lower risk areas, likely because they were electrically connected to higher risk areas and could not be sectionalized. PG&E is planning to follow SDG&E’s example, but is years behind. Policymakers will be asking whether PG&E should continue using broad shut-offs, or only shut-off power in areas where it has the technology to surgically shut-off the high risk zones.
These shut-offs weren’t entirely about benefiting public safety though. They were also about reducing the liability that PG&E faces if its infrastructure triggers a fire. In California, under the legal concept of inverse condemnation, if an electric utility’s system sparks a fire, the utility is liable for the damages, even if the utility was not at fault. PG&E is already in bankruptcy due to past fires. Avoiding further liabilities is a priority for the company if it’s going to re-emerge as a healthy company.
Taking the Switch Away from the Utility
Since privately-owned utilities like PG&E don’t face the full range of costs and benefits associated with keeping the lights on, they may not reach the right conclusion when it comes to shut-offs. More direction is needed from government. Policymakers will need to take a position on the wisdom of a shut-off event, such as last week’s, and revisit the appropriate standards for the future.
Some are calling for public ownership of PG&E. This could better align the utility’s interests with the public’s, but it wouldn’t make it any easier to determine when and where safety shut-offs should be used.
The state government, unlike the utility, is also uniquely positioned to tackle the other issues surrounding wildfire risks in the state and the impact on utilities. A series of laws recently passed by the legislature and signed by Governor Newsom, and recommendations from Commission on Catastrophic Wildfire Cost and Recovery, show that government is developing serious solutions. But the state still needs a sustainable framework for paying for wildfire damages and a focused effort by local governments to address the growth of development in the most dangerous parts of the state.
The utilities can’t do this on their own. It’s time for the state to go beyond criticism of the utilities and take charge of utility shut offs, while continuing to push forward with other efforts to protect the state from catastrophic wildfires.
Keep up with Energy Institute blogs, research, and events on Twitter @energyathaas.
Suggested citation: Campbell, Andrew. “Northern California Goes Dark”, Energy Institute Blog, UC Berkeley, October 14, 2019, https://energyathaas.wordpress.com/2019/10/14/northern-california-goes-dark/
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Andrew G Campbell View All
Andrew Campbell is the Executive Director of the Energy Institute at Haas at the University of California, Berkeley. At the Energy Institute, Campbell serves as a bridge between the research community, and business and policy leaders on energy economics and policy.
Energy Institute Blog 
One other aspect of this problem is how the costs and benefits are distributed. I don’t have exact numbers in front of me, but the Camp fire alone cost something like 85 lives and several billion dollars. Its not clear to me that a power outage affecting ~2 million people in an urban area wouldn’t have commensurate – or even higher – costs. I don’t know how many folks died as a result of not having electricity in this outage, but I think a reasonable speculation would be of order 100 – that’s 0.005 percent of the affected population (its “certainly” larger than 10…). Similarly – based on some early reporting – it would be hard to believe that the monetary costs of this outage in an urban area would be less than a few billion dollars. Those costs include things like powering down and then up major facilities (e.g., UCB, LBNL, etc.) to losing revenue from having to close businesses like stores and restaurants, not to mention folks whose whole refrigerator contents turned into an inedible smelly mess.
So it seems to me that the costs are within an order to magnitude of being the same, but are clearly distributed differently — a smaller population that suffered the most intense losses in the Camp fire compared with the health and economic pain spread out over a larger population. This isn’t a basis for decision making so much as it suggests that the costs are comparable (if indeed they are…). On the other hand, PG&E is economically liable for the fire but not for the damage caused by a wide-scale outage.
Having the finger of a government entity on the ‘switch’ (maybe best as a veto) might be a place to start. But as society moves to a greater dependence on electricity as we decarbonize our buildings and transportation, the consequences of the loss of electrical energy will also increase dramatically. So much so that I’m persuaded that now is the time for a fundamental rethinking of how we go about this – this is the crisis that creates the opportunity. The governor should constitute a commission to do just that – with no limits to what topics can be incorporated (as long as they are relevant) – with appointees from academia, industry, government, citizenry, etc. and staffed by folks from the CPUC, CEC and others. Their first order of business would be to come up with both a description of ‘where we are’ and ‘where we need to be’ and a roadmap that looks at how to connect them. This effort also needs to create actionable ideas/policies about how to move forward along a series of time scales and enough time and resources to assess what’s working and what’s not and rethink as needed.
I don’t know what the future trajectory is or even should be for private utilities (or even public ones, for that matter) but clearly the path or paths that we find ourselves on now are unlikely to get us where we need to be. Another example of a ‘war’ that is too important to be left to the ‘generals’…
Placerville and DOT learned from last years PSPS- the lights on Highway through town worked during the entire black out!
https://www.mtdemocrat.com/news/placerville-mayor-fired-up-over-pge-negligence/
Having the lights on 50 work made it a lot easier to restock our ice supply this year. This year’s black out lasted around 60 hours at our place. Last years black out was much shorter so we didn’t need to restock our ice.
Free bottled water was available at PG&E’s community resource center located in the Fairgrounds parking lot. If I had known that PG&E office had power I would of gone there to fill up the 5 gallon water jugs that we used to get water to the live stock.
Centralized hierarchically controlled power supply is in terminal decline.
“Policymakers will need to take a position on the wisdom of a shut-off event, such as last week’s, and revisit the appropriate standards for the future.”
The CPUC and Legislature govern all publicly owned utility expenditures. The Legislature provides mandates and policy initiatives. The CPUC approves expenditures while simultaneously attempting to balance rate levels with the interests of customers, environmentalists, and many other advocacy groups. PG&E has obviously missed the mark by not pushing for line improvements and system safety upgrades that could have mitigated the need for system blackouts, however the CPUC as well as state and local legislative bodies bear a major part of this responsibility. The CPUC primary responsibility is to ensure safe, reliable and economical service and that role is compromised when legislative mandates push investments and policies that put upward pressure on rates. When the CPUC attempts to balance those rate increases against legislative mandates and utility investment proposals, line improvements, system upgrades and long run safety can often be compromised. Add to this the utility obligation to serve and weak county and city zoning regulations that allow customers to build in remote, densly forested areas where line extensions and service are often required but subsidized by CPUC decisions.
State laws hold publicly owned utilities liable for system caused wild fires, however this liability ignores the role that the regulatory organizations play in determining how utilities invest and respond. Your suggestion to now have ‘policymakers’ take a larger role in ‘shut-off events’ might also create an opportunity to reassign some of the damage from both the wildfires and outages to the long list of decisions that led to this situation.
Good discussion of the asymmetric PG&E economic motivation.
Another crucial state role in regulation of investor owned utility issue is insisting on effective and cost-effective prevention. SDG&E has advanced fault monitoring equipment to prevent power line breaks from starting fires. This web page from SDG&E describes in more detail a monitoring device that can detect a sudden difference in voltage created between two sensors when a line breaks–in the time scale of 1/60 of a second. Automated equipment responding to this can de-energize that circuit in 1/2 second–less time than it takes for a broken line to reach the ground. (synchrophasors https://www.smartgrid.gov/recovery_act/program_impacts/applications_synchrophasor_technology.html
SCE has been using synchrophasors in wildfire prone areas also–why isn’t PG&E? And why isn’t the CPUC insisting on the more refined grid architecture you describe?
Hello,
Utilities can be expected to do what is in their best interests and those of share holders, not rate payers. This is an example of that behavior and will not be improved if a government entity is involved.
The best way to avoid being treated poorly by ANY monopoly is to take away their power over you by not using their products. In this case electricity. Create your own microgrid and/or share with your neighbors to defray costs. This makes all of us more self reliant and less dependent on large companies that have little regard for our communities.