Dive Brief:

• California regulators are assessing whether to sanction Pacific Gas & Electric (PG&E) after the utility failed to coordinate with customers, local governments and first-responders during wildfire-related power shut-offs in October.
• The California Public Utilities Commission at a Nov. 13 meeting also launched a formal investigation into power shut-offs implemented by all of the state's investor-owned utilities this year. The agency's Safety and Enforcement Division will produce a report on how PG&E, Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) complied with regulations before, during and after their de-energization events.
• "These sustained PSPS events cannot be the new normal for California. The frequency and scope of the PSPS events of 2019 impacted communities and in a profound way," CPUC President Marybel Batjer said.

Dive Insight:

California IOUs deployed 12 separate de-energization events in October, leaving millions of residents across the state without power. The largest event was a PG&E outage that began on Oct. 26, affecting 38 separate counties and 975,000 customer accounts.

Utilities say the shut-offs prevent their power lines from sparking wildfires in the state. But regulators are growing increasingly concerned about the impacts of the outages on local economies and vulnerable groups, like people who depend on electric medical equipment. Nevada City, California, was "sent back into the dark ages" during a recent outage, Mayor Reinette Senum told the CPUC at the meeting. Residents couldn't use their cellphones or landlines, and lost interest access.

On Nov. 12, CPUC President Marybel Batjer and Administrative Law Judge Melissa Semcer issued a ruling asking PG&E to show cause as to why it should not be fined for violating communication protocols during the shut-offs. The protocols were outlined in a CPUC decision earlier this year. PG&E's implementation of the shut-off was "ill-conceived, poorly planned, uncoordinated (both internally and externally) and ineffectively communicated," the ruling said.

The utility could be fined between $500 and $100,000 for each offense identified by the commission. Regulators have scheduled a conference to discuss the investigation on Dec. 4 at the CPUC.

PG&E has taken feedback on the shut-off program seriously and is working on implementing suggestions from the CPUC, Gov. Gavin Newsom, state agencies and customers, utility spokesperson Jennifer Robison told Utility Dive in an email. 

"While we recognize that the scope of these events is unsustainable in the long term, it was the correct decision for safety, given the large-scale, historic weather events and ensuing equipment damage that unfolded across our service area," she added. 

When the CPUC authorized utilities to shut off their systems during high fire-risk periods, regulators were likely thinking about San Diego Gas & Electric's more localized de-energization program, former Commissioner Mike Florio told Utility Dive. PG&E's more expansive shut-offs, however, have caught people off guard.

Mounting regulatory ire and possible fines could also have implications for the utility's bankruptcy, according to Florio. Both the CPUC and Newsom are participants in PG&E's reorganization process and could, in theory, put forward a reorganization plan for the utility that would compete with the company's proposal.

"There's not too much more in damages they could take and they'll be completely insolvent — and then it's a whole different ball game," Florio said.

As part of the CPUC's broader investigation into the shut-offs, the agency's Safety and Enforcement Division will recruit an external consultant to review utility compliance with regulations, as well as potential changes to the state's de-energization policies. PG&E, SCE, SDG&E and other smaller utilities in the state have until Dec. 13 to respond to the proceeding. 

PG&E isn't the only California utility struggling with wildfire-related liabilities. On Nov. 13, SCE announced a $360 million settlement with a group of local governments and public entities that were affected by wildfires and consequent mudslides in 2017 and 2018. The settlement, however, does not include the claims of individual wildfire victims and other parties, and SCE did not admit to wrongdoing as part of it.

"We look forward to engaging with other parties who have a similar interest in good faith settlement efforts," Pedro Pizarro, president and CEO of parent company Edison International, said in a statement. "We also will continue to make substantial investments in our system and enhance our operational practices to reduce the risk of wildfires in our service area and safely provide power to homes and businesses," he continiued.