In a first, PG&E cuts power to 60,000 to prevent wildfires during wind storm

Dive Brief:

Pacific Gas & Electric cut off electricity service to nearly 60,000 people on Sunday in a new attempt to prevent wildfires across Northern California service area during high winds and dry conditions.
The National Weather Service on Saturday issued a Red Flag Warning for the region, cautioning of extreme risk of wildfires due to low humidity and winds reaching above 50 miles per hour. High winds can cause power lines to come into contact with vegetation, igniting fires.
PG&E lines were found responsible for 16 fires last year and California lawmakers passed wildfire liability protections for utilities this summer after PG&E warned that fire costs could force it into bankruptcy or reorganization.

Dive Insight:

PG&E's voluntary shutoffs over the weekend are a reminder of the mounting pressure on California utilities to prevent wildfires against the backdrop of a warmer, drier climate.

Cutting electricity service is the "last resort" in a wildfire safety program rolled out by the utility last year to reduce the risk of fires that have burned thousands of square miles and killed dozens of people across the state in recent years. This weekend was the first time PG&E put that final step into action.

On Saturday, the utility warned customers in 12 counties they could experience service interruptions ahead of high winds forecasted for the following evening.

Just after 8 p.m. on Sunday, PG&E cut power to more than 17,000 customers in Lake, Napa and Sonoma counties based on the risk for wind gusts above 50 mph, the company announced on Twitter. Less than an hour later, it said 42,000 customers in El Dorado, Amador and Calaveras counties also had their electricity turned off.

The nearly 60,000 customers remained without power Monday morning. Most customers will see service restored today, the utility said in a release, but it will continue to monitor weather conditions.

Update: Public Safety Power Shutoff remains in effect for 17k customers in North Bay and 42k in Sierra Foothills. We continue to monitor the weather and will provide updates to our impacted customers in Napa, Lake, Sonoma, Amador, El Dorado and Calaveras counties. pic.twitter.com/Wqde9cqiQj
— PG&E (@PGE4Me) October 15, 2018

PG&E's wildfire plan also aims to reduce its exposure to wildfire expenses. Under California's strict insurance laws, utilities are held financially responsible for wildfire damages if their equipment starts a blaze, even if there are no regulatory violations.

PG&E warned investors this summer that it would take at least a $2.5 billion charge to pay for 2017 wildfire costs, and analysts estimate those expenses could grow to $12 billion.

In June, utility officials told state lawmakers that the costs could force the utility into bankruptcy or force it to break the utility into several pieces. The legislature responded by passing a bill backed by Gov. Jerry Brown that would protect shareholders from the most serious expenses.

While the bill does not alter utility liability, it allows utilities to recover some wildfire costs retroactively and establishes a standard for determining how they can charge customers for wildfire expenses in the future. Interpretation of those standards will be largely left up to the Public Utilities Commission.

Regardless of its liability, PG&E has warned that it will face more and larger fires in the future as a warmer climate creates more dangerous conditions for blazes. Already this year, California fires have burned more than 621,000 acres, according to state officials, a significant increase from the five year average burn of 215,000 acres.