Fires are roaring across California again. Last week, the Tick Fire engulfed the Santa Clarita Valley just north of Los Angeles, forcing the evacuation of about 50,000 people. On Monday, the Getty Fire broke out along the western edge of Los Angeles in the early hours of the morning, quickly enveloping 600 acres. In Sonoma County—wine country—nearly 200,000 people had to evacuate over the weekend due to the Kincaid Fire, which doubled in size between Sunday and Monday and now is burning a swath of land more than twice the size of San Francisco. It is only 15 percent contained, with thousands of firefighters working around the clock. Officials haven’t determined the cause, but a jumper cable connecting PG&E equipment to a transmission tower near Kincade Road failed just minutes before officials say the fire began in the same location.
An investor-owned utility, PG&E provides power to most of California, servicing more than 16 million people. It’s also been found responsible for at least 17 of the state’s 21 major wildfires in 2017, not to mention last year’s Camp Fire in which 87 people died, making it the deadliest fire in California history. Several times this month, PG&E has cut the power on more than a million customers for fear of winds sparking a fire. Schools have closed. The lights went out in high-traffic tunnels. Residents on assistive medical devices were told to evacuate. PG&E owns these power lines and is supposed to trim the trees around them and keep its equipment in working order, but it has failed to keep up with these duties for decades. A number of factors, including climate change and patterns of settlement and development, have conspired to bring California to this point. But season after season, after the flames are out and the damage is tallied, Californians all too often learn that the fire started with a PG&E line.
Right now, PG&E would rather pull the plug on hundreds of thousands of people across large areas of the state for a few days—often on short notice—rather than risk another fire. It’s still not clear how the company will account for the more than $30 billion it’s estimated to owe due to destruction caused by the wildfires for which it’s been found responsible. The company filed for Chapter 11 bankruptcy earlier this year, freezing its debts as it continues to offer service to Californians. It’s now in the middle of a reorganization that will likely prioritize the interests of the creditors who are owed money over the fire victims who were displaced or lost loved ones, many of whom continue to pay a monthly bill to the utility.
PG&E is now telling customers that blackouts will be a way of life in California—that they could continue for another 10 years while it crisscrosses the state clearing trees and improving its infrastructure. Everyone feels helpless over California’s energy situation, even regulators and politicians, because it’s not clear what actually should be done about the fires, the blackouts, and PG&E.
PG&E is supposed to be regulated by the California Public Utilities Commission, the state agency charged with overseeing the state’s utility companies. CPUC approves the rates PG&E charges to customers, its budget, and the profit margins it’s allowed to make. PG&E is required to send the commission a report within 10 business days of shutting off power, which is supposed to describe how customers were given advance notice and what factors led the utility to make the call. This is supposed to inform whether CPUC should penalize PG&E—though it never has. PG&E even asked regulators at the end of last year to approve another set of rate hikes, citing the need to invest more in preventing its lines from starting wildfires.
For years, much of the discussion about PG&E has centered on whether it will be allowed to pass off the added cost of maintaining and repairing its equipment and its debt to ratepayers, which is what happened after the company filed for bankruptcy in 2001. Last year, state lawmakers helped shield PG&E from billions in wildfire liability: California Senate Bill 901, which then-Gov. Jerry Brown signed in September 2018, allows electric utilities in the state to pass on such costs to ratepayers, though the law only applies to some fires from 2017 and went into effect this year. On top of that, the judge in PG&E’s bankruptcy case ruled in May that millions of Californians will not be granted a committee to represent their interests during the company’s bankruptcy proceedings. No wonder PG&E elicits so much antipathy these days: Californians keeping having to pay it more while having less insight and say into what it does.
Where there appears to have been less focus, from CPUC and the state Legislature, is risk assessment and maintenance. PG&E’s required trimming of trees surrounding towers—some of which are a century old—is years behind schedule. Removing dead trees that could plummet into electrical lines requires hiking into the wilderness and airlifting the felled trees with helicopters. There are hundreds of miles of land where this work needs to be done. That the work is behind suggests that either the utility commission isn’t properly enforcing PG&E’s requirement to maintain the safety of its lines or the requirements aren’t good enough—or some combination of the two. But as of right now, there’s been scant pressure from politicians to speed up, increase, or modify this work—or any swift movement for regulators to somehow crack down on the utility.
The safety work must be done, or else the power must be turned off. But neither of these options actually feels sustainable in the long term because there are just too many trees and communities can’t operate in intermittent darkness. California has an ambitious plan to transfer to 33 percent renewable energy sources by 2020, and in the long term it will have to move away from a system in which power is ferried across sagging lines in pine forests, hopefully as part of a move away from fossil-fuel-generated energy in general. But there’s still the short term—and the climate change Californians are living through right now.
The state Legislature is out of session at the moment, though if he wanted to, California Gov. Gavin Newsom could convene an emergency session. There’s a sense that someone other than PG&E—CPUC? The governor?—should have to play a greater role in how PG&E maintains its equipment and decides to enforce blackouts. Yet all the stakeholders I’ve spoken to—former regulators, legislative staffers, academics, consumer advocates, fire victims—have a different definition of what needs to happen next.
Is PG&E too big? Probably. Is there not enough money? Definitely. Is there a massive failure of operations? Obviously. Are more people dying every year and losing everything they have? Yes. Newsom has expressed interest in Warren Buffett’s Berkshire Hathaway making a bid for PG&E. Right now, it’s hard to imagine anyone doing a worse job of running PG&E than PG&E has done. It probably makes sense to put the company under some kind of new management. But that won’t fix the fact that policies that are supposed to govern the entity haven’t worked. And it potentially could keep the decision-making of how to clean up this mess off the governor’s desk. PG&E may be a villain to Californians in this case, but for leaders who don’t want to be responsible for blackouts affecting millions, they’re also a convenient one. “If the decision is going to be made by the state, it’s a bailout for PG&E,” the governor told reporters earlier this month. “I don’t support that.” Does that mean we have to count on PG&E to fix this?
So far, Newsom has declared a state of emergency. He asked PG&E to offer $100 vouchers to people who had their power shut off, which it initially refused to do, although there were reports Tuesday that it had agreed to issue credits to Californians affected by blackouts. Since no one else has settled on what needs to happen next, the governor could start by defining what exactly he thinks needs to be fixed to begin to address California’s energy crisis and protect us from the fires that continue to erupt across the state. Without a clear articulation of what that could be, lawmakers and regulators won’t know where to even begin—and the only people tasked with solving this problem will be the people who helped cause it.
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