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California regulator to probe utilities' mass power outages aimed at preventing fires

By Steve Gorman
FILE PHOTO: PG&E works on power lines to repair damage caused by the Camp Fire in Paradise

By Steve Gorman

(Reuters) - California regulators said on Monday they will open a formal probe of whether utilities violated any rules by cutting power to millions of residents for days as a precaution during recent periods of high winds and heightened wildfire risks.

The announcement did not single out any utilities by name, but the bulk of "public safety power shut-offs" under scrutiny were implemented by Pacific Gas and Electric Co, a unit of PG&E Corp <PCG.N>, California's largest investor-owned utility.

PG&E filed for bankruptcy in January, citing $30 billion in civil liability from major wildfires sparked by its equipment in 2017 and 2018, including last year's Camp Fire, which killed 85 people and incinerated most of the Northern California town of Paradise. That fire ranks as the state's deadliest on record.

Responding to the latest windstorms over the weekend, PG&E turned off electricity to 970,000 homes and workplaces in 37 counties in northern and central California, encompassing millions of people across more than half of PG&E's service area of 70,000 square miles.

That tally far surpassed the previous record planned outage of 730,000 customers during high winds two weeks ago.

Even as PG&E crews scrambled on Monday to inspect power lines and restore electricity after winds subsided, the utility announced plans for yet another round of shut-offs expected to leave as many as 605,000 customers off the grid on Tuesday and Wednesday, when extreme winds are forecast to return.

The company, which has defended the mass outages as a matter of public safety, said it had logged more than 20 preliminary reports of damage to its system from the most recent windstorm.

The precautionary blackouts have drawn sharp criticism from the governor and state regulators as being too widespread and disruptive, as well as poorly managed and communicated.


'HELD TO ACCOUNT'

California Governor Gavin Newsom has said PG&E is largely to blame, arguing that corporate greed and mismanagement kept the utility from upgrading its infrastructure while wildfire hazards have steadily worsened over the past decade.

He has vowed that PG&E and other utilities would be "held to account" for their lapses by the new California Public Utilities Commission president he appointed in July, Marybel Batjer.

The agency's statement on Monday said its safety and enforcement division will ask commissioners in the next 30 days to open an investigation of the outages.

The inquiry will examine utility compliance with agency regulations, as well as "any resulting violations" and potential penalties, the statement said.

Fines of up to $100,000 per violation per day and additional penalties can be assessed for violations, agency spokesman Christopher Chow said. PG&E was previously slapped with a record $1.6 billion penalty for a deadly 2010 gas pipeline explosion in San Bruno, California.

Batjer also plans to reevaluate protocols for precautionary outages and how utilities can minimize them.

Responding to the commission, PG&E said, "We are constantly working to minimize the impact of these safety shut-offs while prioritizing public safety." It said the blackouts' only purpose "is to reduce the risk of catastrophic wildfire in the communities that we serve."

PG&E acknowledged last week that a major wildfire in Sonoma County wine country erupted near a damaged a transmission tower owned by the utility at about the time a live high-voltage line carried by that tower malfunctioned.


(Reporting by Peter Henderson in San Francisco; Writing and additional reporting by Steve Gorman in Culver City, California; Editing by Sandra Maler, Cynthia Osterman and Edwina Gibbs)