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California mayor blames regulators for PG&E's electricity problems and blackouts

Adam Shapiro

Troubled California utility Pacific Gas and Electric Company, PG&E (PCG) will allow customers to sign up for alerts as it prepares for more blackouts to prevent tragedies like last year’s catastrophic Camp Fire, which destroyed more than 18,000 buildings and killed 83 people.

PG&E cut power this week to 750,000 customers, 1.5 million people, in Northern California when strong winds threatened to blow down PG&E power lines and possibly ignite another fire.

But PG&E CEO Bill Johnson said the utility was not adequately prepared for the backlash from customers it left in the dark. “We faced a choice here between hardship on everyone and safety, and we chose safety,” Johnson said.

In towns like Cloverdale, the preventative power outage caught people off guard. Cloverdale Mayor Melanie Bagby told Yahoo Finance’s On the Move she doesn’t blame PG&E. “I think that after the initial wave and shock of anger are over, people are really going to need to look at who the regulators were who allowed PG&E to make a lot of bad decisions by not upgrading their infrastructure,” said Bagby, adding that the California Public Utilities Commission should be held accountable because it allowed PG&E to fall behind on necessary power line maintenance.

“They know that the decisions that were made in the PG&E boardroom to pay out dividends to their investors, instead of investing in their infrastructure, that’s where the blame really lies and of course it lies with the regulators,” Bagby said.

The ‘new normal’

While PG&E said it had restored power to half its customers Friday, the utility suffered a setback earlier this week in its effort to emerge from bankruptcy. U.S. Bankruptcy Court Judge Dennis Montali ruled PG&E bondholders can start selling their corporate reorganization plans in direct competition with PG&E which until now had exclusive rights to outline its reorganization.

Bagby said none of that addresses what she calls the “new normal,” which Bagby said threatens the local economy and is unacceptable. “We can’t take a hit to our economy, who is going to want to invest in businesses here when we know that the power could be undependable,” she asked. “We’re having a situation with our tourism industry. This is our high season. This is the time when people come to experience crush and harvest at our wineries.”

Cloverdale is located north of San Francisco in California’s popular Sonoma County wine country. The city has an entire industry around wine country weddings, Bagby points out. But with intermittent electricity, Bagby said the area is being dealt a double blow.

Bagby, who is part of Sonoma Clean Power, an organization dedicated to generating “clean” power to fight climate change, said the time has come to decentralize the electric grid and invest in backup technology. But none of that can happen fast enough to keep the lights on as PG&E plans future blackouts to prevent wildfires and attempts to rebuild its transmission infrastructure.

Bagby warned her neighbors and millions of others that they should get ready for several more modern day versions of the dark ages. “I think that after this event, people are going to start realizing that they really need to prepare for five to seven days, and perhaps longer, without power,” she said.

Adam Shapiro is co-anchor of Yahoo Finance On the Move.

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