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PG&E’s Next Massive Blackout Could Hit 1.8 Million Californians

David R. Baker and Mark Chediak
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PG&E’s Next Massive Blackout Could Hit 1.8 Million Californians

(Bloomberg) -- PG&E Corp. will deliberately cut the lights to as many as 1.8 million Californians on Tuesday -- the latest in an unprecedented string of mass blackouts that the bankrupt California utility giant has orchestrated to prevent wildfires.

PG&E will start cutting the lights to as many as 605,000 homes and businesses early Tuesday in parts of the San Francisco Bay Area, California’s iconic wine country and areas around Sacramento, to keep high winds from knocking down its equipment and sparking blazes. The company was trying to shrink the scope of the shutoff late Monday by returning some high-voltage lines to service, but made no promises. Gusts were forecast to pick up early Tuesday and die down by Wednesday.

The San Francisco-based company has taken increasingly extreme measures to avoid fires after its equipment was blamed for a string of deadly blazes in 2017 and 2018 that saddled it with an estimated $30 billion in liabilities and forced it into bankruptcy. Its recent decisions to carry out widespread shutoffs -- four in this month alone -- has drawn outrage customers and heightened calls on state lawmakers to find a more viable solution, especially as fires keep erupting.

More than 3 million people are still recovering from PG&E’s last blackout. Over the weekend, the utility carried out its largest yet, plunging as much as one-sixth of its total customers into darkness. More than half of those affected remained in the dark on Monday and some may not get their power back by the time the next outage hits.

“This event will start to impact the same people again in certain areas,” PG&E utility chief Andy Vesey said in a media briefing late Monday. “It is the weather -- it’s not something we can control.”

PG&E’s power lines are, meanwhile, already being probed in connection with several fires that have broken out during the recent wind storms. The company disclosed on Monday that its equipment may have ignited a fire that destroyed a tennis club in a city near San Francisco and another blaze that damaged four homes.

A fast-moving wildfire in Sonoma County, called the Kincade fire, was reported minutes after a PG&E line in the area malfunctioned last week. That one is still raging across wine country, triggering an historic evacuation of almost 200,000 people. It has burned more than 66,000 acres and destroyed almost 100 structures.

PG&E shares sank 24% Monday to $3.80, a record low. Its bonds plummeted as investors feared more disaster-related charges are looming for the company.

Blazes have also erupted in Southern California, prompting residents in affluent parts of Los Angeles to flee. Governor Gavin Newsom has declared an emergency.

“Leave,” Los Angeles Mayor Eric Garcetti said at a press conference Monday. “The only thing you cannot replace is you and your family. So get your loved ones, your pets and leave.”

One brush fire in the Los Angeles area that’s burned more than 600 acres forced evacuations from the upscale Mulholland Drive south to the Pacific Ocean. The nearby Getty Center art museum has thus far been spared. A second blaze in the region, called the Tick fire, sent tens of thousands fleeing.

As fires engulfed hillsides, scrub land and vineyards, smoke is blanketing some cities. Commuters walked through San Francisco wearing face masks Monday. At one point, Oakland had the fourth-worst air quality in the U.S.

Other highlights from the blackouts and fires:

If PG&E can get a collection of transmission lines back into service by tomorrow, there’s a chance the company could limit its next blackout to as few as 240,000 customers.The outages are extending to Southern California, where Edison International said about 25,000 customers were without power and another 350,000 homes and businesses could follow.California regulators began an investigation Monday into the mass blackouts to ensure rules are being followed.The fires raging across California have already damaged about $25.4 billion in property, said Chuck Watson, disaster modeler at Enki Research. The Kincade fire has cost $10.6 billion. In Southern California, the tally is $14.8 billion, mainly from the Tick, Getty and Saddle Ridge blazes.

--With assistance from Christopher Martin, Brian Eckhouse, John Gittelsohn and Dave Merrill.

To contact the reporters on this story: David R. Baker in San Francisco at dbaker116@bloomberg.net;Mark Chediak in San Francisco at mchediak@bloomberg.net

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Joe Ryan, Kara Wetzel

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