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PG&E Plans to Plunge 2.8 Million Californians Into Darkness

Mark Chediak and David R. Baker
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The Cost of Doing Business in California Is One Blackout a Week

(Bloomberg) -- PG&E Corp. will cut power to an estimated 2.8 million Californians starting Saturday in the state’s largest -- and potentially longest -- deliberate blackout ever.

The bankrupt utility giant will turn off the lights to about 940,000 homes and businesses across Northern California -- including parts of Oakland, Berkeley and other San Francisco Bay Area cities -- as it tries to keep power lines from igniting wildfires during the strongest wind storm in years. The shutoff will hit about 7% of California’s population and spread to almost a fifth of the utility’s total customers, spanning 36 counties. San Francisco is expected to be spared.

“This wind event is forecast to be the most serious weather situation that Northern and Central California has experienced in recent memory,” said Michael Lewis, PG&E’s senior vice president of power operations. “We would only take this decision for one reason –- to help reduce catastrophic wildfire risk to our customers and communities.”

It will be the third time this month that PG&E has resorted to mass blackouts to avoid wildfires. The San Francisco-based company has been taking more extreme measures since its equipment sparked blazes in 2017 and 2018, saddling it with an estimated $30 billion in liabilities and forcing it into bankruptcy. The shutoffs have ignited a debate over how far California is willing to go to prevent fires in an increasingly warm and dry climate. Despite the power cuts, blazes continue to burn.

Read More: The Cost of Doing Business in California Is One Blackout a Week

In Southern California, Edison International is warning that it may cut service to more than 100,000 customers. Further south in the San Diego area, Sempra Energy said it’s monitoring weather forecasts.

PG&E said the blackout will begin at 2 p.m. in communities near Sacramento and spread within hours to parts of the Wine Country, the San Francisco Bay Area and eventually Central California. The region may be powerless for two days, if not longer. The schedule is more aggressive than the one the company laid out Friday and the number of customers affected has risen by 90,000.

Weather models show the wind storm could be the most powerful to hit California in decades, according to PG&E.

Wildfires are already raging at both ends of California, prompting Gavin Newsom to declare a state of emergency Friday. Near Los Angeles, blazes have prompted authorities to order 40,000 evacuations. And north of San Francisco, a fire is raging amid the vineyards of Sonoma County, triggering a historic evacuation of tens of thousands of homes there. It has destroyed at least 49 structures and burned more than 26,000 acres.

The Sonoma County fire was reported minutes after a PG&E transmission line in the area malfunctioned late Wednesday. Firefighters have not determined the cause of the blaze. PG&E’s shares plummeted 31% Friday to $5, a record low. Shares of Edison fell 8.5% as fires burned in its Southern California service territory.

On Saturday, Sonoma County Sheriff Mark Essick implored residents to leave immediately before the storm causes the fire to grow even more rapidly. “We’d like to get you out while we still have power and we still have communications,” he said.

All told, there’s about $12 billion worth of property within a mile of the active fires, said Chuck Watson, a disaster modeler with Enki Research.

The prospect of more liabilities from wildfires is especially vexing for PG&E. Since filing for Chapter 11 in January, the judge overseeing the case has warned that another big blaze would upend the utility’s bankruptcy and potentially wipe out shareholders. Any claims from new fires sparked by PG&E would have to be paid out first -- and in full -- before those from previous blazes get a dime.

The winds are arriving at a precarious moment. California receives almost no rain during its summer, and a five-year drought earlier this decade killed millions of trees that can now easily ignite. Recent winds have dried out grasses and shrubs even further.

And the threat won’t end this weekend: Another front is expected to move in through Tuesday, bringing back strong, dry winds and once again raising the risk of wildfires spreading uncontrollably.

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

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Linus Chua

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