January 27, 2020

PG&E May Face Blackout Fines Under Bill Passed by State Senate
(Bloomberg) -- PG&E Corp. and other electric utilities could face hundreds of millions of dollars in penalties for shutting off power to prevent wildfires under a bill passed by the California state senate.The measure approved 25 to 2 would also require power companies to compensate residents, businesses and local governments for costs resulting from intentional blackouts. It now faces a vote in the state assembly.The legislation is the latest backlash against PG&E over its decision to cut power from more than 2 million customers in October to prevent power lines from sparking wildfires during windstorms. The utility began resorting to blackouts after being forced into Chapter 11 last year facing $30 billion in liabilities from blazes blamed on its equipment.Southern California Edison and San Diego Gas & Electric have also used shutoffs to prevent blazes but on a more limited scale.California state Senator Scott Wiener, a Democrat who sponsored the bill, said the measure is designed to encourage utilities to be more “surgical” in using blackouts to avoid widespread disruptions. The outages forced schools to close, businesses to shut and cost customers more than $10 billion, according to one estimate.The bill would allow the state to fine investor-owned utilities $250,000 an hour for every 50,000 customers impacted by a power shutoff if regulators determine they acted irresponsibly.PG&E opposes the bill, saying in a letter to lawmakers last week that it would put customers and communities “in a very dangerous position by potentially penalizing” utilities for using intentional shutoffs during dangerous fire conditions.The company decides to cut power based on one metric: will it keep customers safe, PG&E’s chief of state government relations, DaVina Flemings, said in the letter.To contact the reporter on this story: Mark Chediak in San Francisco at mchediak@bloomberg.netTo contact the editors responsible for this story: Joe Ryan at jryan173@bloomberg.net, Michael B. MaroisFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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