California Fires, PG&E Power Shutoffs — Is This The New Normal? Yes.
California Fires, PG&E Power Shutoffs — Is This The New Normal? Yes.
I’ve been asked whether this is the new normal, on the basis that I might know something about it because I worked at the PUC in the division charged with regulating PG&E. (I did not work on PG&E cases. I did, and do, receive the filings in the PUC’s cases against PG&E. I was sadly aware of the collusion between the PUC and PG&E.)
Short answer: Yes. The increased fire hazards and pre-emptive power shutoffs are the new normal.
Although the governor and PUC’s new president are committed to improving matters, PG&E has the following choices:
1. because they haven’t done the necessary maintenance of old power poles, brush clearing, tree trimming, line upgrades and maintenance, the huge system that generates power in the mountains -186,000 miles of lines -and delivers it to cities has become a calamitous danger. Therefore, they can turn off the power (No, turn it all off, All the way off.)
2. They can leave the power on and definitely increase the likely fires.
3. They can break up/be broken up, into smaller units — but shareholders will sue.
4. They can underground, create micro grids so that power is generated closer to where it’s needed.
All that takes time and capital. The $$ is why the state can’t take over PG&E so forget about that, please. Not to mention again shareholder litigation.
Governor Gavin Newsom is talking about breaking up PG&E, if not the state taking it over. Many people are demanding state takeover. Let me show you the financials.
Per its most recent annual report, PG&E has a quarterly revenue of about $4000 M. It has an O&M (operations and maintenance) cost of $1942 M for three months, one quarter.
There are ~186,000 Circuit miles of distribution lines, and 18,000 miles of transmission. I don’t know the breakdown of O&M between them, but suspect that the cost per mile of the transmission is lower than distribution.
So, if we were to move 15% of PG&E to a public-operated and overseen transmission system, and left the distribution to local and/or PG&E operations, that would be about $30 M quarterly for operation and maintenance of the transmission grid, where (without sufficient data, I admit) the majority of the fire risk originates.
Can a state agency run that more efficiently than PGE? Assume the state would hire most of the PG&E engineers, technical staff.
The cost savings would be not having to pay the shareholders’ dividend. But please observe- last quarter PG&E lost $2553 M, a loss of around $4.81 per share. So, if the state were running PG&E, that money would be coming out of the general fund at the cost of some social services we need, probably mostly education.
From a one-page spreadsheet based on the last shareholder report. a state-operated energy provider would incur a bunch of risk and $$ out of the general fund.
On October 30, PG&E said that it will take ten years — that’s 10 years — to solve the problems. 186,000 miles of lines.
Also on October 30, Governor Newsom said that he won’t let PG&E take ten years. He believes there are ways to lash the beast forward faster. It is true that San Diego Gas and Electric does better at pinpointing where to turn off power. But the foreseeable, 5-year future:
increasing temperatures
the typical drought cycle
longer periods of extremely low humidity in October-November
stronger northeast winds — Diablo winds in northern California, Santa Ana winds in southern California
later rainy seasons
continued construction in the wildland-urban interface zones
no increase in available water
increased home insurance rates
This problem set is not going to be resolved in a happy way within the coming five years. As I am about to turn 74, and Jim just turned 75, I am not giving PG&E 10 years, or 5 years. I don’t believe any Californian wants to live with the increased risk of being burnt alive, and then there’s the rapid diminution of the value of the California house. . .
Cue the Animals, We Gotta Get Outta This Place. .
