Market Overview

Northern California Faces Widespread Power Shutoffs In Face Of Wildfire Threat

Northern California Faces Widespread Power Shutoffs In Face Of Wildfire Threat

With a weather forecast that ratchets up California's wildfire risk, PG&E Corporation (NYSE: PCG) cut power to about 513,000 homes and businesses across 22 northern and central counties early Wednesday.

The affected region includes major cities in the Bay Area, including Oakland, San Jose and Berkeley, KCRA-TV reported

By the end of Wednesday, as many as 800,000 customers could be without power, according to The New York Times

For many of these consumers, the outage is the third in less than a month.

What Happened

The power outages — a reaction to high, dry winds that threaten power lines and risk a spark — are the first of many to come. About 234,000 homes will lose power on Wednesday afternoon, and another 42,000 may be impacted as PG&E monitors the forecast.

Altogether, PG&E’s “Public Safety Power Shutoff Program” is expected to affect 800,000 consumers in 34 counties through mid-Thursday. 

"Given the prolonged period during which the wind event will unfold, and the large number of power line miles that will need to be inspected before restoration, customers are being asked to prepare for an extended outage," PG&E said in a Tuesday press release.

Why It’s Important

PG&E came under fire last year for practices that contributed to devastating wildfires in 2017 and 2018. It ultimately filed for bankruptcy in January in the face of $30 billion in fire liabilities.

In September, it reached an $11-billion settlement representing 85% of insurance claims.

Wednesday’s proactive power outages are part of a broader strategy to preempt wildfires — and ensuing payouts.

“The safety of our customers and the communities we serve is our most important responsibility, which is why PG&E has decided to turn power off to customers during this widespread, severe wind event,” Michael Lewis, PG&E’s senior vice president of Electric Operations, said in a statement.

“We understand the effects this event will have on our customers and appreciate the public’s patience as we do what is necessary to keep our communities safe and reduce the risk of wildfire.”

What’s Next

PG&E is working to comply with judicial orders to improve safety by trimming vegetation overtaking its electrical lines.

The stock was trading 0.41% higher at $10.96 at the time of publication Wednesday. 

Related Links:

Barclays On Energy YieldCos: Buy NextEra, Hold TerraForm

PG&E Trades Higher After Reaching $11B Wildfire Settlement

Posted-In: KCRA-TV The New York TimesNews Media Best of Benzinga


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