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California’s Painful but Expensive Power Blackouts

Posted By Administration, Tuesday, October 15, 2019

By now, Pacific Gas and Electric’s rolling blackout in Northern California has ended or is close to being done. It caused huge problems for families, individuals and businesses throughout the regions 34 counties that were affected.

The blackout ultimately affected almost 800,000 people.

The reason for the blackout has to do with the state’s annual high winds. They have caused power towers to malfunction and cause the fires that have caused billions in damages and loss of life. During the blackout winds peaked at about 45mph and at the height of the state’s fire season, PG&E felt the blackouts were important.

Important — yes — but ultimately more of a failure than a savior.

PG&E CEO Bill Johnson admitted the company blackout scheme dropped the ball in bunches. The areas he pointed out ranged from poor planning to a website that failed spectacularly to maps that weren’t correct to call centers that were overwhelmed to — worst of all — a failure to provide its customers with resources to help them do without essential services.

“We were not adequately prepared to support the operational event,” Johnson said. “This will improve.”

His comments came after California Governor Gavin Newsom gave Johnson and his company scathing criticism over the poor planning of the blackouts. His criticism started with PG&E putting profits ahead of maintenance of its infrastructure — maintenance that would have made the firm’s towers more resistant to buffeting by high winds.

“This is not, from my perspective, a climate change story as much as a story about greed and mismanagement over the course of decades, neglect, a desire to advance not public safety, but profits,” the governor. “Over the course of years and years and years, the kind of hardening of the grid was not done. Those were decisions.”

From an insurance perspective and a business-loss perspective, the blackouts are costly. The economic impact could hit $2.6 billion. At least that’s the opinion of Michael Wara of the Stanford Woods Institute for the Environment. He said, “If one sums residential and small C&I [commercial and industrial] losses, the total is $2.5 billion in outage costs.”

Wara thinks the residential costs will be about $65 million.

He added that local, smaller businesses are often harder hit than bigger businesses. Larger companies have power generators and other resources that small businesses do not possess or can access.

Though the governor was highly critical of the PG&E blackouts, he did — ultimately — say they are necessary. “The reality is that we want to protect people. We want to make sure people are safe. This is what PG&E thinks is in the best interest of their customers and ultimately for this region and the state,” Newsom said.

Source links: Carrier Management, The Press Democrat, CNBC

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