The unprecedented power shutdown by California’s PG&E Corp. has spread deeper into cities near San Francisco, ensnaring millions of people and raising the prospect that much of a major metropolitan area could go days without electricity.
The bankrupt utility began a second round of power cuts overnight, bringing the number of darkened homes and businesses to around 750,000. It’s the largest intentional blackout ever orchestrated in the state to prevent high winds from knocking down electrical lines and igniting wildfires. The economic impact may reach $2.6 billion.
As it grapples with outages, PG&E is being hammered on Wall Street. Its shares plunged as much as 32% Thursday over a ruling in its Chapter 11 case threatens to puts the company’s fate into the hands of bondholders and others proposing reorganization plans that could wipe out holdings of existing shareholders.
After being forced into bankruptcy from wildfires its equipment caused over the past two years, PG&E is using the massive power cuts in an attempt to prevent another deadly disaster. While San Francisco and most of Silicon Valley will be spared, the extensive reach of the outages in Oakland, San Jose and elsewhere threatens to roil the area’s economy by disrupting workers, shutting stores and forcing companies and agencies to shell out for costly back-up generators to keep operations limping along.
In Southern California, Edison International was cutting power to dozens of customers and has warned of more, while San Diego’s main utility is also considering shutoffs. Altogether, more than 3 million people may eventually be affected, or almost 8% of the state’s population, based on city estimates and the average household size.
Determining just how deep the impact will be is difficult. PG&E had already restored power to some 50,000 customers in the Sierra Nevada foothills as of late Wednesday and was looking to return service to 80,000 by Thursday morning, the company said in its statement, released around 11 p.m. local time Wednesday. But outages could persist into next week as the utility sends crews to inspect all of its lines. Santa Clara County warned a shutoff could last seven days.
Parts of Northern California’s East and South Bays were set to lose power later in the evening under the second phase. After that, PG&E will weigh a third round of cuts for portions of Kern County, which may affect about 4,000 customers. The utility earlier predicted impact to 43,000.
PG&E initially estimated it could cut power to even more customers, as many as 800,000. Southern California Edison has warned it may need to turn off power to nearly 174,000 customers, including about 50,000 in Los Angeles County, due to an increased fire risk.
A prolonged blackout will strain the region’s economy, said Michael Wara, director of the Climate and Energy Policy Program at Stanford University. Blackouts lasting hours or a single day close offices and schools, and prompt runs on grocery stores. At five days, cupboards start running bare, diesel for backup generators start selling out and gasoline runs short as stations won’t have power.
“If you lose power for five hours, you may have to throw out some milk,” Wara said. “If you lose power for five days, you need to throw anything that’s perishable away, and you are likely eating out of a can.”
Running on Generators
In areas where electricity was already out early Wednesday, many stores and businesses sat closed, while others worked off back-up power. Wells Fargo shuttered some branches. A few dozen Safeway supermarkets were affected as of midday, and the company was providing backup generators and refrigerated trailers upon availability.
For wineries, the blackout hit at a crucial time: harvest. Michael Haney, executive director of Sonoma County Vintners, said many wineries have either bought or rented backup generators. Some smaller growers have struck agreements to have their grapes stored at other facilities where there’s power.
“Wineries have had to pay out money for backup power,” he said. “The sad thing is some of our smaller wineries can’t afford it.”
The region’s main commuter rail system — Bay Area Rapid Transit, or BART — expected no disruption, in part because the service had already deployed generators, some from PG&E, to vulnerable spots.
The widespread impact angered Californians — and some elected officials. State Senator Scott Wiener, a San Francisco Democrat, called the outage “a completely unacceptable state of affairs.” Governor Gavin Newsom was more measured, saying the blackout was “appropriate under the circumstances,” but added: “No one is happy about it.”
–With assistance from Romy Varghese, Matthew Boyle, Kurt Wagner, Nico Grant and Christopher Palmeri.