Tale of two utilities is a cautionary one
Massive blackouts show PG&E lagging far behind San Diego power company
Utilities in both Northern and Southern California faced the same problem last week: how to keep power lines from sparking wildfires in the ferocious winds that were forecast to roar across tinder-dry lands in their areas.
But while PG&E, the state’s largest utility, shut off power to an estimated 2.5 million people, causing massive disruptions to homes, businesses and schools, San Diego Gas & Electric cut the power to only about 65,000 people.
A big reason for the difference, experts say, is that the San Diego company has spent the past decade modernizing its power grid and focusing relentlessly on reducing fire risk, while PG&E has lagged.
“San Diego has been a leader. Are we reading about them in the papers because of their failures? We haven’t been,” said Robert McCullough, a veteran energy consultant in Portland, Oregon, and adjunct professor of economics at Portland State University.
“PG&E has trailed behind,” he said. “They are a company that should be a leader, and they are a follower.”
Over the past decade, San Diego Gas & Electric has buried 10,000 miles of power lines: 60% of its lines are underground. It was the first big California utility to shut off power during extreme fire-risk days. It has hired five meteorologists, built 190 weather stations, replaced 18,000 wooden power poles with stronger steel poles, put up more than 100 cameras on mountain
tops, and brought in two state-of-the-art firefighting helicopters to drop water when fires start near its lines.
The company also has insulated its power lines and rewired its electrical grid so that when power needs to be shut off for fire danger — a technique called sectionalization — it can surgically cut power to just a few dozen homes in the most dangerous areas rather than blacking out hundreds of thousands of homes, as PG&E did.
And now San Diego Gas & Electric is going further: The utility is installing wireless sensors called synchophasers on its power lines so that when they fail, they can be automatically turned off before hitting the ground and starting fires.
“We’re taking a very proactive approach to addressing wildfire,” said Robert Iezza, a spokesman for San Diego Gas & Electric. “We’ve been trying to get ahead of it.”
To be sure, the company did not make all the changes — which have cost at least $1.5 billion, with customers charged the highest rates of California’s three big utilities — out of the goodness of its heart. It did it for selfpreservation.
In October 2007, sparks from San Diego Gas & Electric’s power lines caused three huge blazes — the Witch, Guejito and Rice fires. Those fires burned 207,000 acres in San Diego County, killed two people, injured 40 firefighters and destroyed 1,347 homes. About 900,000 people were evacuated. And after the fires, the utility faced $5.6 billion in liabilities and was hit with 2,500 lawsuits from people who suffered damages.
Alarmed, company executives decided they needed a new focus on fire safety.
“They saw a future where PG&E is now, where they are bankrupt and the governor is holding press conferences to yell at them,” said Michael Wara, director of the Climate and Energy Policy Program at Stanford University. “They took evasive action.”
Both PG&E and San Diego Gas & Electric are more than 100 years old. Both are private, for-profit companies regulated by the state Public Utilities Commission. But there are differences between them.
PG&E’s service area is much larger. It extends 70,000 square miles from Bakersfield to the Oregon border. By comparison, San Diego Gas & Electric covers just 4,100 square miles across San Diego and southern Orange counties. PG&E also has many more people in its area, with 16 million residents, compared with 3.6 million for San Diego. And it has more forests, which pose a unique hazard after California’s five-year drought killed more than 100 million trees.
Nevertheless, PG&E officials are trying to learn from their colleagues to the south.
“San Diego is greatly different from what we have here in PGE’s service area. It’s apples and oranges,” said Mayra Tostado, a spokeswoman for PG&E. “We can’t directly apply the experiences of SDG&E to our unique service area, but we have worked with them to discuss public safety power shutoffs and other changes they have done to harden their electric system.”
She noted that PG&E plans to spend $2.3 billion in the next few years trimming trees, strengthening power poles, installing weather stations and cameras, and making other upgrades.
Many are asking why the Public Utilities Commission, made up of five people appointed by the governor, didn’t force PG&E to make the same improvements that San Diego Gas & Electric chose to make.
Catherine Sandoval, who was a PUC commissioner from 2011 to 2017, said that under state law, utilities are required to run a safe system, so the impetus was on PG&E.
“Legally, the responsibility for operation of the grid is with the utility,” said Sandoval, now a law professor at Santa Clara University. “The PUC is not the grid operator.”
McCullough agreed that “it’s not the PUC’s job to run the utility,” adding that PG&E is too big and should be broken up into a system of regional public utilities.
“It’s easy for us to point at them now, but this is squarely on the PG&E management’s back,” he said.
Activists say that view ignores the need for regulatory oversight.
“That philosophy is completely wrong,” said Diane Conklin, a San Diego activist who has pushed utilities to improve fire safety for the past 20 years. “We are substituting the judgment of a corporate entity that is arranged to make profit and saying, ‘You guys are responsible for our safety.’ That is wrong. Taxpayers look to the PUC to regulate the utilities.”
There are other reasons that the PUC didn’t crack down on PG&E. Former Gov. Gray Davis named Michael Peevey, the former president of Southern California Edison and a person widely criticized as too cozy with the industry, as PUC chairman, and former Govs. Arnold Schwarzenegger and Jerry Brown let him stay in that office until 2014.
Meanwhile, as San Diego Gas & Electric was proposing major upgrades to its electricity system, a PG&E gas line exploded in San Bruno in 2010, killing eight people and leveling 38 houses. For years afterward, the focus of the PUC and PG&E was primarily on the company’s gas system and poor record-keeping, with less attention to its power lines and wildfire risk.
And during those years, PG&E’s equipment was not responsible for starting a major fire in Northern California. That changed in 2015, when the utility’s lines sparked the Butte Fire in Amador County, killing two people, destroying 475 houses and burning 70,000 acres. PG&E also argued a decade ago that the PUC didn’t have the legal authority to regulate its power lines for wildfire risk.
Now, Sandoval said a “Marshall Plan” is needed to rapidly upgrade PG&E’s system. Funding could include state bonds, money PG&E pays in penalties from fires, and other sources, she said.
“To replicate what San Diego has is going to cost many, many billions,” she said. “Maybe it’s worth it. But you are going to end up with much higher rates.”
One thing is clear. There is enormous political pressure on PG&E, the PUC and Gov. Gavin Newsom to solve the problem.
“PG&E may or may not be able to figure this out,” Newsom said Friday. “If they cannot, we are not going to sit around and be passive. We are gaming out a backup plan if PG&E is unable to secure its own fate and future.”