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California firefighters on Friday are furiously trying to contain massive wildfires that have been tearing through the Los Angeles area since Thursday night. (SOUND BITE) (ENGLISH) LOS ANGELES FIRE CHIEF RALPH TERRAZAS: “In terms of fire activity, we’re at zero percent containment. The size right now is 4,700 acres-plus. We’ve calculated that the fire’s moving at a rate of 800 acres per hour.” The so-called Saddleridge fire has engulfed homes in the San Fernando Valley and forced massive evacuations, snarling traffic for miles. Some shelters are already at full capacity. No cause has been cited. Dry conditions and high winds a lethal combination in the days to come. (SOUND BITE) (ENGLISH) LOS ANGELES FIRE CHIEF RALPH TERRAZAS: “These weather conditions are significant in terms of brush threat. The relative humidity has dropped to as low as three percent. Right now it’s seven percent. The winds were sustained at about 20 to 25 miles per hour with gusts over 50 miles per hour. So as you can imagine the embers from the wind have been travelling a significant distance, which causes another fire to start.” Much of the state is on high alert, with utility company Pacific Gas & Electric cutting power in several areas to prevent their lines from sparking. That irked California Governor Gavin Newsom, who, while respecting the safety measure, described the outage as too broad and said it resulted from years of mismanagement. PG&E is on the hook for potentially $30 billion for previous wildfires linked to its transmission wires and other equipment. It filed for bankruptcy in January. Separately, another blaze called the Sandalwood fire is sweeping through an area east of L.A., triggered by burning trash in a dumpster. That fire was only 10 percent contained as of Friday morning.
California's recent power blackout episode triggered the strongest sales ever for BoxPower Inc., the maker of a turnkey solar power and battery unit in a box.
(Bloomberg) -- An unprecedented blackout that plunged millions of Californians into the darkness for days is over.And nobody can say when the next will hit.Even as PG&E Corp. declared an end to last week’s shutoffs -- a deliberate move to keep power lines from sparking the kind of blazes that forced the utility into bankruptcy -- the company warned that more will come. “It’s a future we must be ready for given the conditions and risks that we face,” Chief Executive Officer Bill Johnson said in a press conference with reporters.California still has six weeks left in its traditional wildfire season -- a time punctuated by dry, hot weather and high winds that have for years been the fuel for deadly and devastating blazes. While both PG&E and California state officials alike acknowledged that the shutoffs that began on Wednesday could have been better orchestrated (and with more communication), neither questioned their need.Climate change has made for more extreme conditions. In November 2018, a PG&E power line sparked the deadliest blaze in California history. And the year before that, a series of wildfires devastated the state’s wine country. That, state and company officials said, necessitates more extreme measures.By Friday, PG&E had restored power to 97% of those affected by the blackouts. On Sunday, 100% of customers had their lights back on. In all, roughly 738,000 homes and businesses went down in more than half of the state’s 58 counties. When they’ll go dark again is essentially Mother Nature’s call, Johnson said: “It really is weather-dependent -- where the wind is, where the conditions are.”Read More: Darkness, Frustration, Fire: Five Tumultuous Days in CaliforniaEven as the lights flickered back on, California firefighters were battling several infernos in Southern California. One that began in the hills north of the San Fernando Valley in the Los Angeles area -- now called the Saddleridge fire -- had burned about 8,000 acres as of Sunday and was less than 50% contained, destroying or damaging 32 structures. Another at the edge of the Sierra Nevada mountains had scorched more than 5,500 acres.“We are actively investigating the cause of the Saddleridge fire,” Nicholas Prange, a spokesman for the Los Angeles Fire Department, said by phone Sunday. “We haven’t determined anything yet. We take in any eyewitness reports and any evidence during the course of the investigation.”Sparks were seen at a transmission tower owned by Edison International’s Southern California Edison utility, local media reports cited eyewitnesses as saying. Prange said in response to queries on the eyewitness accounts that it would take at least a week for anything substantial to be determined.“Determining the cause and origin of the fire is a lengthy process,” Southern California Edison also said in a statement Sunday, confirming that it owns the tower identified in the reports as being near the start of the fire. “SCE will fully cooperate with investigations.”Southern California Edison also confirms that the transmission tower identified in local media reports as being near the start of the fire is theirs.In the course of inspecting lines following high winds, PG&E found 50 instances of weather-related damage to its system. “There’s some vindication -- that’s not the right word,” Johnson said late Friday, but the fact that the utility discovered so many safety issues that could have ignited a wildfire made the blackout well worth it, he said.One thing PG&E is promising going forward is better communication. For days, both ahead of the blackout and during it, the company’s website was down, overwhelmed by people trying to find out whether they would be cut off and for how long. Call centers were similarly flooded. Text messages to homes and businesses affected were few and far between.Read More: Dark Shops, Spotty Phones, Rotting Fish: Life in a Mass BlackoutThe operational act of turning off and on power actually “went really well,” Johnson said. But he committed to better notifications, more phone alerts, shorter call wait times and a website “that works no matter how much traffic is on it.”California officials will have their own say on what more should be done. Governor Gavin Newsom has blasted PG&E over the shutoffs, saying the company should have been more surgical -- and never would’ve been in this situation if it had invested in its infrastructure more heavily. He also called on state utility regulators to review PG&E’s actions.A spokeswoman for the California Public Utilities Commission said the agency, as a policy, reviewed all intentional outages by California utilities. PG&E said it will file a report with the agency detailing the damages it discovered.(Updates with latest data in seventh paragraph, LA fire department comment in eight and ninth paragraphs.)To contact the reporters on this story: Lynn Doan in San Francisco at firstname.lastname@example.org;Mark Chediak in San Francisco at email@example.com;Hailey Waller in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Lynn Doan at email@example.com, Kevin MillerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Electricity drives many legal grow operations and could irrevocably damage marijuana plants during harvest season. Following massive, deadly wildfires a year ago, while also dealing with bankruptcy negotiations, California utility company Pacific Gas & Electric decided to shut off power this week to avoid any more potential damage. Five out of the 10 most destructive wildfires in California history have been connected with PG&E’s electrical network, according to the New York Times.
“The NFL has really been obsessed with the integrity of the sport," the owner of the Jacksonville Jaguars said.
(Bloomberg) -- Californians have always lived in the shadow of calamity -- from earthquakes, mudslides, flooding, fires and droughts.But the move this week from the state’s largest power company represented a new type of burden: a widespread, intentional hardship designed to prevent something much worse.Facing a powerful windstorm, PG&E Corp. cut off power to wide swaths of California rather than risk its lines sparking a deadly wildfire like the ones that ravaged the state over the past two years and sent the company into bankruptcy. The outage hit 34 of the state’s 58 counties -- including the heavily populated San Francisco Bay area -- and led to backlash, frustration and confusion.Two of California’s smaller utilities to the south, Edison International’s Southern California Edison and Sempra Energy’s San Diego Gas & Electric, made a similar -- albeit more measured -- calculation. Over the course of three days, roughly 2.3 million people would lose electricity in the world’s fifth-largest economy.Here’s how the largest deliberate power outage in California’s history unfolded. (All times local.)Monday, 10:15 a.m.PG&E issues its first news release warning of a “fire weather watch” that may lead to power shutdowns in 29 counties, without saying how many customers may be affected. Until this time, the utility has largely deployed shutoffs in slices of the Napa Valley and along the foothills of the Sierra Nevada mountains, where it had just cut electricity over the weekend to about 10,000 customers due to windy conditions.Monday, 9:02 p.m.The size and scope of PG&E’s plans start to come into focus. The company says it may need to turn off the lights to more than 600,000 homes and businesses starting early Wednesday. The announcement includes dozens of cities in the San Francisco Bay area, such as Oakland, San Jose and Berkeley.“This is shaping up to be one of the most severe dry wind events we’ve seen in our territory in recent years,” Michael Lewis, senior vice president of electric operations, says in a statement.Tuesday, 10 a.m.As the news of potential outages spreads, Californians mobilize for what could be the largest planned blackout of its kind in history. State and local authorities ready their emergency operations centers. Residents rush out to snap up generators, flashlights, batteries, ice and bottled water, leaving hardware and grocery store shelves empty. Stanford professor Michael Wara calculates that a two-day outage could have an economic impact of about $2.6 billion.Tuesday, 1:36 p.m.PG&E confirms that it will shut off power for almost 800,000 customers in stages, starting just after midnight. Four new counties are added to its list, bringing the total to 34. It tells customers to prepare for an “extended outage.”The utility’s website is flooded with traffic and crashes, leaving residents frustrated and confused. Customers report having trouble reaching the utility’s call center.Tuesday, 3 p.m.Governor Gavin Newsom calls PG&E’s actions warranted while acknowledging the massive disruption the blackout represented.“No one is happy about it, no one is satisfied, but no one should be surprised, because we have been anticipating this moment for a year,” Newsom says at a bill-signing event in Oakland. The blackout “shows that PG&E finally woke up to their responsibility to keep people safe,” he says.State Senator Jerry Hill, a frequent PG&E critic, says the company went too far. “They need to spend the billions they’ve already received to harden the system,” he says at the event. “I think they’re in crisis and will do anything to prevent another wildfire.”Anger spreads among other politicians. State Senator Scott Wiener calls it a “completely unacceptable state of affairs.”Tuesday, 7 p.m.At the utility’s first press conference since the shutoff warning, PG&E representatives apologize for the problems with the company’s website and say they are working to address the issue. The company also says it is rushing to get generators to the California Department of Transportation so it can keep open a critical freeway tunnel that connects parts of the East Bay.Wednesday, 12:01 a.m.The first phase of the shutoff starts, affecting about 500,000 customers in more than 20 counties.Wednesday, 7 a.m.More than a million Californians wake up without power, including many in wine country. The website with outage information remains down. PG&E says the shutoffs will spread by noon to cities surrounding San Francisco, then later delays the second phase after wind patterns change.Wednesday, 2 p.m.Stores are shut in the counties hit by early outages. Safeway supermarkets bring in back-up generators and refrigerated trailers upon availability.At Sonoma County’s Russian River Brewing Company -- famed for its Pliny the Younger cult beer -- a 2-megawatt generator keeps the business running. The generator is too big, burning $8,000 to $10,000 of diesel per day. But nearby wineries had already snapped up all the smaller ones, says Russian River co-owner Natalie Cilurzo.In many areas without power, wind speeds have yet to pick up, leading to criticism the outage was unnecessary.“It’s a beautiful day here,” Cilurzo says. “We’re all kind of scratching our heads.”Napa Democrat Bill Dodd expresses a similar concern, saying “many of my constituents are disturbed that the power was shut down before the winds started to pick up.”Wednesday, 2:35 p.m.In the midst of the power tumult, PG&E is dealt a blow in its bankruptcy case. The judge overseeing the process issues a ruling that strips PG&E of its exclusive control over its reorganization, allowing bondholders and wildfire victims to offer a competing plan that all but wipes out current shareholders.Wednesday, 10:45 p.m.The blackout spreads to more densely populated parts of the Bay Area, including Oakland. With WiFi down, people flood LTE networks on their cell phones, crippling the systems and virtually killing access to cellular data for all within shutoff zones.Thursday, 2:30 a.m.Just hours after PG&E shuts off power to Moraga, an affluent rural town about 20 miles east of San Francisco, residents awake to police warning them to seek shelter at a local church. Despite the dead electrical lines, a wildfire has broken out.Roughly 140 homes are evacuated, and inoperable traffic lights create delays of an hour or more as cars clog the single-lane road leading out of town. The fire eventually is contained with no damage to houses.Thursday, 6 a.m.PG&E says it has restored power to 126,000 customers, easing fears that the blackout could drag on for days.As Wall Street trading opens, PG&E shares plunge more than 30% on concern that the bankruptcy judge’s ruling could lead to a total wipeout for shareholders. Analysts warn the stock could fall to zero.Meanwhile, Bay Area residents awaken to darkness and adjust to disrupted routines. In Oakland, a doughnut shop serves doughnuts but no coffee. Credit card machines are down, so patrons pay with cash only.At a clearly powerless sushi restaurant, a man begins unloading a box of fresh tuna to deliver. “They ordered it,” he shrugs.Thursday, 10 a.m.The normally bustling University of California, Berkeley, is nearly devoid of students, with classes canceled due to the blackout. Just north of campus, a strip of shops and restaurants still has power, but closes anyway.“There is no business,” says Ray Woo, owner of the TC Garden restaurant next to the university. “Nobody is coming. There aren’t any students.”Thursday, 11:55 a.m.A small wildfire is spotted beneath a PG&E transmission line on a steep ridge just south of San Francisco. It is quickly contained, and firefighters don’t announce a cause.Thursday, 5 p.m.Newsom blasts PG&E’s handling of the shutoff. He blames the outage on the utility’s “greed and mismanagement” and calls for a “major reorganization” of the company. But while the governor says future planned blackouts must be more surgical, he defends the practice itself, saying it could have saved lives during last year’s deadly Camp Fire if PG&E had chosen to do it then.Thursday, 6 p.m.In his first public statements since the outage began, PG&E Chief Executive Officer Bill Johnson apologizes for the way the company handled its communication of the shutoffs.“This isn’t how we want to serve you,” he says. “We are in the business of providing power. Not taking it away.”Johnson says the company made a determination that the blackouts were necessary for safety reasons, to ensure “zero risk” of sparks.Thursday, 9:40 p.m.A brush fire pops up on the northern edge of Los Angeles, and fanned by strong winds, starts marching westward. The Saddleridge fire soon closes a portion of the Interstate 5 freeway into the city and nears the Aliso Canyon natural gas storage facility, site in 2015 of the largest gas leak in U.S. history.Lights are starting to come back on in the Bay Area. Around 11 p.m., PG&E says it has restored power to more than half of the 738,000 customers who lost it, including all in the northernmost counties the company serves.Friday 1 p.m.The Saddleridge swells to 7,542 acres, forcing the evacuation of 23,000 homes. At least 25 structures have burned, and one civilian suffered a heart attack, dying at the hospital. Fire officials say they’re investigating reports of sparks flying from a transformer at the start of the blaze.Friday 6 p.m.PG&E says only 84,000 customers remain without power. It aims to have service restored to almost all homes and businesses by early Saturday.The outages may not have been in vain: The utility said it found 30 instances where tree branches had fallen on its power lines or knocked them down.“There’s some vindication -- that’s not the right word -- the fact that there were 30 plus things that could’ve caused a fire and didn’t,” made the blackout worth it, Johnson says.Saturday, 2 p.m.PG&E says it’s restored power to 99.5% its customers affected as of 1 p.m.About 735,000 customers in California had power restored within 48 hours after getting the all clear earlier in the week, Sumeet Singh, vice president of the community wildfire safety program at the utility, said in a press conference on its social media platforms. About 2,500 are still without power in the state, he added.The utility also said it found 50 cases of damage or hazard, up from 30 the day before.\--With assistance from Lizette Chapman, Lynn Doan, Jeffrey Taylor and Hailey Waller.To contact the reporters on this story: David R. Baker in San Francisco at firstname.lastname@example.org;Mark Chediak in San Francisco at email@example.comTo contact the editors responsible for this story: Lynn Doan at firstname.lastname@example.org, Kara WetzelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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PG&E; ended a rough week with reports that it had rejected San Francisco's offer to buy the utility's wires in the city for $2.5 billion.
"Today's ratings affirmation follows Pattern's announcement that it will issue $260 million of perpetual preferred stock to partly fund the acquisition of ownership-interests in two Canadian wind farms, 50% in the Henvey Inlet (Ontario) and 51% in the Grady (New Mexico) projects for a total purchase price of nearly $368 million using USD to CAD exchange rate of $1.30. This total price includes Pattern's purchase of a C$97 million loan that is repayable by the Nigig Power Corporation. "Pattern's planned use of available excess cash to fund the rest of the price considerations drives our expectation that the company's consolidated debt to EBITDA run-rate will remain around 8x based on P(90) wind resource projections and applying proportional consolidation, including Pattern's 29% interest in Pattern Development", added Martel.
It's part of California's new normal - year-round fire seasons, planned electricity blackouts and, for retired couple Bhagvei and Paresh Badreshia, sudden evacuations in the middle of the night. The evacuations in Southern California came after the state's largest utility, Pacific Gas and Electric Co. (PG&E) , switched off the power to nearly 800,000 homes and businesses in northern and central California to prevent its transmission lines from sparking wildfires under gusting dry winds. It was the second time in less than four years the Badreshias have been forced by an emergency to flee their home in Porter Ranch, a plush suburb where some scenes for the 1982 movie "E.T. the Extra-Terrestrial" were filmed.
PG&E Corp rejected a $2.5 billion offer from San Francisco to buy the bankrupt Californian company's power lines and other infrastructure within the city, calling the offer inadequate. The offer significantly undervalued the assets and a deal would not be in the best interest of the company's customers, PG&E's chief executive officer, Bill Johnson, wrote in a letter to San Francisco Mayor London Breed and City Attorney Dennis Herrera. The company's financing strategy to emerge from bankruptcy did not include selling off company assets, Johnson said in the letter, which was dated Oct. 7.
(Bloomberg) -- PG&E Corp. rejected a $2.5 billion offer from San Francisco to buy the bankrupt utility giant’s wires within the city’s limits.San Francisco’s offer significantly undervalues the company’s assets and a deal wouldn’t be in the best interests of its customers, PG&E Chief Executive Officer Bill Johnson said in an Oct. 7 letter to Mayor London Breed. He went on to say the company doesn’t need to sell its businesses to finance a restructuring and emerge from bankruptcy.“We cannot accept your offer,” Johnson said in the letter. “If we ever do consider such sales, we have a duty to obtain the highest and best value for these assets.”San Francisco has framed its takeover bid as a way for PG&E to raise money and help cover an estimated $30 billion in liabilities tied to devastating wildfires that its equipment ignited in 2017 and 2018. The damages from those blazes are what forced the company in January to enter the biggest utility bankruptcy in U.S. history. Now, the company has found itself competing with the likes of Pacific Investment Management Co. and activist investor Elliott Management Corp. over a restructuring plan.PG&E has proposed a reorganization that would allow existing shareholders to preserve some of their stake in the company. The plan creditors led by Pimco and Elliott are pushing would all but wipe out current investors. The company’s shares were virtually unchanged in after-markets trading.Not SurprisedSan Francisco officials said they weren’t deterred by the brush-off from PG&E.“We aren’t surprised by PG&E’s response so far,” the mayor and City Attorney Dennis Herrera said in a statement. “We’re also not giving up. Now more than ever, it is clear that we must take back control of San Francisco’s electric service and achieve energy independence.”State Senator Scott Wiener, a San Francisco Democrat who has backed a deal, said the rejection wasn’t surprising but that supporters will continue to press for one in bankruptcy court. “We’re not going to give up,” he said by telephone. “Bankruptcy is an unpredictable process and we’ll see what happens.”Wiener said he was also looking at what could be done to move a deal forward on the state level. He declined to provide details.‘Not So Welcome’While California’s investor-owned utilities have traditionally held a lot of sway in Sacramento, PG&E is “not so welcome and powerful anymore,” Wiener said.This week, the utility orchestrated the biggest preemptive blackout in state history to keep its power lines from starting wildfires amid high winds. The shutoffs drew outrage from homeowners and businesses, leading Governor Gavin Newsom to publicly blast PG&E for years of “greed and mismanagement.”“PG&E’s performance in general, and in particular with this massive blackout, has shifted the politics,” Wiener said. “More and more people understand that it’s not up to the task.”(Updates with city’s comment in seventh paragraph.)To contact the reporters on this story: Mark Chediak in San Francisco at email@example.com;Romy Varghese in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Lynn Doan at email@example.com, ;Elizabeth Campbell at firstname.lastname@example.org, Michael HythaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Shepard Smith, the chief news anchor of Fox News and a sometime critic of U.S. President Donald Trump, abruptly quit the network on Friday after 23 years. In an unexpected on-air statement at the end of his daily "Shepard Smith Reporting" show, Smith said he had asked to leave the conservative-leaning cable news network, which is the most-watched in the United States. "Recently I asked the company to allow me to leave Fox News.
Shepard Smith, whose newscast on Fox News Channel seemed increasingly an outlier on a network dominated by supporters of President Trump, abruptly quit after working at Fox since it started in 1996. Smith said at the end of his daily newscast on Friday that he had asked the network to let him out of his contract and it had agreed. Neil Cavuto, who anchors the broadcast following Smith’s, looked shocked after the announcement.
Wildfire risks have led the embattled California utility PG&E to order a preemptive electric grid shutdown, leaving more than 2 million at risk of losing power.
Shepard Smith, chief news anchor and breaking new managing editor at fox, will leave the network, Fox News Media said on Friday. "Recently I asked the company to allow me to leave Fox News. Under our agreement, I won't be reporting elsewhere, at least in the near future," Smith said on his Friday show.
The mayor of Cloverdale California says plenty of people blame troubled utility PG&E for recent blackouts but they should blame the California Public Utilities Commission.
HOUSTON/NEW YORK/LONDON (Reuters) - Rates to charter oil tankers from the Arab Gulf, United Kingdom and the U.S. Gulf Coast to Asia surged to fresh highs on Friday as global oil traders grappled with a tanker shortage in the aftermath of U.S. sanctions on units of Chinese giant COSCO. Occidental Petroleum Corp tentatively chartered a supertanker to ship U.S. crude from the U.S. Gulf Coast to Asia for a record $15.8 million this week, three sources said on Friday. Royal Dutch Shell chartered the Suezmax vessel Amoureux this week for $9.2 million to ship crude from Teesport, U.K. to Dalian, China in early November, according to a shipping source and Refinitiv Eikon data.
(Bloomberg) -- Faced with mounting public anger over massive blackouts, California Governor Gavin Newsom blasted PG&E Corp. for years of “greed and mismanagement” as the bankrupt utility restored power to more than half those left in the dark.Newsom’s comments came as many PG&E customers questioned whether it overreacted to a windstorm that didn’t prove as powerful in Northern California as forecast. The company cut electricity to more than 2 million people -- the largest preemptive blackout in the state’s history -- to prevent its power lines from sparking wildfires.The Democratic governor, who on Wednesday called the blackouts “appropriate under the circumstances,” took a dramatically harsher tone Thursday, blaming PG&E for not hardening its grid and saying the outage was the result of years of bad choices. His comments came just before PG&E’s chief executive officer made his first public appearance since the blackout began, apologizing to customers for the “hardship” the power failures have caused while defending the decision.“It’s decisions that were not made that have led to this moment in PG&E’s history,” Newsom said at a Thursday evening press conference. “This is not, from my perspective, a climate change story as much as a story about greed and mismanagement, over the course of decades.”By Friday morning, the company had restored service to nearly 60% of the 738,000 homes and businesses affected, according to a statement. Workers are now inspecting thousands of miles of transmission lines to make sure they are safe to transmit power.READ MORE: Dark Shops, Spotty Phones, Rotting Fish: Life in a Mass BlackoutThe violent winds, meanwhile, are ebbing in Northern California. Still, fire risk remains high in much of the southern half of the state, with strong winds and humidity “about as low as it can go,” said Marc Chenard, a senior branch forecaster with the U.S. Weather Prediction Center.About 6,000 square miles of Southern California face extreme fire conditions Friday, including San Bernardino, Fontana and Thousand Oaks, the U.S. Storm Prediction Center said. Edison International’s Southern California Edison utility has cut power to more than 21,000 homes and businesses but warns outages could eventually impact another 223,000. Sempra Energy’s San Diego Gas & Electric Co. cut power to about 400 customers.Illustrating the danger, a fire erupted late Thursday on the northern edge of Los Angeles. By morning, the wind-driven flames forced the evacuation of 25,000 homes and threatened California’s largest natural gas storage facility, Aliso Canyon, site of the biggest gas leak in U.S. history in 2015. The blaze’s cause hasn’t been determined.For more, listen to this mini-podcast on California’s wildfire blackouts.As PG&E worked to restore power, its shares took a beating on Wall Street Thursday, falling 29% after the utility was stripped of exclusive control over its bankruptcy process and a judge allowed competing plans from wildfire victims and bondholders to advance. The stock bounced back a bit Friday, gaining 1.1% at 2:11 p.m. in New York.Newsom said he wanted to see a “major reorganization of this entity” and said PG&E was too large to move quickly. But the governor stopped short of saying what kind of structural changes he preferred. He suggested the company needed to be far more surgical about future outages, saying some counties didn’t need to be included in this week’s blackouts. He acknowledged, however that such preemptive power cuts should remain an option for the state’s utilities when faced with dangerous winds.PG&E, he noted, made a decision last November not to cut power near the town of Paradise during a windstorm. A transmission line then sparked the Camp Fire, the state’s deadliest blaze, which killed 86 people.“Zero risk”Newsom called on California utility regulators to review PG&E’s actions. A spokeswoman for the California Public Utilities Commission said the agency, as a policy, reviewed all intentional outages by California utilities.PG&E filed for bankruptcy in January, facing an estimated $30 billion in liabilities from two consecutive years of deadly wildfires blamed on its equipment.CEO Bill Johnson, who took over in May, said the company made a determination that the blackouts were necessary for safety reasons, to ensure “zero risk” of sparks. He told reporters at a San Francisco press conference that started an hour after the governor’s that it’s “very likely” the company will need to cut power again in the future. Johnson said the utility will try to be more “surgical” about shutoffs.‘We Failed’The main failure was in communicating with customers about the outages, company officials said. Johnson said the utility posted outage maps with inconsistent or inaccurate information, its website crashed and its call center was overwhelmed. “We failed our customers,” said Laurie Giammona, senior vice president and chief customer officer for PG&E.Johnson asked local residents not to take their frustrations out on PG&E workers, saying some employees had been shot at, punched and sworn at.“The buck stops with me,” he said.(Adds outage detail in seventh paragraph. An earlier version corrected a quote in the headline, first and fourth paragraphs.)\--With assistance from Brian K. Sullivan, Samuel Dodge and Christopher Palmeri.To contact the reporters on this story: David R. Baker in San Francisco at email@example.com;Mark Chediak in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Lynn Doan at email@example.com, Joe Ryan, Joe RichterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The unforeseen power outages in California show that economists could be badly underestimating the potential costs of climate change.
Where was Bill Johnson? Despite the utility enduring a four-day, self-inflicted power crisis gripping the whole Bay Area, the CEO of PG&E did not appear on the evening news. It wasn't until late Thursday evening that the CEO stepped up to a podium and took responsibility for the outage, just as the utility was preparing to begin the arduous task of turning the lights back on.
(Bloomberg) -- PG&E Corp. is teaching an unpleasant lesson to Wall Street equity traders who counted on utilities as a safe haven.Investors rattled by trade wars and hints of a recession drove PG&E shares as much as 2.8% higher on Wednesday even as the utility was cutting power to millions of customers across California. That faith proved misplaced a day later as the stock crashed almost 32% after an unfavorable ruling in the company’s bankruptcy proceedings.The whipsaw illustrates both the allure of utility stocks and the danger of blindly investing in them as a class. With big, stable revenues and limited exposure to international trade, the companies represent an investment tailor-made for the current moment. And yet while customers are unlikely to stop buying their products no matter the state of the economy, individual firms still face their own, specific risks.“You may cut back on your electricity use during a recession, but you’re still going to use electricity,” said Paul Patterson, an analyst at Glenrock Associates. “It’s not a discretionary item.” But “utilities can fall dramatically in value, individually,” he said.The Standard & Poor’s utilities index has risen 21% this year and hit an all-time high last month. Individual utility owners such as Southern Co. and Dominion Energy Inc. are also trading at record highs. The gauge was little changed at 12:37 p.m. in New York.Timothy Winter, who helps manage over $30 billion at Gabelli Funds LLC as an associate portfolio manager, says the rise in utility stocks has been driven by the industry’s ability to increase earnings on a sustainable basis amid massive infrastructure investments. About 10% of funds managed by Gabelli are invested in utilities, and Winter says a new fund is being planned for investments in green energy alternatives.Strong Fundamentals“Fundamentals are stronger than they have ever been -- that is because earnings and dividends are growing stronger than they have ever grown before on a sustainable basis,” Winter said. “Many of us in the industry are calling it the golden era of the utilities.”The broader stock market has substantially outperformed the sector since the 1980s, but utilities have consistently offered slow and steady returns over the years. The industry has “solid growth prospects,” and global utilities remain undervalued, Jean-Hugues De Lamaze, senior portfolio manager at Tortoise Advisors UK in London, said.Still, risks abound, as illustrated by PG&E. The company’s latest stock collapse was sparked by a bankruptcy court judge ruling that its bondholders could submit their own reorganization plans for the company, potentially wiping out shareholders. The company had already slumped over 75% over the past year after wildfires its equipment caused saddled the utility with $30 billion in liabilities. The shares were up 5.8% on Friday.The company is carrying out the largest blackout ever orchestrated in California to prevent electrical lines igniting wildfires during a period of high winds. The unprecedented power shutdown has ensnared millions of people, many in the San Francisco Bay area, and raised the prospect that much of a major metropolitan area could go days without electricity.For more, listen to this mini-podcast on California’s wildfire blackouts.Utility HeadwindsIt’s not just PG&E that faces headwinds. Dominion and Duke Energy Corp., for example, back a $7.5 billion gas pipeline project that has been tied up in court. Southern is still working on a $28 billion nuclear plant expansion -- the only such project in the U.S.If interest rates start rising again, some of the money now flowing into utility stocks could shift to bonds instead, according to Andy Smith, utilities analyst for Edward Jones. However, it’s possible the market has entered an extended period of higher valuations for utility stocks, rather than a short-term spike, he said.“I don’t see anything bringing them back down, other than interest rates,” Smith said.(Updates with utility index move in fifth paragraph.)To contact the reporters on this story: David R. Baker in San Francisco at firstname.lastname@example.org;Gerson Freitas Jr. in São Paulo at email@example.comTo contact the editors responsible for this story: Lynn Doan at firstname.lastname@example.org, Pratish Narayanan, Reg GaleFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.