Law Would Limit Planned Black Outs

(From Press Release – Senator Wiener) – Today, Senator Scott Wiener (D-San Francisco) introduced new legislation to limit utility blackouts and help protect residents, businesses, and medical and public safety facilities. Sponsored by the City of San Jose and Mayor Sam Liccardo, SB 378 puts in place reasonable, commonsense mechanisms to ensure that utilities are pursuing planned blackouts with adequate prudence, that utilities aren’t knee-jerk shutting off power to eliminate liability risk, and that the negative consequences of blackouts on local communities are minimized.

In the age of increasing wildfire risk, utilities are beginning to authorize increased numbers of planned blackouts in rural, suburban, and even urban communities in order to eliminate the risk that the utility’s power lines and other equipment will ignite a fire. These planned blackouts, also known as “de-energization events” and “Public Safety Power Shutoffs” usually occur during a period of elevated fire risk—such as when wind speeds are unusually high—and can last for days on end. Used judiciously, these blackouts can be a valuable tool in preventing catastrophic wildfires. The public can see some of the blackouts taking place in real time here.

Unfortunately, while this arrangement allows utilities to avoid liability for wildfires their faulty equipment would have otherwise caused, and may reduce fire risk in some circumstances, it also creates massive safety risks for those who rely on a regular supply of electricity. Small businesses that store refrigerated food, people that that rely on rechargeable oxygen tanks and other medical equipment, and infants and seniors trying to survive the summer heat—to name a few—all need a steady supply of electricity to survive and prosper.

Yet, despite the clear public safety issues on both sides of the power blackout issue, utilities have a powerful profit incentive to err significantly on the side of shutting off power. The purpose
of SB 378 is to align financial incentives so that utilities only shut off the power when it actually is necessary.

“As wildfires become more common, utilities must act in the best interest of the entire community they serve,” said Senator Wiener. “Utilities now have a strong financial incentive to err on the side of blackouts – even when they aren’t necessary –  and very little incentive to avoid large blackouts. A utility, with as little as 24 hours notice, can announce a blackout that can last up to a week, even if the risk of fire is minimal. These blackouts can have devastating impacts on vulnerable seniors, people with health problems, businesses, and public safety agencies. This legislation is about striking the right balance to ensure utilities don’t overlook the negative impacts to residents, businesses, and communities.”

“I am thankful to Senator Wiener for his leadership in pushing to add transparency — and government oversight — to large-scale power shutdowns by private utilities,” said San Jose Mayor Sam Liccardo. “Extended blackouts can have catastrophic safety and health impacts to our communities, and our residents and businesses want utilities’ decision-making to be accountable to the public, not shareholders.”

Under current law, utilities have a significant incentive to avoid liability by shutting off power lines during periods of perceived fire risk, even if the risk is minimal.  There is little incentive, however, to keep the lights on when that risk is minimal, to avoid the immense disruption that even a brief planned blackout can cause. As a result, utilities have become increasingly over-zealous in announcing planned blackouts.  Compounding matters, a utility can unilaterally announce a blackout, with no approval needed from the Office of Emergency Services, Public Advocates Office, local governments, or any other entity that might be in a position to confirm that the benefits truly outweigh the costs.  As the number of planned blackouts continues to increase, reform is needed to make sure that lack of electricity does not affect California’s economy and way of life.

“We appreciate Senator Weiner’s thoughtful leadership to address the safety and economic consequences of de-energization power outages,” said Lance Hastings, President and CEO for the California Manufacturers & Technology Association. “We cannot accept these kind of power outages as the new normal. California has the fifth largest economy in the world, and we must strive for a better solution than just shutting off power when it is windy and hot. This legislation starts an important dialogue about prioritizing community safety, power reliability and affordability. We stand ready to work with Senator Weiner and appropriate stakeholders for a solution that benefits all Californians.”

SB 378 puts in place reasonable reforms to both help prevent and mitigate the impact of planned blackouts moving forward. Specifically, this measure will:

• Require that the California Public Utilities Commission create a process by which businesses, individuals, and local governments can recover costs accrued during a planned blackout (for example, by damaging equipment turned off too quickly) from the utility within two weeks, and require that utility shareholders – not ratepayers – are responsible for these costs.
• Promote better collection of data on utility equipment in order to assess risk level beforehand, as well as require reporting on the consequences of planned blackouts after the fact.
• Level hourly fines on utilities during planned blackouts, and ensure that customers cannot be billed for transmission, distribution, and other costs during a planned blackout, in addition to a stipulation that a utility cannot profit from a planned blackout (through changing electricity prices and the like).
• Prevent utilities from spending ratepayer funds to oppose formation of new municipal utilities, distributed energy resource initiatives, or any other attempt to offer consumers increased energy choice and more reliable options, similar to prohibitions already in place regarding CCA formation.

Through these new policies, SB 378 will ensure that utilities prioritize vital infrastructure upgrades and safety measures over the convenience of simply shutting off power. Together, these reforms will guarantee that planned blackouts are judicious, targeted, and rare.

SB 378 was officially introduced on September 6.  It will be set for a hearing in January 2020.

Full text of the bill can be found here.

Categories:

Tags: