Pacific Gas & Electric (PGE), beset with lawsuits stemming from the fires it created last year from downed power lines, has come up with an innovative strategy to prevent further lawsuits – cut power to households that it deems to be a risk when high winds threaten to cause the next big fire in California. PGE revealed last week, that it cannot prevent the next fire from its power lines sparking the next wildfire and it is resorting to cutting power to as much 1/8th of all the households in California for as long as five days, when it deems that dangerously high winds can create the next big wildfire and could shut the doors on this grossly mismanaged utility.
This plan, as convoluted as it sounds, is an admission by the California’s largest utility that it cannot satisfy its job of delivering electricity safely and reliably. As if to rub salt into the wounds of the customers, PGE further stated that it would not compensate customers for losses suffered during the intentional blackouts. Furthermore, PGE stated that these blackouts could go on forever and there is no timeline to strengthen its power lines to be fire resistant and trim trees in fire prone areas.
Future Wealth View
Almost everything about PGE smells bad. The utility charges way too much, is badly managed, and despite being a publicly listed company, has little regard to its shareholders. Even its own convoluted solar initiative, which is largely misplaced ‘coz the very idea of going solar is to get rid of reliance on the utility, has put consumers in a bind – by forcing customers who go solar to feed the power to the PGE grid, instead of powering their household directly.
And then, there is uncomfortable topic of its stock performance – utilities have always been the safest investments, until a company named PG&E, plunged the utility sector into volatility seen only in the high technology sector. PGE stock has whipsawed in the past 6 months as it teetered and finally filed for chapter 11 bankruptcy and then, came up with “Einstein” like plan to prevent future wildfires.
There is really little reason for PGE to be a public utility anymore. If it was not for the tens of billions of losses it incurred from the wildfire, Amazon would have gladly picked up this company up and figured out a way to, not just control your doorbell, thermostat, Alexa and TV, but also the power and the wifi that feeds those devices. While blackouts, if they were to happen, could destroy food and perishables, can anyone in California handle Alexa cutting off and saying “I am having trouble connecting”?