Small C&I Customers Losing Estimated Billions from Planned CA Outages

(Photo: Mobile generators at a shopping center in Northern California on October 10, 2019. Credit: @adep on Twitter)

Losses for small commercial and industrial customers in the areas of California experiencing planned PG&E power outages could total nearly $2.5 billion, according to calculations by a Stanford University expert.

Michael Wara directs the Climate and Energy Policy Program at Stanford University, and is a senior research scholar at the Woods Institute for the Environment. This week, as PG&E began shutting off power to around 800,000 customers in phases to avoid sparking wildfires during windy, dry conditions, Wara ran the numbers.

Using the Interruption Cost Estimate (ICE) Calculator tool developed by the Electricity Markets & Policy Group at Berkeley Lab, Wara says he modified PG&E’s 2018 System Average Interruption Frequency Index (SAIFI) and System Average Interruption Duration Index (SAIDI) to reflect 48 hours of sustained blackout for 800,000 customers.

Wara excluded large C&I customers because the areas being blacked out are suburban and rural, and also steep terrain, he explained on Twitter. “If one sums residential and small C&I losses, the total is $2.5 billion in outage costs. If one assumes only residential customer impact, $65 million,” he wrote, adding that the total depends on which customers experience blackouts.

He also estimated that a public safety power shutoff (PSPS) for a representative 600,000 accounts that lasted just 24 hours would cause $1.8 billion in costs.

“I think the lesson here is that the biggest economic losses involve business interruption and we just don’t know the details of how much of that will occur,” Wara wrote. “And of course, the actual PSPS may affect more or less customers than this and be shorter or longer than 48 hours. Time will tell.”

A spokesman for PG&E told the Enterprise-Record that customers affected by the planned power shut-offs aren’t eligible to have revenue losses reimbursed through the utility’s Safety Net program, but they could still try submitting a claim.

Despite the planned outages, the Los Angeles Times and Associated Press reported on Thursday that brush fires had ignited throughout the region. One that began south of San Francisco was in a low fire danger zone where power hadn’t been turned off, a PG&E spokesperson told the Times.

Southern California Edison also cut power to around 13,000 customers in Central and Southern California counties on Thursday due to spiking dry winds, the Washington Post reported.

Several small business owners in Orinda told journalists from the Post that they might not make their rent due to the blackouts.