Life is full of unpleasant choices, but we soft moderns rarely face decisions as thoroughly disagreeable as the one that now confronts the residents of California.
First option: They can keep the lights on, knowing that doing so in the current hot, dry winds risks sparking more of the wildfires that have destroyed billions of dollars worth of property and taken many lives in recent years. They can also pay for the damage done by those fires, either in their capacity as taxpayers or in their role as consumers of electricity.
Second option: They can turn the lights off, which would starve one of the most economically vibrant regions of the United States of the most basic requirement of modern commerce; catapult hundreds of thousands, even millions of homeowners backward toward the 19th century; and risk the lives of vulnerable elderly and disabled people.
Third option: Californians can pony up more than a quarter of a trillion dollars to bury the power lines that have sparked so many fires. Burying the 81,000 miles of overhead lines for just one utility, Pacific Gas & Electric, is estimated to cost something like $240 billion, roughly $15,000 per customer, and yet would remove only one of the many sources of wildfire risk.
There are variations, of course, such as safety enhancements that stop short of burying all the power lines. But these are the three basic choices: live with the risk, pay a lot of money to abate it or suffer periodic blackouts. They’re all bad.
Yet of the three, it seems obvious that rolling blackouts are the worst option. A home that doesn’t have reliable access to electricity is, for most people, functionally uninhabitable, so continuing blackouts on the scale we’ve recently seen would temporarily dispossess Californians of their homes in much larger numbers than the threat from wildfires. Moreover, if people do stay in their homes, they will turn to candles and generators, which are even more likely to spark a fire than a power line. Even without the fire risk, prolonged lack of electricity can be deadly for anyone who needs refrigeration for medicines or electricity for lifesaving devices.
Nonetheless, somehow, this is what California chose — by trying hard not to make any choice at all.
Liability for wildfires is handled through the California courts under a peculiar state doctrine known as “inverse condemnation,” which holds utilities and state agencies liable for damage caused by their operations even if they weren’t negligent. These massive liabilities have imposed massive losses on PG&E, the state’s biggest power company, which is in bankruptcy. This means that California’s ratepayers are ultimately on the hook for the cost, since it sure can’t come out of the company’s nonexistent profits.
But California’s ratepayers like to imagine that someone else can pay the bill — someone richer than themselves, such as the chief executive of PG&E, whose admittedly lavish salary would not quite cover the cost of burying one mile’s worth of transmission lines, out of its roughly 81,000 miles of overhead wires crisscrossing the state. Or perhaps the utilities’ investors and creditors — though California will shortly need those people to put in even more investment if the state is to meet its ambitious goals to reach 100 percent renewable energy by 2045. But someone, anyway. Certainly not them, Joe Average, already struggling with California’s absurdly high cost of living.
The ratepayers are nurtured in this fantasy by California politicians, particularly Gov. Gavin Newsom (D), who reacted to this crisis by ranting about the “greed” of the utilities — as if said utilities were not tightly regulated by the California Public Utilities Commission, which sets rates, determines allowable profit margins and minutely scrutinizes proposed expenditures. In 2017, the commission refused to let San Diego Gas & Electric raise rates to cover its liability for wildfires that took place in 2007, which is why utilities are now terrified of any risk, however small, that their equipment might start a fire.
Undoubtedly, utilities could do better on safety. But without burying the lines, there’s no way to eliminate fire risk entirely, because California is basically a giant naturally occurring tinderbox; one of the largest fires last year was started by a rancher hammering a spike into the ground. It’s hard to see how even the best-run utility in the world could afford to keep the power flowing during California’s scorched and windy weather, and its even more arid legal and political climate.
California politicians keep trying to evade that reality, pretending that there aren’t hard choices to be made, and that the power to make those choices belongs to someone else. As long as they keep up the pretense, they’ll end up with exactly the result they least want.