PG&E Bankruptcy Filing: the New Cost of Preparedness
I read a great article in the New York Times today that used the PG&E bankruptcy filing as a case in point to illustrate the high costs of climate change, and it was definitely eye-opening. I generally view the Earth’s warming trend through an emergency preparedness lens, because as you know, warmer global temperatures lead to more volatile weather. But according to the article, the increasing frequency of outages might be the least of our concerns.
How the PG&E Bankruptcy Filing is Symptomatic of a Larger Issue
The main problem for PG&E – as well California electric utilities in general – is that the warming temperatures have caused a spike in forest fires, wreaking havoc on the infrastructure. In fact, according to the company, “prolonged drought and higher temperatures will triple the frequency of wildfires,” which is problematic since the company is struggling mightily to keep up with the current frequency.
Obviously, it’s not just forest fires that are of concern – everything from flooding to mudslides to hurricanes will become more frequent and severe. Sooner or later, ALL utilities will bear some of the cost of climate change. And in my opinion, it should be sooner because, as they say, “prevention is with an ounce of cure.”
As the PG&E bankruptcy filing illustrates, there is a lot at stake, so it is important to get ahead of the curve. For example, had PG&E initiated a plan to gradually bury its wires decades ago, the company would have been better off in the long run. Yes, hindsight is 20/20, but the point is that preventative measures must be taken now, before it’s too late.
The new, higher cost of utility emergency preparedness is a mix of storm hardening efforts and increased training in the form of exercises and drills. Customers will feel the pinch too, as much or most of these incremental costs will eventually be baked into rates. But the bottom line is that utilities need to make this a priority NOW, and not wait until its too late. The fact that we are actually witnessing a PG&E bankruptcy should serve as a wakeup call.
