California blackouts latest pitfall for Newsom in prime wildfire season

Politico Politics 1 day ago

SAN FRANCISCO — California Gov. Gavin Newsom in his first 10 months has faced a barrage of legal challenges from the White House, the anger of anti-vaccine protesters, intense pressure to solve homelessness and the threat of catastrophic wildfires.

But over the last four days, he has confronted the type of treacherous scenario that has taken down one past California governor — and threatens Newsom's status as a rising national star in the Democratic party, say some West Coast political insiders.

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Massive power outages by Pacific Gas and Electric — the state’s largest investor-owned utility — plunged upwards of two million Californians into the dark, in some cases for days, fueling public outrage, snarling traffic, closing schools and jobs and possibly contributing to the death of at least one elderly man who lost power to his medical device.

The massive outages were aimed at containing the danger of wildfires, and after some state bureaucrats suggested that residents may have to accept them as a way of life in sun-baked California, Newsom on Thursday delivered a scathing rebuke — and its audience was as much the utility’s management as it was angry state voters. Though Newsom is a leading advocate of climate change legislation, his terse message was that the outages not be tolerated as “the new normal.”

“This is not a climate change story as much as a story about greed and mismanagement over the course of decades. Neglect, a desire to advance not public safety but profits,” a visibly angry Newsom said during a press conference. “What has occurred in the last 48 hours is unacceptable. ... We’re seeing the scale and scope of something no state in the 21st century should experience.”

California is just entering the worst stretch of fire season after months of dry heat have desiccated brush and foliage across the state and fall winds have begun to rush through with such ferocity they have their own names, Diablo in the north and Santa Ana in the south. If this week's outages were a guide, PG&E will be risk averse this fire season as it winds its way out of bankruptcy, erring on the side of shutting off power across vast regions rather than risking another deadly catastrophe.

There is little on the ground that Newsom, regulators and utilities can do now to fireproof the next windstorm. Some had thoughts in January that California and PG&E could trim every tree along every power line in the utility's sprawling Northern and Central California territory, including a federal judge who asked for that plan at the start of the year. It went nowhere fast after PG&E said that would cost as much as $150 billion and a fivefold increase in utility bills.

With economists estimating that this week's outages could represent a $2 billion hit to the state’s economy, some political observers say that Newsom’s public fury was late in coming — after the blackouts, euphemistically dubbed “de-energization” by the utility, had already taken their toll on millions of lives and state businesses.

They're warning that if Newsom doesn’t take aggressive steps to avoid a repeat of this week’s scenario, he may have to deal with the impacts on his own political future — and voters’ wrath at the polls. The fire season comes as Newsom's poll numbers are flagging, with just 43 percent of likely voters approving of the governor compared to 44 percent who disapprove, according to a Public Policy of California poll released last week.

“I’ve seen this movie before,’’ said Garry South, the veteran Democratic strategist who served as senior adviser to former Gov. Gray Davis when the state experienced an energy crisis in 2000 and 2001.

Rolling blackouts struck California after Enron, merchant generators and other power brokers gamed the state's newly deregulated system. Davis and California political leaders “were actually victims of it,’’ South contends.

Even if Davis and other leaders blamed others, the public held those at the top accountable. The state's degregulated market was so complicated that many policymakers couldn't understand it, let alone average voters. They saw their power going off because of man-made activities and demanded answers.

“In this case, the difference is PG&E is the villain," South said. "...It’s decades of arrogance and lack of investment in infrastructure.”

The energy crisis wasn't the only thing that led to Davis' demise — he was re-elected in 2002, after all. But it laid the groundwork for public frustration that led to his ouster, when combined with other factors such as budget woes and higher car taxes, and the 2003 recall election brought Republican Arnold Schwarzenegger to power.

Loretta Lynch served as president of the Public Utilities Commission, the state’s regulatory agency, during the rolling blackouts. She said that Newsom needs to be tougher on PG&E, but fears that state leaders already have thrown in their lot with the utility by enacting legislation that would help reduce the company's future liabilities from wildfires.

“I had a real problem with his PG&E bailout bill in the summer. ... They’ve already gotten in bed with PG&E, and now it’s hard to get out of bed,’’ Lynch warned.

“The problem now is it’s been more than six months — and Gavin owns the PUC — and what the PUC has been doing,’’ says Lynch. “At some point, the regulator has to use a stick, and not a carrot. PG&E has been cut too much slack, period, by the regulator..and he controls the regulator.”

Newsom's stern press conference may have been an effort at damage control in a week in which, some critics suggested, the governor appeared slow to acknowledge the depths of public concern and anger about the widespread effects of outages.

Facing a hard deadline to sign hundreds of bills, the California governor on Tuesday in Oakland starred at an event with a crowd of legislators to tout his signing of key housing bills — just hours before the lights would go out on hundreds of thousands of nervous Californians, including those in the Bay Area where he held court. Newsom wanted to talk housing but was instead pummeled with press questions about the outages.

The next day, with more than 1 million residents already having lost power, Newsom continued with his scheduled housing tour, heading to Southern California to tout bills such as one making it easier to build in-law units. During a bill-signing ceremony in San Diego, the governor, who owns wineries, said of the blackouts, "We're in the middle of wine crush, folks are trying to run around to get generators right now, in the middle of crush. It's very consequential." To some, the comment struck an out-of-touch note as residents dealt with spoiled food and closed schools throughout the day.

By Thursday, anger intensified as residents entered their second day without power. Newsom late that afternoon hastily called his own press conference in front of a backdrop of weather maps, fire footage and other monitors at the state Office of Emergency Services. He was there to blister PG&E — with a laser focus on “an identifiable villain” in the greed of the utility, South said. And talk of "the new normal" was angrily dismissed: “You could see that he had figured that out.”

Political strategist Nathan Ballard, who has advised Newsom since his days as a San Francisco supervisor, said the California governor is keenly aware of the political pitfalls as he attempts to navigate dangerous waters while the major investor-owned utility grapples with bankruptcy.

“There’s a long history with Gavin and PG&E, going back to when he was mayor and you had exploding manhole covers in town,’’ notes Ballard, who has himself in the past advised the utility. But long experience shows “there’s three ways to deal with PG&E: You can be an opponent, like (Democratic State Senator) Jerry Hill. You can play along with them and never speak up — which many legislators choose to do,’’ he said.

“Or you can take the route of Gavin and (Rep.) Jackie Speier, which is to call them out when they do something wrong — push for reform and never let up on the gas, and never stop putting pressure on them to do the right thing.”

Newsom firmly believes that last route is the most prudent, given “the devastating impact that the breakup of this company would have on the state,’’ Ballard says.

Veteran California crisis communications expert Larry Kamer agrees that at this point, “fortunately for Gavin, PG&E is still 100 times the villain that he is.”

Kamer says that in a solidly blue state like California, the odds of real political danger for Newsom appear remote now. But he warns nothing can be taken for granted in California politics.

He says Newsom’s move to push back hard on the utility — and the suggestion that this may be “the new normal” — is smart, because Californians of all political stripes will bridle at a “third world” scenario in which regular interruptions of their businesses and lives may be a normal occurrence.

“A call to Gray Davis right now wouldn’t be a bad idea,’’ he advises. Because back in 2003, “’all the oily rags were in the room, and you never thought someone would throw the match...but all of a sudden, you have Arnold. A political conflagration like this can get out of control. “

The ultimate test, Lynch says, is if Newsom marshals the tools he needs to use — now — to guarantee that doesn’t happen.

Job One for California's Democratic governor must now be “to have all hands on deck” to stay in control — and to reassure the public that “the state of California is a watchdog, not a lapdog” of the utility, Lynch says.

"If you let PG&E decide how to do it," she argues, "they will do it in the way that’s best for PG&E."


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