By Katherine Blunt
PG&E Corp.'s plan to pre-emptively turn off power in parts
of California to limit wildfire risks is creating business
opportunities for alternative energy companies that say they can
keep the lights on.
Home solar, battery and fuel cell providers including Tesla Inc.
and Bloom Energy Corp. are targeting customers in Northern
California and appealing to state regulators to boost incentives
for the rollout of their technology. While some acknowledge that
new energy projects aren't a universal solution to controlled
blackouts, they are using PG&E's struggles to highlight
alternative possibilities.
PG&E has said it would selectively pull the plug in an area
home to 5.4 million people for as long as five days when hot, dry
winds sweep its service territory, heightening the risk of its
power lines sparking more fires. State investigators tied its
equipment to 19 major wildfires in 2017 and 2018, and the company
sought bankruptcy protection in January, citing more than $30
billion in potential liability costs.
Companies seeking to capitalize on PG&E's strategy say it is
too early to quantify its effect on business but expect interest to
increase as the blackouts become more frequent.
Rooftop solar company Sunrun Inc., based in San Francisco,
anticipates a slow but steady increase in the adoption of its solar
and storage products. More than 40% of the company's customers live
in California, and it is advertising in high-risk fire areas, where
PG&E has warned residents to prepare for dayslong outages,
Sunrun Chief Executive Lynn Jurich said.
"It's going to be a very good long-term tailwind for the
business," Ms. Jurich said.
In an article on its website, Sunrun points to PG&E's
strategy as a reason to install solar and battery systems. It also
has asked PG&E to feature those options in its communications
with customers about purchasing backup generation in preparation
for potential outages.
PG&E isn't the only California utility with plans to cut
power as a means of stemming wildfire risk, but it is the only one
to propose doing so on such a large scale. Edison International's
Southern California Edison and Sempra Energy's San Diego Gas &
Electric have both deployed the strategy in parts of their service
territories in recent years. As a result, many utility customers
have already sought to outfit their homes and businesses with
generators, which typically run on propane, natural gas or diesel
fuel.
Now, clean energy companies are touting their products as
greener, more advanced options. Batteries such as those offered by
Tesla and Sunrun have been slow to catch on in California's
residential solar market, in part because they are relatively
costly. But the companies say they have seen an uptick in interest
in recent months.
Justin Montague, 37 years old, decided to install Tesla solar
panels and batteries called Powerwalls at his home north of
Calistoga, Calif., earlier this year, after receiving a letter from
PG&E warning that he could be without power for days this
wildfire season.
He and his wife had weathered that once before, when the utility
cut power to his home as part of its first pre-emptive blackout
last October. The company's decision left several small communities
in the dark for about two days and Mr. Montague said it forced him,
his wife and their children, ages 5 and 2, to seek refuge in a
hotel about an hour away in Santa Rosa.
To prevent a repeat of that experience, he opted to purchase the
solar and battery system for about $54,000, partially offset by a
federal tax credit. He anticipates the system will pay for itself
in a matter of years and keep the electricity and air conditioning
running in the event of a blackout.
"We just can't function without that," he said. "With two little
kids and the temperatures up here, how are you supposed to
live?"
Bloom Energy, which supplies fuel cells powered by natural gas
and biogas to companies such as Alphabet Inc.'s Google and Adobe
Inc., is pitching a different solution primarily aimed at large
businesses in need of round-the-clock power for data and
manufacturing centers. The company's fuel cells, which hook into
the natural-gas pipeline system, can operate as islands of
electricity when the surrounding area goes dark.
"We have never dealt with the paradigm of days' worth of
outages," said Bloom Energy CEO KR Sridhar.
Tesla, Sunrun and Bloom have asked the California Public
Utilities Commission to expand a state incentive program for
individually generated power technology.
Tesla, which said it has been fielding more interest in its
solar and battery systems, told the CPUC in May that expanding the
program could help the state "grapple with the extraordinary
challenges associated with California wildfires."
In late May, PG&E weighed in, acknowledging that batteries
and other sources of power generation could "help address
California's most pressing issue, wildfire resiliency." It
recommended that regulators adopt extra incentives for utility
customers most vulnerable to the effects of a pre-emptive
shut-off.
PG&E pulled the plug for the first time this year in June,
blacking out 22,000 customers in wine country and the Sierra Nevada
foothills after the National Weather Service issued a red-flag
warning signaling high fire danger.
Bloom, which went public last year, recently appealed to
business owners with a post on its website warning them that they
could be next in line for a shut-off.
"How would you keep your business running if you had no
electricity for five days or more?" it read. "That's a question
every California business leader should be thinking about."
Write to Katherine Blunt at Katherine.Blunt@wsj.com
(END) Dow Jones Newswires
July 15, 2019 08:34 ET (12:34 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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