WASHINGTON, DC—Resources for the Future (RFF) today released a new installment of Resources Radio: “The Economics of California’s Power Shutoffs, with Judson Boomhower.”
In this episode, host Daniel Raimi talks with Judson Boomhower, an assistant professor of economics at the University of California San Diego and a faculty research fellow at the National Bureau of Economic Research. Raimi and Boomhower discuss the recent public safety power shutoffs in northern California, the economic factors that contributed to the shutoffs, the economic impacts of the shutoffs, and how planned shutoffs may become increasingly common in the future. Boomhower offers unique expertise on many facets of the issue, including California’s electricity system, wildfire, and—crucially—the economics of liability.
Notable quotes from the podcast:
- “These outages are really interesting because they're basically the mirror image of the traditional problem that environmental economists are worried about with liability. We're usually worried that the company is going to go bankrupt, and that's going to allow them to avoid having to pay for the big bad thing that they caused. In this case, I think it's reasonable to be worried that maybe PG&E isn't fully accountable for the costs that they're creating.”―Judson Boomhower (16:44)
- “It's sort of obvious that this was an enormously disruptive few days, [but] it's a lot harder to put a number in terms of dollars on how disruptive it was … You can get like one or two billion dollars, which are some of the numbers that I've seen floating around out there. But honestly, I think we need a lot more work to really nail down exactly the right costs here.”―Judson Boomhower (12:30)
- “The thing that seems reasonable to me as an economist is that maybe this is a setting where we should be thinking about a little more direct government regulation. That's not always something you'll hear an economist say―we tend to be a little skeptical of direct regulation, but because of all the complicated incentive problems that exist for the utility, and for other individuals here, I think it's reasonable to at least think about a model where the public utility commission, or some other government body, actually has a more direct role in deciding when public safety power shutoffs should happen and should not happen.”―Judson Boomhower (25:36)
Resources Radio is a weekly podcast series exploring timely environmental, energy, and natural resources topics. Episodes can be found on Apple Podcasts, Google Play, SoundCloud, Spotify, and Stitcher.
Resources for the Future (RFF) is an independent, nonprofit research institution in Washington, DC. Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy.
Unless otherwise stated, the views expressed here are those of the individual authors and may differ from those of other RFF experts, its officers, or its directors. RFF does not take positions on specific legislative proposals.