California Blackout Risk Spurs Diesel Demand for Generators

Employees load a Champion Power Equipment generator onto a cart in a Home Depot Inc. store in Hercules, Calif. (David Paul Morris/Bloomberg News)

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Diesel demand in California is soaring as the risk of blackouts in the state spurs big power users to load up on fuel for generators.

Hospitals, data centers and other major energy consumers are buying up increasingly scarce diesel supplies to prepare for possible power outages, according to local fuel distributors. That’s likely to push prices for the fuel even higher in the state even as the national average continues to fall.

California diesel inventories are already at the lowest level since November 2019, while West Coast supplies are at the lowest seasonal level in a decade. The buying spree comes as the state endures a record-breaking heat wave that’s pushed the electricity system to the brink. California on Sept. 7 declared another power-grid emergency after managing to avoid rolling blackouts on Sept. 5 and Sept. 6.

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