FirstFT: California warns of power outages

Good morning.

A blistering heatwave has pushed California’s electricity demand to record highs, prompting the state’s governor to extend emergency actions until the end of the week to reduce power consumption and bring more energy online.

Gavin Newsom said the heatwave was on track to set a record for September, putting a strain on the energy grid and raising the threat of blackouts.

“We’re heading to the worst part of this heatwave and the risk for outages is real,” he said, recommending that residents “precool” homes early in the day when more power is available and turn thermostats up after 4pm to reduce the load during the peak evening period.

The California Independent System Operator, which co-ordinates the flow of electricity across most of the state, forecast power use hit a new all-time high late yesterday.

Caiso said that it ultimately avoided a blackout. “Conservation is making a difference,” the operator wrote on Twitter.

The warning comes days into a heatwave that is baking much of the western US. Temperatures reached above 43C in the interior of California on Tuesday and records were set to be broken in many locations before gradually decreasing later in the week, according to the National Weather Service.

Thank you for reading FirstFT Americas. Here is the rest of the day’s news — Gordon

Five more stories in the news

1. Exclusive: Microsoft invests in Travis Kalanick’s CloudKitchens Microsoft is the first US-based investor in Uber known to have backed CloudKitchens, the “dark kitchen” start-up run by the ride-hailing company’s co-founder Travis Kalanick, according to two people with knowledge of the investment.

2. Top Fed official warns rates must stay high In an interview with the Financial Times, Thomas Barkin, president of the Federal Reserve’s Richmond branch, said the US central bank must lift interest rates to a level that restrained economic activity and keep them there until policymakers were “convinced” that rampant inflation was subsidizing .

3. Argentina pledges to help ease global food and energy shortages Argentina, a natural resource powerhouse, has pledged to help ease global food and energy shortages by boosting oil and gas production and incentivizing exports of grain from the country, according to economy minister Sergio Massa. The offer comes as Vladimir Putin threatened to turn away from a deal that allowed the export of agricultural products from Ukraine’s Black Sea ports to resume.

4. Liz Truss vows Britain will ride out ‘the storm’ Liz Truss dodged torrential rain outside Downing Street to say she would create an “aspiration nation” in her first speech as prime minister. Within minutes of entering Number 10 she appointed loyalists to the top jobs in her cabinet and began finalizing the details of an energy relief package that is expected to cost up to £150bn. Joe Biden warned the new PM not to rip up Britain’s deal with the EU over trading arrangements for Northern Ireland.

5. EU’s windfall taxes to counter ‘astronomical’ energy bills Brussels is pushing for national windfall taxes on energy companies to counter what European Commission president Ursula von der Leyen described as “astronomical” energy bills. The proposed levies would target fossil fuel producers and low-carbon power generators that have reaped extra profits thanks to artificially inflated electricity prices.

The day ahead

Canadian interest rate decision Canada’s central bank is expected to raise its benchmark interest rate 0.75 percentage points to 3.25 per cent at its policy meeting today, according to economists polled by Refinitiv. Figures are also expected to confirm that Canada’s trade balance widened in July.

Federal Reserve Vice-chair Lael Brainard will speak about monetary policy at the Clearing House and Bank Policy Institute’s annual conference. The central bank’s vice-chair for supervision, Michael Barr, will speak about making the financial system fairer and safer at the Hutchins Center on Fiscal & Monetary Policy at the Brookings Institution. Loretta Mester and Thomas Barkin, the presidents of the Cleveland and Richmond branches of the Fed respectively, are also scheduled to speak at events this morning. The Fed will also publish its report of economic conditions today, known as the Beige Book.

Company earnings Investors will be focused on how video game retailer Gamestop has fared at a time when the gaming industry is dealing with several adverse trends. Retailer American Eagle Outfitters, software company Asana, and restaurant and entertainment business Dave & Buster’s are all reporting today as well.

Apple iPhone14 launched Apple holds its annual product launch event at its headquarters in California today. The tech company is expected to unveil the latest iteration of its iPhone as well as new versions of the Apple Watch and AirPods. Our live blog will be covering the event.

What else are we reading and listening to

How Starbucks became an American punch bag Everybody hates Starbucks. The left, the right, even some of its millions of customers. Now it finds itself squarely in the crosshairs of America’s culture wars and economic struggles, writes Brooke Masters.

Europe can — and must — win the energy war How Europe responds to this crisis will shape its immediate and longer-term future, writes Martin Wolf. It must resist Putin’s blackmail. It must adjust, co-operate and endure. That is the heart of the matter.

Biden was right to ring the alarm for democracy True, the mise-en-scène of Joe Biden’s speech in Philadelphia last week, with its flanking US Marines, was weird, writes Janan Ganesh. It did not create a divide. It acknowledged one that already exists. He says the alternative — exhorting national unity — has been tested to destruction.

Bolsonaro deploys evangelical wife in Brazil’s presidential race Michelle Bolsonaro, the 40-year-old third wife of Brazil’s president, has emerged as an asset in his re-election campaign as he attempts to galvanize evangelicals and appeal to women.

A skeptic’s guide to crypto Even after the crypto markets crashed this year, there are still people who believe there is a future for digital assets and blockchain technology. FT columnist and avowed crypto sceptic Jemima Kelly is not so sure. In season 4 of Tech Tonic, she takes a trip deep into cryptoland to hear from critics, converts and hardcore believers.

Gaming

Kill time and zombies at four of Tokyo’s most exciting game centers. From retro-tastic classics to mind-blowing VR adventures — via good old pinball machines — every gaming taste is catered for on this FT Globetrotter list.