It will be “California Dreamin'” as in dreaming of electricity for a number of Northern California residents as utility group PG&E Corp is cutting electricity in order to minimize the risk of wildfires. This could put leveraged energy funds in play for savvy investors who may sense an opportunity.

Per a Bloomberg report, “on Wednesday, utility PG&E Corp. began cutting electricity to almost 800,000 California homes and businesses — representing roughly 2.4 million people — to prevent wildfires as high winds are forecast to whip through the state. The outages will hit 34 counties, including much of the San Francisco Bay area, triggering a scramble by residents to prepare for what may be days without power.”

“This is unprecedented in terms of what all of us are facing as a community,” PG&E Vice President Sumeet Singh said at a media briefing Tuesday night. “We are doing everything we can to minimize the impact on our customers’ lives.”

According to the report, the shutoff will happen in three phases, according to a company statement. Of course, this latest development won’t be good news to a number of Californians.

“No one is happy about it, no one is satisfied, but no one should be surprised, because we have been anticipating this moment for a year,” said California governor Gavin Newsom. The blackout, he said, “shows that PG&E finally woke up to their responsibility to keep people safe.”

For a broad, un-leveraged utilities play, investors can check out the Utilities Select Sector SPDR (NYSEArca: XLU). XLU seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Utilities Select Sector Index, which includes securities of companies from the following industries: electric utilities; water utilities; multi-utilities; independent power and renewable electricity producers; and gas utilities.

Leveraged Opportunities

Funds to consider are the Direxion Daily Energy Bull 3X Shares (NYSEArca: ERX) for bullish plays and the Direxion Daily Energy Bear 3X Shares (ERY) for bearish opportunities should they arise.

Fund features:

  • ERX seeks daily investment results equal to 300% of the daily performance of the Energy Select Sector Index. The index is provided by S&P Dow Jones Indices and includes domestic companies from the energy sector which includes the following industries: oil, gas and consumable fuels; and energy equipment and services.
  • On the other end of the spectrum, ERY seeks daily investment results that equate to 300% of the inverse of the daily performance of the Energy Select Sector Index. The index is provided by S&P Dow Jones Indices and includes domestic companies from the energy sector which includes the following industries: oil, gas and consumable fuels; and energy equipment and services.

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