600 Miles and Counting: PG&E Hits Significant Milestone as Crews Safely Complete Construction, Energization of 350 More Miles of Underground Powerlines in 2023

Rhea-AI Summary

Pacific Gas and Electric Company (PG&E) has constructed and energized more than 600 miles of underground powerlines since its ambitious 10,000-Mile Undergrounding program started in mid-2021. The 350 miles completed in 2023 represents the most ever in a single year by PG&E and nearly twice as many miles as were completed in 2022. The unit cost has now fallen below $3 million per mile, eliminating nearly 98% of the risk of wildfire ignition from electrical equipment. The California Public Utilities Commission recently approved PG&E's 2023-2026 General Rate Case, which authorized 1,230 miles of undergrounding during those four years.

Positive

• PG&E has completed 350 miles of underground powerlines in 2023, the most ever in a single year by the company.
• The unit cost for the undergrounding program has fallen below $3 million per mile, reducing nearly 98% of the risk of wildfire ignition from electrical equipment.
• The California Public Utilities Commission approved PG&E's 2023-2026 General Rate Case, authorizing 1,230 miles of undergrounding during those four years.

Negative

• None.

Insights

Energy Sector Analyst

The initiative by Pacific Gas and Electric Company (PG&E) to underground more than 600 miles of powerlines is a strategic move aimed at mitigating wildfire risks, which have been a significant concern in California. The reduction in unit cost from $4 million to below $3 million per mile represents not only an operational efficiency but also a financial prudence that could positively affect the company's capital expenditure and long-term profitability.

This project's success could potentially lead to increased investor confidence due to the company's forward-thinking approach to risk management. However, investors should also be aware of the substantial upfront costs and consider the time frame for the return on investment given the scale of infrastructure projects. The approval by the California Public Utilities Commission for the 2023-2026 General Rate Case suggests regulatory support, which is crucial for utility companies that operate within strict regulatory frameworks.

Risk Management Consultant

PG&E's aggressive undergrounding program reflects a proactive approach to risk management, particularly in addressing the escalating threat of wildfires. By reducing the wildfire risk by 98% in the affected areas, PG&E is not only protecting its physical assets but also mitigating potential liability and insurance costs associated with wildfire damages. Long-term, this could lead to more stable insurance premiums and reduced legal risks.

Stakeholders should note the importance of such infrastructure investments in the context of climate change and increasingly frequent natural disasters. While the benefits are clear, the execution of such a large-scale project carries its own risks, including potential cost overruns, project delays and regulatory hurdles. Stakeholders must balance these considerations when evaluating PG&E's strategic direction.

Environmental and Sustainability Expert

The environmental implications of PG&E's undergrounding program are significant. Beyond the immediate reduction in wildfire risk, there are broader considerations such as the impact on the local ecosystem during the construction phase and the potential for reduced greenhouse gas emissions if the initiative leads to fewer wildfires. Investors with an interest in sustainable and environmentally responsible practices should view this positively.

It is also important to consider the sustainability of such projects. The use of materials and the long-term environmental footprint associated with maintaining underground infrastructure should be weighed against the immediate benefits. The company's commitment to a 10-Year Undergrounding Plan signals a long-term strategy that aligns with broader environmental goals, potentially bolstering PG&E's reputation as an environmentally conscious utility provider.

Customers in 20 Counties Now Being Served and Protected by Buried Lines, Reducing 98% of the Wildfire Risk in Those Locations

OAKLAND, Calif., Dec. 20, 2023 /PRNewswire/ -- As of this week, Pacific Gas and Electric Company (PG&E) has constructed and energized more than 600 miles of underground powerlines since its ambitious 10,000-Mile Undergrounding program started in mid-2021.

And the 350 miles completed in 2023 represents the most ever in a single year by PG&E and nearly twice as many miles as were completed in 2022.

"Our customers in high fire-risk locations where we have undergrounded powerlines not only benefit from wildfire mitigation, but also improved reliability at the lowest cost over the asset lifecycle," said Peter Kenny, PG&E's senior vice president of Major Infrastructure Delivery, which includes the 10,000-mile Undergrounding program. "That progress will continue in the years ahead."

From $4 million per mile when the program first started, PG&E targeted cost reductions to $3.3 million per mile by this year. In fact, the unit cost has now fallen below $3 million per mile.

Eliminating risk with layers of protection

Undergrounding eliminates nearly 98% of the risk of wildfire ignition from electrical equipment. And it's one of many layers of wildfire protection from PG&E, ranging from 600-plus weather stations and high-def cameras with AI capability for early fire detection to safety shutoff programs that prevent ignitions that could lead to catastrophic wildfires.

The Undergrounding program was launched in June 2021 by PG&E CEO Patti Poppe. PG&E and contract crews completed 73 miles that year, 180 miles in 2022 and 350 miles this year.

The California Public Utilities Commission recently approved PG&E's 2023-2026 General Rate Case, which authorized 1,230 miles of undergrounding during those four years. PG&E is evaluating the GRC decision and creating the specific work plans for 2024 and beyond. Also, by mid-year, PG&E will file its 10-Year Undergrounding Plan, which was enabled by the passage of SB 884.

Here's how the process works. Using sophisticated modeling, PG&E identifies the circuits with the highest wildfire risk. After engineering and permitting are completed, the most time- and labor-intensive part of the process—digging trenches and installing conduit, the piping that securely holds the electric lines in place—begins.

Once the civil construction work is complete, electric crews arrive to pull powerlines through the conduit, make the necessary electrical connections, de-energize the overhead lines and energize the underground lines. Final steps include removing the overhead lines and poles in some cases, and then completing paving and other work to return the surrounding area to a condition as good as or better than before the construction.

In recent months, on average, PG&E energized about 20 miles of undergrounded line each week. In all, customers on circuits in 20 counties now benefit from underground powerlines, extending from Trinity and Shasta counties in the north to Fresno County in the south.

Multiple benefits from undergrounding

Investing in undergrounding in the highest fire-risk areas benefits all PG&E customers in several ways—from improved air and water quality resulting from fewer fires; protection of wildlands; and over the long run, lower costs to customers due to reduced maintenance and vegetation management costs.

Expanding PG&E's electric system underground in High Fire-Risk Areas (HFRAs) will not only help reduce wildfires caused by utility equipment, but also will improve reliability and reduce the need for safety-related power outages.

Go to www.pge.com/undergrounding to see PG&E's progress and learn more about this crucial safety program.

Note to media: B-roll is available upon request

About PG&E
Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE:PCG), is a combined natural gas and electric utility serving more than 16 million people across 70,000 square miles in Northern and Central California. For more information, visit pge.com and pge.com/news.

 

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SOURCE Pacific Gas and Electric Company

FAQ

How many miles of underground powerlines has PG&E constructed since the start of the 10,000-Mile Undergrounding program in mid-2021?

PG&E has constructed and energized more than 600 miles of underground powerlines.

What is the unit cost for the undergrounding program?

The unit cost has now fallen below $3 million per mile.

What percentage of risk of wildfire ignition from electrical equipment is eliminated by undergrounding?

Undergrounding eliminates nearly 98% of the risk of wildfire ignition from electrical equipment.

What did the California Public Utilities Commission approve for PG&E's 2023-2026 General Rate Case?

The California Public Utilities Commission approved 1,230 miles of undergrounding during those four years.