To Meet the Evolving Needs of its 16 Million Customers, PG&E Proposes Critical Investments to Reduce Wildfire Risk, Enhance Energy System Safety and Reliability, and Deliver More Clean Energy for California

Rhea-AI Summary

Pacific Gas and Electric Company (PCG) has proposed crucial safety and clean energy investments as part of its 2023 General Rate Case (GRC) aimed at serving 16 million customers. The proposal includes approximately $7.4 billion in investments from 2023-2026 focused on wildfire safety, gas system reliability, and clean energy expansion. Key initiatives include hardening power lines, investing in electric vehicle infrastructure, and enhancing grid resilience. If approved, customer bills may increase by around 5% annually. The GRC aims to reduce wildfire risks and improve overall service.

Positive

• Proposal includes $7.4 billion in investments for safety and clean energy from 2023-2026.
• Focus on wildfire safety measures, including hardening power lines and undergrounding installations.
• Significant clean energy investments, including EV infrastructure and battery energy storage.
• Plans to enhance grid resilience through community microgrid projects.

Negative

• Proposed customer bill increases of approximately 5% annually from 2021 to 2026.
• Average monthly bill increase for typical residential customers estimated at $1 per day in 2023.

To protect and meet the energy needs of each of its 16 million customers, and enhance the energy systems they depend on every day, Pacific Gas and Electric Company (PG&E) is proposing a series of crucial safety, resiliency, and clean energy investments in its 2023 General Rate Case (GRC). PG&E is proposing these investments to continue to further reduce wildfire risk and deliver safe, reliable and clean energy service.

The company filed its funding proposal as required by the California Public Utilities Commission (CPUC) today, outlining investments in grid safety and resiliency, new technology and innovations, and gas and electric system infrastructure improvements to benefit its customers.

The CPUC requires energy companies, like PG&E, to file a GRC for the CPUC to review as it determines future customer rates. Previously, PG&E’s GRC was filed every three years and did not include natural gas transmission and storage (GT&S). Beginning in 2023, this review is on a four-year cycle and includes all costs associated with gas operations, electric distribution and generation operations in one proceeding.

PG&E’s GRC proposal includes approximately $7.4 billion in new investments from 2023-2026 to help keep customers safe and reduce the impacts of extreme weather and the threat of catastrophic wildfires. Wildfire safety investments include:

Wildfire Safety

• Hardening power lines and placing more power lines underground to reduce wildfire risk, and installing sectionalizing devices to reduce the customer impacts and size of Public Safety Power Shutoffs (PSPS);
• Testing and using new tools and technologies to better pinpoint how to best prevent and respond to the increasing risk of wildfires;
• Meeting and exceeding state vegetation safety standards to manage trees and other vegetation located near power lines that could cause a wildfire or power outage;
• Removing dead, dying and diseased trees that could strike overhead power lines;
• Deploying LiDAR technology and remote sensing data in extreme and elevated fire-risk areas to validate vegetation management work;
• Using technology to detect downed power lines within minutes and respond and reducing the possibility of ignitions caused by PG&E assets through detection of early stage equipment failures;
• Partnering with communities to enhance local electric grid resilience through community microgrid projects; and
• Working with customers to remove overhead wires in remote high fire-threat areas, and replace with stand-alone power systems to offer a new approach to utility service.

Additionally, PG&E’s GRC request includes significant investments to improve gas and electric system safety, reliability and resiliency; increase the use of new, innovative technologies; and expand the state’s clean energy infrastructure. Critical energy investments include:

Gas System Safety and Reliability

• Replacing 222.5 miles of distribution main pipeline in 2023 increasing to 245 miles in 2026;
• Increasing the number of miles of gas transmission pipeline that can be inspected by state-of-the-art tools that run inside the pipeline to more than 69% of the system by the end of 2036;
• Strength testing or replacing approximately 174 miles of gas transmission pipe in the rate case period to reconfirm maximum allowable operating pressures and to assess integrity;
• Employing advanced mobile leak detection and quantification technology to quickly find and fix gas leaks to improve safety and reduce methane emissions;
• Treating all gas odor calls as “Immediate Response” calls;
• Continuing to reduce the rate of third-party dig-ins around PG&E underground electric and gas facilities through the Damage Prevention Program that supports safe third-party excavation by identifying the presence of underground facilities; and
• Enhancing safety by installing secondary overpressure protection devices, such as slam shuts, at gas distribution and gas transmission pilot-operated regulator stations.

Electric System Safety and Reliability

• Replacing a greater number of wood poles and infrastructure identified through PG&E’s Enhanced Inspection Program;
• Adding additional distribution protection device zones that reduce or mitigate the duration and number of customers impacted by electrical outages;
• Improving critical systems and communications networks to manage the growing number of devices on a more dynamic electric grid and protect it from cybersecurity threats;
• Enabling behind-the-meter distributed generation resources to better serve customer needs; and
• Replacing transformers in high-rise buildings with dry type units to minimize fire risk.

Clean Energy

• Investing in electric distribution capacity upgrades to support customer at-home electric vehicle charging demand;
• Investing in more electric vehicle charging infrastructure at PG&E locations across its service area and adding over 1,000 electric vehicles to PG&E’s fleet by 2026;
• Operating and maintaining PG&E’s electric vehicle charging infrastructure;
• Operating the Elkhorn Battery Energy Storage System, a 183-megawatt storage system at the Moss Landing Substation in Monterey County;
• Uprating the three units at Helms Pumped Storage Facility to increase the amount of clean, hydroelectric power that PG&E can provide customers during peak periods, and help integrate additional intermittent renewable resources; and
• Investing in projects to mitigate the risk of uncontrolled water release from its hydroelectric dams.

“Our most important responsibility is the safety of the customers and communities we serve. These investments will strengthen our electric system against wildfire and other environmental risks, and enhance gas and electric system safety, while reinforcing our commitment to provide even more clean, renewable energy for California. Delivering for our hometowns, meeting the diverse energy needs of our customers, and building the safe, reliable and clean energy future they deserve are the energy priorities we are determined to achieve,” said Robert Kenney, PG&E Vice President of Regulatory and External Affairs.

Open and Transparent Public Regulatory Process

As with any customer rates proposal by PG&E, investments and expenditures are subject to open and transparent public review and approval by the CPUC. The CPUC thoroughly reviews PG&E’s rates proposals, including holding public hearings throughout the service area.

As part of this public process, PG&E strongly encourages its customers to provide feedback and participate in public hearings to help determine the energy priorities and investments that will define California’s energy future.

This four-year proposal does not include electric transmission costs, state-mandated Public Purpose Programs to support low-income customers and energy efficiency, or the actual commodity cost of gas and electricity. These costs are proposed through separate rate cases.

Customer Bill Impacts

Any resulting rate changes from the GRC, if approved by the CPUC, would take effect sometime in 2023 following a final decision.

While the GRC is one component of a PG&E bill, there are other filings that impact customer bills also. With these new safety, risk reduction, reliability improvements and clean energy investments as part of this GRC and other filings, the average residential customer bill is expected to increase about five percent annually, on average, from 2021 through 2026.

If the CPUC approves the proposed GRC investments in their entirety, the average monthly bill for a typical residential non-California Alternate Rates for Energy (CARE) electric and gas customer would increase in 2023 by about $1 a day and for CARE customers by about 80 cents a day.

“We are committed to improving the critical energy infrastructure that serves each of our 16 million customers, while also ensuring that energy remains as affordable as possible,” Kenney said. “We know this is a significant request that comes at a pivotal time when many of our customers are struggling to recover from the pandemic. While we believe these investments are critical to meet the evolving energy needs of our communities and customers, we won’t stop looking for additional ways to manage costs, and help customers use less energy and lower their bills.”

Minimize Future Rate Impact and Operational Savings

As part of a companywide commitment to reduce future customer costs, PG&E is proposing a series of cost-savings initiatives to help minimize the impact of future rate changes. Among these operational and cost-savings initiatives: selling surplus real estate and property, selling excess renewable energy, renegotiating power purchase agreements, and strategic sourcing and work planning.

Additionally, PG&E announced the sale of its licensing agreements with wireless providers that attach their equipment to certain electric transmission towers and other utility structures, which is expected to generate more than $900 million. It has also completed the sale of its San Francisco Financial District headquarters for approximately $800 million and is relocating to Oakland. PG&E has made a request to the CPUC to return the net gain on the sale of its SF headquarters to customers. A decision on the request is pending.

Cautionary Statement Concerning Forward-looking Statements

This news release contains forward-looking statements that are not historical facts, including statements about the beliefs, expectations, estimates, future plans and strategies of PG&E, including but not limited to the 2023 GRC and its wildfire prevention efforts. These statements are based on current expectations and assumptions, which management believes are reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties. In addition to the risk that these assumptions prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include factors disclosed in PG&E Corporation and PG&E’s joint annual report on Form 10-K for the year ended December 31, 2020, their most recent quarterly report on Form 10-Q for the quarter ended March 31, 2021, and other reports filed with the SEC, which are available on PG&E Corporation's website at www.pgecorp.com and on the SEC website at www.sec.gov. PG&E Corporation and PG&E undertake no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise, except to the extent required by law.

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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FAQ

What is PCG's proposed investment for wildfire safety?

PCG proposes approximately $7.4 billion in investments focusing on wildfire safety from 2023-2026.

How will the 2023 GRC affect customer bills?

If approved, customer bills are expected to rise by around 5% annually from 2021 through 2026.

What safety measures are included in the GRC?

Safety measures include hardening power lines, vegetation management, and installing detection technologies.

When will the proposed rate changes take effect?

The rate changes from the GRC, if approved, would take effect sometime in 2023.