PG&E’s plan to bury power lines costs billions
Pacific Gas & Electric on Thursday offered a high cost estimate for the first part of its plan to bury thousands of miles of power lines in wildfire-prone areas, suggesting a project totaling tens of billions of dollars, according to the public service earnings call on Thursday.
The company told shareholders it plans to bury 3,600 miles of high-risk power lines by the end of 2026 at a cost of $9 billion to $13.5 billion, based on an estimate of $2.5 to $3.75 million per mile. Last summer, the utility estimated a “starting point” of $15 billion to $20 billion for 10,000 miles of lines in high-risk areas.
Although the company did not address the impact of the project on future electricity rates, it is difficult to believe that such a project could be paid for without significantly increasing ratepayer bills, said Mark Toney, executive director of The Utility Reform Network.
“We’re reaching a crisis where they’re going to break the bank,” Toney said.
Patti Poppe, CEO of the utility provider, said the company would seek to fund capital improvements in a variety of ways that could still benefit its shareholders, including finding cost savings elsewhere and operating more efficiently.
The plan illustrates how much effort and spending will be needed to reduce wildfire risk amid worsening drought and escalating temperatures, even as PG&E faces greater scrutiny more thorough in its security practices. It’s become a huge problem over the past decade, starting with the deadly San Bruno explosion in 2010 and reaching a crisis point for the utility as authorities blamed PG&E equipment for having sparked some of the largest and deadliest wildfires in California history.
The utility plans to submit a detailed wildfire mitigation plan to the California Public Utilities Commission by Feb. 25. PG&E stock fell 7.4% on Thursday.
The announcement follows a 9.2% rate increase for PG&E customers approved by the state Utilities Commission on Thursday.
Poppe said more than 50% of the 600 miles expected to be flown by the end of 2023 has already been “explored”, is ready for construction or is under construction.
“The Undergrounding is a great example of our simple, affordable model in action,” Poppe said. “We are investing in very high-value infrastructure and reducing our temporary repair expenses and our annual recurring expenses.”
However, several taxpayer and environmental groups have lambasted the costs of the plan and the seemingly laborious pace of such a critical project.
“In an ideal world, I’d like to see their entire underground system – their plan just isn’t realistic,” said April Maurath Sommer, executive director of the Wild Tree Foundation, an environment-focused group based in the US. Bay Area. “That’s the concern from an environmental standpoint and from a safety standpoint, with PG&E’s plan to focus on landfill, it’s too expensive and it’s too slow.”
Instead, she advocated for the utility provider to install covered conductors — essentially, a plastic covering over its wires — which she said can significantly reduce the risk of wildfires at a fraction of the cost. of burial. Maurath Sommer cited a Southern California Edison estimate of $551,000 per mile to install covered conductors, though PG&E said such a move would easily cost nearly three times as much for its system.
“The focus should be on getting things done as quickly as possible and as safely as possible,” said Maurath Sommer. “The undergrounding just isn’t realistic.”
The announcement signals the first publicly announced schedule for the utility to begin burying lines to reduce wildfire risk. In July, the utility provider announced plans to bury 10,000 miles of power lines in high wildfire risk areas. In an earnings call, utility executives offered a “starting point” of $15-20 billion – an estimate that would equate to $1.5-2 million per mile.
The latest plan called for spending $3.75 million per mile this year and gradually reducing that cost until 2026, when the price would drop to $2.5 million.
The utility’s goal is to bury 175 miles this year and significantly increase those totals each year for the next five years, until it bury 1,200 miles of power lines by 2026. The company n only completed 70 miles of buried lines in 2021.
He gave no updated timetable for burying the remaining 6,400 miles of power lines in his original target. However, even at the low end of the revised estimate – a cost of $2.5 million per mile – burying 10,000 miles of power lines would exceed $25 billion.
Also on Thursday, the utility provider said that by the end of 2022, all of its power lines in high fire risk areas will be equipped with its Enhanced Powerline Safety Settings system, which can help reduce fires from forest by cutting off the power to a line. within a tenth of a second when an object hits it. In 2021, the system was in place on around 45% of its power lines in high-risk areas. Activated circuits have seen an 80% drop in wildfire starts, Poppe said.
“We learned a lot from our experiences last summer, and we’ll use that education to guide how we design these metrics in 2022,” Poppe said.
Concerns about PG&E’s safety record and wildfire risk management have plagued the utility for years.
He was found guilty of six counts in connection with the San Bruno pipeline explosion that killed eight people and destroyed dozens of homes in 2010. Most recently he pleaded guilty to 84 counts of manslaughter. for his role in the 2018 camp fire – the state. the deadliest fire on record, which leveled the town of Paradise.
More recently, the California Department of Forestry and Fire Protection said PG&E equipment started the Dixie Fire, which raged through the summer of 2021. The blaze made a died as it burned nearly a million acres across the Sierra Nevada, becoming the second largest fire in California history.