Pacific Gas and Electric Co. (PG&E) is proposing a series of crucial safety, resiliency, and clean energy investments in its 2023 General Rate Case (GRC). The PG&E is proposing these investments to continue to further reduce wildfire risk and deliver safe, reliable, and clean energy service.
The company recently filed its funding proposal as required by the California Public Utilities Commission (CPUC), outlining investments in grid safety and resilience, new technology and innovations, and gas and electric system infrastructure improvements to benefit its customers.
The CPUC requires energy companies, like the PG&E, to file a GRC for the CPUC to review as it determines future customer rates. Previously, the 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.
The PG&E's GRC proposal includes approximately US$7.4 billion in new investments from 2023 to 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.
- Working with customers to remove overhead wires in remote high fire-threat areas and replace them with standalone power systems to offer a new approach to utility service.
Additionally, the 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.
- 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 the 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.
- 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 (EV) charging demand.
- Investing in more EV charging infrastructure at PG&E locations across its service area and adding more than 1000 EVs to the PG&E's fleet by 2026.
- Operating and maintaining the PG&E's EV charging infrastructure.
- Operating the Elkhorn Battery Energy Storage System, a 183-MW 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 the PG&E can provide customers during peak periods and help integrate additional intermittent renewable resources.
- 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.
As with any customer rates proposal by the PG&E, investments and expenditures are subject to open and transparent public review and approval by the CPUC. The CPUC thoroughly reviews the PG&E's rates proposals, including holding public hearings throughout the service area.
As part of this public process, the PG&E is encouraging 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.
Any resulting rate changes from the GRC, if approved by the CPUC, will 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 5% 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 US$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."
As part of a companywide effort to reduce future customer costs, the 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 are selling surplus real estate and property, selling excess renewable energy, renegotiating power purchase agreements, and strategic sourcing and work planning.
Additionally, the 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 US$900 million. It has also completed the sale of its San Francisco Financial District headquarters for approximately US$800 million and is relocating to Oakland. The 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.
