Source: The Mercury News | By Jakob Rodgers
Pacific Gas & Electric offered a hefty cost estimate Thursday for the first portion 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 utility’s earnings call Thursday.
The company announced to stockholders that 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 million to $3.75 million per mile. Last summer, the utility estimated a “starting point” of $15-20 billion for 10,000 miles of lines in high-risk areas.
Although the company did not address the impact of the project on future electric rates, it’s hard to believe such a project could be paid for without ratepayers’ bills significantly increasing, said Mark Toney, executive director with The Utility Reform Network.
“We’re reaching a crisis where they’re going to break the piggybank,” Toney said.
Patti Poppe, the utility provider’s CEO, said that the company would strive to fund capital improvements in a variety of ways that could still be of benefit to its shareholders, including by finding cost savings elsewhere and running more efficiently.
The plan illustrates just how much effort and expense will be needed to reduce wildfi
“Undergrounding is a great example of our simple and affordable model in action,” Poppe said. “We invest in really high-value capital infrastructure and reduce our spend on temporary repairs and annual recurring expenses.”
Multiple ratepayer and environmental groups, however, lambasted the plan’s costs and the seemingly plodding pace for such a critical project.
“In an ideal world, I would love to see their entire system underground — their plan is just not realistic,” said April Maurath Sommer, executive director of the Wild Tree Foundation, an environmentally-focused group based in the Bay Area. “That’s the concern from an environmental point of view and from a safety point of view, with PG&E’s plan to focus on undergrounding, is it’s too expensive and it’s too slow.”
She instead advocated for the utility provider to install covered conductors — essentially, a plastic covering over its wires — that, she said, can significantly reduce the risk of wildfires at a fraction of the cost of undergrounding. Maurath Sommer cited a Southern California Edison estimate of $551,000 a mile to install covered conductors, though PG&E has stated that such a move would easily cost nearly three times as much for its system.
“The focus needs to be on doing things as quickly as possible and as safely as possible,” Maurath Sommer said. “Undergrounding is just not realistic.”
The announcement signals the first publicly stated timeline for the utility to begin burying lines as a means to reduce wildfire risk. In July, the utility provider announced that it planned to bury 10,000 miles of power lines in high-risk wildfire areas. During an earnings call, the utility’s leaders floated a “starting point” of $15 billion to $20 billion — an estimate that would equate to $1.5 million to $2 million a mile.
The latest plan called for spending $3.75 million a mile this year and gradually reducing that cost through 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 annually for the next five years, until it’s burying 1,200 miles of power lines in 2026. The company completed only 70 miles of buried lines in 2021.
It gave no updated timeline for burying the remaining 6,400 miles of power lines in its originally stated goal. However, even at the low end of the revised estimate — a cost of $2.5 million a 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-threat areas will be equipped with its Enhanced Powerline Safety Settings system, which can help reduce wildfire ignitions by cutting off power to a line within a tenth of a second when an object strikes it. In 2021, the system was in place on about 45% of its power lines in high-risk areas. Enabled circuits saw an 80% decline in wildfire starts, Poppe said.
“We’ve learned a lot from our experiences last summer, and we’ll use that education to guide how we engineer these settings in 2022,” Poppe said.
re risk amid worsening drought and escalating temperatures, even as PG&E faces increasing scrutiny for its safety practices. It’s become a huge issue over the last decade, beginning with the deadly 2010 San Bruno explosion and reaching a crisis point for the utility as authorities have blamed PG&E equipment for starting some of the largest and deadliest wildfires in California’s history.
The utility plans to submit a detailed wildfire mitigation plan to the California Public Utilities Commission by Feb. 25. PG&E’s stock dropped 7.4% on Thursday.
The announcement came on the heels of a rate increase of 9.2% for PG&E customers, approved Thursday by the state’s Public Utilities Commission.
Poppe said that more than 50% of the 600 miles expected to be completed by the end of 2023 have already been “scoped,” are construction-ready or are under construction.
Concerns about PG&E’s safety record and handling of wildfire risks have plagued the utility for years.
It was convicted of six criminal counts in connection with the San Bruno pipeline explosion that killed eight people and destroyed dozens of houses in 2010. More recently, it pleaded guilty to 84 counts of involuntary manslaughter for its role in the 2018 Camp Fire — the state’s deadliest blaze on record, which leveled the town of Paradise.
Most recently, the California Department of Forestry and Fire Protection said that PG&E equipment sparked the Dixie Fire, which raged throughout the 2021 summer. The blaze left one person dead as it burned nearly 1 million acres across the Sierra Nevada, becoming the second-largest fire in California history.