Released May 10, 2023 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Pacific Gas and Electric Company (PG&E) (Oakland, California), the utility unit of PG&E Corporation (NYSE:PCG) (Oakland, California), told investors it plans to spend about $52 billion on capital projects over the 2023-2027 period, which would be about $13 billion (or 33%) more than the $39 billion it invested over its prior five-year capital program, company officials said May 4 in announcing first-quarter earnings. In addition, officials said there was potential to add $5 billion to the $52 billion in capital projects over the 2023-2027 period.
Click on the image at right to see a comparison and breakdown of PG&E's current five-year capital program to its prior five-year capital program (2018-2022).
Notably, about half of the utility's capital budget through 2027 will be spent on risk-reduction efforts, up from about 40% over the 2018-2022 period. That earlier period was marked by several very destructive wildfires that were sparked by PG&E electrical equipment, which ignited tinder-dry brush in the utility's 70,000-squareimile service area across northern and central California. For more on those wildfires, the liabilities from which put PG&E into bankruptcy, see March 23, 2020, article - Nation's Largest Utility Takes Steps to Exit Bankruptcy.
In response to those recent wildfires, California's investor-owned electric utilities were given permission by state regulators to pre-emptively shut off electricity under certain conditions, to reduce the chance that their equipment could spark wildfires. Those so-called "public safety power shutoffs" were highly unpopular with customers. So, in 2021, PG&E unveiled what officials called a "moonshot" program to bury about 10,000 miles of distribution lines in heavily wooded areas, to lessen the chance that an errant spark could trigger a wildfire. For more on that, see July 26, 2021, article - PG&E Unveils 'Moonshot' Effort to Underground 10,000 Miles of Distribution Line to Reduce Wildfire Risk.
Industrial Info is tracking about 71 capital projects involving PG&E, valued at nearly $6 billion. Nearly $4 billion is scheduled to go to decommissioning and dismantling the Diablo Canyon Nuclear Power Station, a two-unit, 2,255-megawatt nuclear plant that may, or may not, cease operations in the middle of this decade, when its operating licenses expire.
The possible extension of Diablo Canyon's two operating licenses is being considered by the U.S. Nuclear Regulatory Commission (NRC) (Rockville Pike, Maryland). For more on the status of the Diablo Canyon plant, see April 12, 2023, article - California Grid Operator Eyes $9.3 Billion of New Transmission and January 30, 2023, article - NRC Casts Doubt on Diablo Canyon Operating Past Middle of This Decade.
Officials told investors May 4 that the utility's capital spending will average about $10.4 billion annually for five years. Beyond that, the utility has about $5 billion of "upside" investment opportunities, consisting of adding incremental transmission capacity, modernizing and expanding its electric network, and other growth-related opportunities. A lot of the actual spend will be driven by the outcome of two rate cases this year: a general rate case (GRC) and a gas transmission & storage rate case (GT&S).
Regarding its wildfire mitigation plans, officials said the utility:
"The team at PG&E is driving forward in reducing physical risk on our system and financial risk--both of which benefit our customers and our investors," said Patti Poppe, chief executive of the utility's corporate parent PG&E Corporation, on May 4. "After the first quarter of 2023, we are on track to meet our earnings targets as well as our efforts to reduce non-fuel operating and maintenance costs by 2%, and we look forward to continued predictable results in the months ahead."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Click on the image at right to see a comparison and breakdown of PG&E's current five-year capital program to its prior five-year capital program (2018-2022).Notably, about half of the utility's capital budget through 2027 will be spent on risk-reduction efforts, up from about 40% over the 2018-2022 period. That earlier period was marked by several very destructive wildfires that were sparked by PG&E electrical equipment, which ignited tinder-dry brush in the utility's 70,000-squareimile service area across northern and central California. For more on those wildfires, the liabilities from which put PG&E into bankruptcy, see March 23, 2020, article - Nation's Largest Utility Takes Steps to Exit Bankruptcy.
In response to those recent wildfires, California's investor-owned electric utilities were given permission by state regulators to pre-emptively shut off electricity under certain conditions, to reduce the chance that their equipment could spark wildfires. Those so-called "public safety power shutoffs" were highly unpopular with customers. So, in 2021, PG&E unveiled what officials called a "moonshot" program to bury about 10,000 miles of distribution lines in heavily wooded areas, to lessen the chance that an errant spark could trigger a wildfire. For more on that, see July 26, 2021, article - PG&E Unveils 'Moonshot' Effort to Underground 10,000 Miles of Distribution Line to Reduce Wildfire Risk.
Industrial Info is tracking about 71 capital projects involving PG&E, valued at nearly $6 billion. Nearly $4 billion is scheduled to go to decommissioning and dismantling the Diablo Canyon Nuclear Power Station, a two-unit, 2,255-megawatt nuclear plant that may, or may not, cease operations in the middle of this decade, when its operating licenses expire.
The possible extension of Diablo Canyon's two operating licenses is being considered by the U.S. Nuclear Regulatory Commission (NRC) (Rockville Pike, Maryland). For more on the status of the Diablo Canyon plant, see April 12, 2023, article - California Grid Operator Eyes $9.3 Billion of New Transmission and January 30, 2023, article - NRC Casts Doubt on Diablo Canyon Operating Past Middle of This Decade.
Officials told investors May 4 that the utility's capital spending will average about $10.4 billion annually for five years. Beyond that, the utility has about $5 billion of "upside" investment opportunities, consisting of adding incremental transmission capacity, modernizing and expanding its electric network, and other growth-related opportunities. A lot of the actual spend will be driven by the outcome of two rate cases this year: a general rate case (GRC) and a gas transmission & storage rate case (GT&S).
Regarding its wildfire mitigation plans, officials said the utility:
- Plans to underground 350 miles of distribution lines this year, slightly more than the cumulative 300 miles they have undergrounded between 2019 and 2022
- Expects to install about 75 electric sectionalizing devices in 2023, adding to the 1,351 such devices it installed over the prior four years. These devices are designed to limit faults along the electrical system, thus reducing the chance for sparks
- Is scheduled to harden about 420 miles of distribution this year, adding to the 1,224 miles that were hardened over the 2019-2022 period
- Installing 1,424 weather stations and 602 high-definition cameras
- Performing enhanced vegetation management on about 8,283 miles of utility electrical lines
"The team at PG&E is driving forward in reducing physical risk on our system and financial risk--both of which benefit our customers and our investors," said Patti Poppe, chief executive of the utility's corporate parent PG&E Corporation, on May 4. "After the first quarter of 2023, we are on track to meet our earnings targets as well as our efforts to reduce non-fuel operating and maintenance costs by 2%, and we look forward to continued predictable results in the months ahead."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
