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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Pacific Gas and Electric Company (San Francisco, California), the utility unit of PG&E Corporation (NYSE:PCG) (San Francisco, California), has a proposed capital spending plan of between $46.9 billion and $56.9 billion for the 2021-2026 period, company executives said on their third-quarter earnings call on November 1. That works out to an average annual spend of between $7.8 billion and $9.4 billion over the six-year period, a sharp increase over earlier years.
Click on the image at right to see a graphic on PG&E's proposed capital budget for 2021-2026.
Industrial Info is tracking 64 PG&E projects valued at about $5.29 billion.
A good bit of the planned spending, up to $20 billion, will go to the utility's plan to bury about 10,000 miles of distribution line to reduce the chance that utility equipment will spark wildfires, as has happened several times in recent years. 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.
A significant portion of Pacific Gas and Electric's 70,000-square-mile service area in Northern and Central California is heavily wooded. Those areas have suffered a number of wildfires sparked by failing utility equipment or trees making contact with powerlines in recent years.
In a statement that accompanied the company's third-quarter earnings report, Patti Poppe, chief executive of parent company PG&E Corporation, said, "We continue to deliver on our wildfire mitigation commitments while initiating bold new actions to reduce risk across our electric system, including undergrounding power lines, calibrating the sensitivity of our automatic shutoff equipment, and executing more vegetation management."
The utility said it had installed 1,277 weather stations to date in 2021, as part of its effort to better gauge weather conditions that might lead to preemptive power shutoffs during "red flag" events. A "red flag" weather event is a combination of low humidity, high winds, dry fuels and the potential for dry lightning strikes -- all of which increase the potential for utility equipment to fail or trees making contact with powerlines and spark a wildfire.
In 2019, under guidelines approved by the state's Public Utilities Commission, PG&E had nine preemptive public safety power shutoffs (PSPS) that affected more than 2 million customers. In 2020, that number fell to six PSPS events affecting about 653,000 customers. Thus far in 2021, PG&E has preemptively shut down power on five occasions; those shutoffs affected about 80,400 customers, company officials told investors last week.
Adoption of advanced weather forecasting algorithms, more aggressive vegetation removal and other measures has allowed PG&E to sharply reduce the number of customers affected by a PSPS, executives said during the earnings call.
"Our 2021 PSPS algorithm captured and may have prevented catastrophic fires," company officials said.
The utility does not break out its planned capital spending by functional area. According to Industrial Info's Global Market Intelligence (GMI) Power Project Database, the utility's largest capital projects, by dollar value, are:
Commenting on earnings, Poppe said, "Our leadership team is implementing the necessary systems and processes to run a high-performing utility--over both the short and long term--that will produce triple bottom-line results for people, the planet, and California's prosperity."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Industrial Info is tracking 64 PG&E projects valued at about $5.29 billion.
A good bit of the planned spending, up to $20 billion, will go to the utility's plan to bury about 10,000 miles of distribution line to reduce the chance that utility equipment will spark wildfires, as has happened several times in recent years. 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.
A significant portion of Pacific Gas and Electric's 70,000-square-mile service area in Northern and Central California is heavily wooded. Those areas have suffered a number of wildfires sparked by failing utility equipment or trees making contact with powerlines in recent years.
In a statement that accompanied the company's third-quarter earnings report, Patti Poppe, chief executive of parent company PG&E Corporation, said, "We continue to deliver on our wildfire mitigation commitments while initiating bold new actions to reduce risk across our electric system, including undergrounding power lines, calibrating the sensitivity of our automatic shutoff equipment, and executing more vegetation management."
The utility said it had installed 1,277 weather stations to date in 2021, as part of its effort to better gauge weather conditions that might lead to preemptive power shutoffs during "red flag" events. A "red flag" weather event is a combination of low humidity, high winds, dry fuels and the potential for dry lightning strikes -- all of which increase the potential for utility equipment to fail or trees making contact with powerlines and spark a wildfire.
In 2019, under guidelines approved by the state's Public Utilities Commission, PG&E had nine preemptive public safety power shutoffs (PSPS) that affected more than 2 million customers. In 2020, that number fell to six PSPS events affecting about 653,000 customers. Thus far in 2021, PG&E has preemptively shut down power on five occasions; those shutoffs affected about 80,400 customers, company officials told investors last week.
Adoption of advanced weather forecasting algorithms, more aggressive vegetation removal and other measures has allowed PG&E to sharply reduce the number of customers affected by a PSPS, executives said during the earnings call.
"Our 2021 PSPS algorithm captured and may have prevented catastrophic fires," company officials said.
The utility does not break out its planned capital spending by functional area. According to Industrial Info's Global Market Intelligence (GMI) Power Project Database, the utility's largest capital projects, by dollar value, are:
- Decommissioning & Dismantlement of Diablo Canyon Nuclear Power Station, a project valued at about $3.9 billion that is scheduled to begin in mid-2025. Diablo Canyon is the two-unit, 2,255-megawatt nuclear power station that PG&E closed prematurely in 2018. The utility is scheduled to release a request for proposal (RFP) for engineering, procurement and construction (EPC) services in mid-2021. Subscribers can click here for the project report.
- Moss Landing Battery Energy Storage Project (BESS), valued at $185 million. The plans call for construction of 182.5 MW of battery energy storage. Construction began last year and is close to being completed. Click here to view the project report.
- Buttonwillow 230-kilovolt (kV) Midway-Santa Maria Transmission Line Upgrade Project, a $115 million project that involves upgrade 70 miles of existing 115-kV overhead transmission line to a high capacity 230-kV transmission line from the Midway Substation in Kern County, California, to the Santa Maria Substation in Santa Barbara County. That project is slated to begin construction in mid-2024 and be operating in mid-2025. Click here for the project report.
- Lodi 230-kV Lodi-Eight Mile Transmission Line, a $105 million project to build a 15-mile, 230-kV double circuit transmission line from the new Lodi Industrial Substation to the Eight-Mile Substation. The line will help to address reliability concerns. Construction is scheduled to kick off in mid-2022 and be complete by mid-2025. Click here for the project report.
Commenting on earnings, Poppe said, "Our leadership team is implementing the necessary systems and processes to run a high-performing utility--over both the short and long term--that will produce triple bottom-line results for people, the planet, and California's prosperity."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
