PG&E monthly bills might hop higher due to power line burial plan

Jun 17, 2023

OAKLAND — PG&E bills may hop higher if the utility lands state approval for a rate proposal that includes wide-ranging plans to bury power lines to help ward off catastrophic wildfires.

A hearing officer with the state Public Utilities Commission is expected to issue a proposed decision in the coming days on PG&E’s general rate request that could trigger an array of impacts on monthly customer bills. Among the proposals is a plan that could oblige its customers to foot the bill to bury PG&E power lines.

That could squeeze those who have already endured rising monthly bills, warned Mark Toney, executive director of The Utility Reform Network, or TURN, a consumer group. Natural gas prices skyrocketed over the winter.

The PUC hearing officer’s proposed decision will kick off a period during which consumer advocates, PG&E and other parties can weigh in on the administrative law judge’s recommendation ahead of a final decision by the five members of the commission. The full state commission is expected to make a final decision on the rate case by year’s end.

“We have a real affordability crisis for utility costs,” Toney said. “One of the biggest cost drivers is this massive expense for burying 10,000 miles of PG&E power lines.”

PG&E’s power lines have come under intense scrutiny in the wake of a string of deadly wildfires over the last several years.

The lethal fires included blazes in 2015 in Amador County, 2017 in the North Bay Wine Country and 2018 in Butte County. The fires were caused by PG&E’s equipment coming into contact with adjacent trees or other vegetation. The infernos erupted in the years after a fatal PG&E gas pipeline explosion leveled a San Bruno neighborhood in 2010, killing eight.

Rather than bury the lines to mitigate fire risk, TURN is urging the Oakland-based utility to insulate its lines. Insulation of overhead lines would cost bout $800,000 a mile, Toney estimated. The cost to bury 10,000 miles of power lines would be several times as much, he added.

“Insulated lines are completed much more quickly than burying the lines and at a fraction of the cost,” Toney said. “You are not waiting 10 to 20 years to get the safety you need. You are doing it within a few years.”

According to the utility, the cost to bury power lines was $3.3 million per mile in 2022 and is expected to gradually decrease to roughly $2.8 million a mile in 2026.

But PG&E executives believe placing power lines underground is the best long-term approach, according to company spokesperson Jennifer Robison.

“Undergrounding electric distribution lines in high fire risk areas is the most effective long-term solution for keeping customers and communities safe,” Robison said in a statement. “Undergrounding eliminates nearly all wildfire ignition risk from those lines and helps to reduce long-term costs.”

To the south, Southern California Edison, the principal electricity provider in sprawling Los Angeles County and nearby regions, is taking the less-expensive approach, embarking on a quest to insulate 8,000 miles of overhead power lines.

“Covered conductor is a critical tool to quickly mitigate the threat of wildfires that could be caused by debris blowing into power lines. It helps keep our communities safe,” Steve Powell, Edison’s chief executive officer, said in a statement last summer.

Edison executives estimate that the cost to cover roughly 8,000 miles of overhead lines with insulation could be around $5 billion. By comparison, current estimates to bury 10,000 miles of PG&E power lines are in the range of $15 billion to $30 billion.

“Undergrounding reduces the need for trimming and removing trees, and over time reduces the need for other wildfire mitigation activities,” PG&E said. “Undergrounding lines improves reliability and long-term resiliency.”

PG&E’s proposal, if it wins approval, would almost certainly mean higher customer bills. It arrives at a time when the bills residential customers pay each month have skyrocketed. Bills have gone up in part because of rising gas and energy costs and also because of system upgrades and wildfire mitigation.

About five years ago, in March 2018, PG&E’s average bill for the typical residential customer who received electricity and gas services from the utility was $169.73 a month. In January 2023, the average combined bill was $240.73 a month — meaning PG&E monthly bills have increased by nearly 42%, or an average annual increase of 8.4%.

The overall Bay Area inflation rate as measured by the consumer price index has jumped 18.9% in five years, or an average of 3.8% a year. In other words, PG&E bills have been rising more than twice as fast as the overall inflation rate in the Bay Area.

Toney thinks the PG&E power line burial program might provide the potential for a higher profit than the less expensive insulation option and ultimately help line the pockets of wealthy investors on Wall Street.

“PG&E’s scheme to underground power lines,” Toney said, “is the most expensive and most costly method of tackling this challenge.”

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