PG&E’s funds to bury lines diverted
As the North Bay rebuilds from October’s deadly wildfires, many residents would like to see more power lines buried underground, where raging windstorms can’t touch them.
But Pacific Gas and Electric Co. has a history of doing less of this work, year by year, than city officials and state regulators want. Instead, money earmarked for “undergrounding” power lines often gets diverted to other uses.
Last year, for example, regulators approved spending $60 million to move existing electrical lines underground, according to the California Public Utilities Commission. PG&E spent less than half that amount — $28.3 million.
The ratio was worse in 2016, when PG&E spent $31.1 million of its $75 million undergrounding budget. Since 2000, the utility has
spent all the money allocated for undergrounding in only three years: 2000, 2005 and 2006.
The company undergrounds around 30 miles of overhead lines in a typical year.
PG&E funds all undergrounding projects once they’re “shovel ready,” and uses the rest of the money on “other high-priority system improvements,” said company spokeswoman Lynsey Paulo.
The utilities commission, however, has ordered an audit to track where the money goes. The commission has also started a process to consider making changes to the way undergrounding programs work at all of the state’s investorowned utility companies, not just PG&E.
Meanwhile, city officials fume about long project timelines, which can stretch seven years or more.
“PG&E has been a slowpoke delivering projects,” said Morad Fakhrai, who recently retired as Hayward’s public works director. “It’s a very one-sided process where local agencies don’t have much say. PG&E says, ‘It is what it is — take it or leave it.’ ”
The process needs to speed up, say some North Bay officials. They want more electrical lines buried, in cities and rural areas alike.
Although state fire investigators have not yet announced the causes of any of last fall’s Wine Country wildfires, PG&E’s power lines, felled or damaged in a powerful windstorm, are considered a strong possibility. Mendocino, Napa and Sonoma counties have sued PG&E over the damage. And Sonoma County Supervisor Susan Gorin said that extra funding to bury power lines could be part of a settlement agreement with PG&E, if one is reached.
“Yes, undergrounding is very expensive, but the estimate is $10 billion damage from the fires,” said Gorin, who lost her home in one of the blazes. “Is undergrounding less expensive than that? Probably. And there were (45) lives lost.” The costs are considerable. By PG&E’s estimate, moving an overhead line underground costs an average of $2.3 million per mile, while stringing up an overhead line costs $800,000 per mile. It can be more expensive in a big city: When San Francisco moved 46 miles of overhead lines underground, from 1996 through 2006, the costs averaged $3.8 million per mile.
PG&E earns the same profit rate on underground and overhead lines, Paulo said. Almost one quarter of PG&E’s 107,000 miles of electrical distribution lines now lie underground — largely a product of requirements since the late 1960s that new housing developments be built with underground lines, with most costs borne by the developers. Such new projects are less complex than undergrounding existing lines and therefore cheaper, averaging about $1.16 million per mile.
Paulo said PG&E is ready to discuss with North Bay officials the possible increased use of undergrounding, as communities rebuild. The long timelines that so frustrate city governments, she said, are due to the complexity of the work, not foot-dragging by PG&E. The utility has “half a dozen” employees dedicated to the program, plus managers for individual projects.
“Sometimes these projects are delayed or don’t even materialize, and it can be for factors outside of PG&E’s control,” Paulo said. “Sometimes there are delays on our end as well, and that could be due to higher priority work that constrains our resources.”
In contrast, San Diego and the electric utility that serves it — San Diego Gas & Electric Co. — have made placing lines underground a high priority. In 2003, for reasons including reliability and aesthetics, city officials adopted a special surcharge on residents that helps fund the work. As a result, almost 65 percent of SDG&E’s electric distribution lines, in both the city and the countryside, run underground.
California’s process for replacing overhead power lines with underground ones began in 1967 and, at first, had nothing to do with preventing fires. Instead, in the wake of first lady Lady Bird Johnson’s beautification efforts, state officials saw it as a way to fight the visual blight of poles and wires.
For communities that have overhead lines and wanted to move them underground, regulators created several options, with the most commonly used process referred to as Rule 20A. In it, cities and counties receive annual allotments of credits — overseen by the utilities commission — that city officials liken to an airline’s frequent flier miles.
Once a city accumulates enough credits to cover the cost of an undergrounding project, the city will assemble a proposal, and PG&E will vet it to see if it meets the state’s criteria. The process favors projects along heavily traveled streets and roads as well as places with an unusually high concentration of overhead wires. Cities can borrow against their future credit allotments for particularly large projects.
PG&E currently has more than 120 projects that have met the criteria and are either in planning or active construction, nine of them in Napa and Sonoma counties.
They can spend a long time in that queue. San Leandro has an undergrounding project on East 14th Street that was first proposed in 2003, said Keith Cooke, the city’s engineering and transportation director. City officials substantially expanded the project in 2010, and that larger version is now in the engineering phase, with construction possibly beginning in December.
The undergrounding program, Cooke said, does not seem to be a priority for PG&E.
“We’ve done projects before,” he said. “It’s just since the 2000s that PG&E’s been really slow.”
Paulo said the San Leandro project was particularly complex and at one point was held up by a change in federal energy regulations that required PG&E to revise its engineering plans. At first, PG&E didn’t have the staffing resources to redo those plans, Paulo said. The company finally completed its revisions by the end of 2016, she said, and is now waiting for the city to finish the civil engineering designs.
“There were a number of factors that added to the length of that project, some on our end,” Paulo said.
Santa Rosa officials gave up several years ago on an undergrounding project, on College Avenue, because they didn’t think PG&E would move quickly enough. The city was working with Caltrans on widening the street, and “there was no way we could coordinate it with PG&E’s timeline,” said Jason Nutt, the city’s director of transportation and public works.
Cooke and Nutt expressed frustration with a relatively recent change to the way Rule 20A works.
From 2006 through 2010, PG&E distributed a total of $81 million each year in undergrounding work credits to the cities and counties in its territory. But in 2011, the utilities commission cut the annual allotments roughly in half to just over $41 million, to let PG&E catch up on its backlog of projects. After debate last year, the commission decided to keep it at that level for now.
City officials complain that the lower annual allotments won’t keep pace with the rising cost of construction. Rather than slowly building up enough credits to cover the cost of their projects, they fear they’ll actually lose ground the longer their projects languish in line.
“How do I say this nicely? We can use all the help we can get, and more credits would help us do more of this work,” Nutt said. “More credits won’t help speed up PG&E’s process, however. It’s a two-pronged issue.”
Meanwhile, some public officials say they want to improve not just the pace, but also the scope of undergrounding, tweaking the program to include more rural areas. The biggest October fires, after all, started in the countryside before burning their way into Santa Rosa and the city of Sonoma. Santa Rosa’s Coffey Park neighborhood, destroyed by the flames, had underground lines.
“It’s something we need to consider both in the burned areas and what I call the as-yetunburned areas,” said Sonoma County Supervisor Lynda Hopkins. “I represent the West County, and it’s a matchbox waiting to go up.”
Partly to make the costs more palatable, she wants the work combined with bringing broadband Internet service to more rural communities, something she considers a critical need.
“There’s a potential for synergy there,” Hopkins said. “Broadband today is what electricity was a century ago, where the cities are lit up, but the rural areas aren’t.”