PG&E Corp. said Wednesday that it plans to bury 10,000 miles of power lines to reduce wildfire risk throughout Northern California at an estimated cost of up to $20 billion, reversing its earlier stance that doing so would be prohibitively expensive.
The utility company, which serves about 16 million customers in northern and central California, said the effort will substantially reduce the likelihood of its power lines sparking wildfires as drought and climate change heighten the risk of large, fast-moving blazes.
“We know that we have long argued that undergrounding was too expensive,” Chief Executive Patti Poppe said. “This is where we say it’s too expensive not to underground. Lives are on the line.”
PG&E’s equipment has ignited more than 20 California wildfires within the past several years that have collectively killed more than 100 people and burned thousands of homes. Most of the fires were sparked when trees or branches touched the company’s wires.
PG&E disclosed to California regulators earlier this week that one of its power lines may have been involved in the ignition of one of the fires currently ravaging the West, the Dixie Fire, which has grown to cover more than 85,000 acres in Northern California. The company said in a regulatory filing that an employee responding to a power outage discovered a fire beneath one of its distribution lines in the Feather River Canyon in the forested Sierra Nevada foothills.
The employee found two blown fuses and a tree touching the wire. State fire investigators collected some equipment from the line as part of an ongoing probe into the cause of the fire, which has forced evacuations from communities near the canyon. It is burning northeast of Paradise, which was destroyed in 2018 by a fire sparked by a PG&E transmission line.
That wildfire, the deadliest in California history, killed 84 people. The company last year pleaded guilty to 84 counts of manslaughter for its role in sparking the fire, becoming one of the few U.S. corporations ever to be convicted of homicide-related charges.
Ms. Poppe said the Dixie Fire, and its proximity to Paradise, prompted the company to expedite the announcement of its plan—which has been in the works for months—to put underground a substantial number of its lines. PG&E estimates the work will cost as much as $20 billion, though it doesn’t yet have a timeline for when it will complete the work.
PG&E in recent years has been desperately trying to reduce wildfire risk throughout its service territory by trimming or removing millions of trees and strengthening its lines to operate safely during periods of high winds, which increase the risk of branches flying into live wires.
The company sought bankruptcy protection in 2019 to address billions of dollars in liability costs stemming from fires sparked by its equipment. The company emerged from chapter 11 last year after settling those claims for $25.5 billion.
Firefighters worked to block the spread of the Dixie Fire in Northern California on Sunday.
Photo: david swanson/Reuters
Another deadly wildfire could have critical financial consequences for PG&E, which issued huge amounts of debt and equity as part of its $59 billion reorganization plan. Shares in the company fell steeply this week on news its equipment may have ignited the Dixie Fire.
The financial consequences of more wildfires would also affect victims of past fires, who now indirectly hold shares in the company through a $13.5 billion trust established to gradually compensate them for their losses in coming years. PG&E funded the trust half with cash and half with company shares. The trust held about a fifth of the company’s outstanding shares upon PG&E’s emergence from bankruptcy.
Ms. Poppe said there are more than eight million trees within striking distance of the company’s power lines. It plans to spend $1.4 billion this year to trim more than a million trees and remove more than 300,000 of them.
“And yet, we are still dissatisfied,” she said. “We are obviously not making enough progress fast enough.”
Ms. Poppe said that as the company buries more of its power lines, it will be able to substantially reduce the cost of trimming so many trees and other costs associated with making overhead lines safer.
PG&E also anticipates being able to reduce the frequency of so-called public-safety power shut-offs as it puts more lines underground. The company in recent years began proactively shutting off power when strong winds pick up, increasing the likelihood of its power lines sparking fires as a result of tree contract or equipment failure.
The proposed work constitutes only a fraction of the PG&E’s electrical system, which includes roughly 80,000 miles of lower-voltage distribution lines and 20,000 miles of higher-voltage transmission lines, many of which run through areas at high risk of wildfire.
Still, the company called the scope of the work unprecedented within the industry. It plans to devise a way to prioritize the work to target high-risk areas in the coming months. It will focus initially on burying distribution lines and may later consider doing the same with transmission lines.
PG&E is on criminal probation following a 2010 natural gas pipeline explosion that killed eight people in San Bruno, south of San Francisco. The company was convicted on felony charges of violating federal pipeline safety laws.
A federal judge overseeing PG&E’s probation has for months been pressing the company to do more to manage the risks to its electric system and recently recommended it do more to address the threat of trees falling on its lines.
California utility regulators have also stepped up oversight of PG&E and have threatened the possibility of a state takeover of the company if its safety lapses continue, though such a move is considered unlikely.
Write to Katherine Blunt at [email protected]
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