Why We Support the Levels of Undergrounding Approved in PG&E’s General Rate Case

Californians are living in a new normal in which wildfires are here to stay and will only be exacerbated by the effects of climate change. To prevent power lines from igniting wildfires, it is essential that we find ways to swifty and affordably upgrade them. One approach is called undergrounding, which essentially means burying our above-ground electric lines – a simple solution for a complex issue.

The state cannot feasibly underground every power line because it is not possible everywhere and is not always the most economic option. The issue of undergrounding played a huge part in Pacific Gas and Electric’s (PG&E) recent proposed budget, which it presented in its general rate case request filed at the California Public Utilities Commission (CPUC). The utility asked the CPUC to allow it to underground about 2,000 miles of distribution lines, at a cost of $5.9 billion over the next four years. This was a substantial portion of its proposed budget. For example, its total revenue requirement was just north of $12 billion in 2022 for the vast majority of its operations and investment needs.

The CPUC issued a decision on November 16, 2023, that determined PG&E’s budget (otherwise known as a revenue requirement) through 2026. The CPUC’s decision allows for 1,230 miles of undergrounding in addition to installing covered conductors (insulating above-ground power lines) on 778 miles over the next four years.

While the decision adopts a lower number both in miles and budget than what PG&E requested, the CPUC has granted a historic amount of undergrounding, and this decision strikes a balance between the pace at which PG&E can actually deploy wildfire mitigation equipment, the cost to ratepayers, and the overall impact.

Notably, PG&E has only mitigated risk on about 9% of its entire service territory. Since undergrounding has long-lead times, PG&E’s proposal to heavily rely on undergrounding would have left millions of customers exposed to elevated wildfire risks in the interim. The CPUC agreed with our Office’s recommendations that PG&E may struggle to underground 2,000 miles of electric lines based on historic trends.

There is no question that undergrounding is the most effective way to reduce wildfire risk. However, undergrounding as the sole approach to reduce wildfire risk is simply not the best option – not for customers and not for PG&E. It is the slowest, most expensive way to do so. For the cost of undergrounding 1 mile of power lines, a utility can protect almost 4 miles with covered conductors. Covered conductors generally only take 1-2 years to install compared to 3-4 years for undergrounding and is approximately one-third of the cost. 

The Public Advocates Office’ Safety Branch, which consists of analysts and engineers who specialize in assessing utility safety programs, is in support of the decision from the CPUC regarding a revised undergrounding approach in which high-risk areas are prioritized for undergrounding and covered conductors are used in other areas. This approach ensures we quickly and affordably maximize reduced risk of wildfire for customers overall. 

If you have any questions regarding PG&E’s general rate case, undergrounding, or relevant issues, please reach out to Mary Flannelly at mary.flannelly@cpuc.ca.gov.