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PG&E’s $5B NatGas Rate Hike Seeks to Upgrade Transmission, Storage

San Francisco-based Pacific Gas and Electric Co. (PG&E) on Friday asked California regulators for approval to increase natural gas utility rates by $5.22 billion in the 2019-2021 period to cover a suite of safety-related enhancements to its extensive transmission pipeline and storage system, one of the nation's largest.

The California Public Utilities Commission (CPUC) required PG&E to submit a three-year rate request for its gas transmission/storage (GTS) operations before the end of the year.

PG&E stressed that the proposal concentrates on "innovative gas safety technology," such as advanced robotics to inspect the interior of pipelines, and would improve the overall pipeline safety in anticipation of natural disasters like earthquakes.

For the typical residential gas utility customer, the increase, if approved, in 2019 would amount to $1.11/month, while a typical small business customer would see a monthly rate hike of $6.65.

Part of the three-year effort also addresses the state's push to upgrade gas storage safety since the major storage well leak two years at Aliso Canyon in Southern California.

In the rate filing, PG&E is proposing to close two small underground gas storage facilities and concentrate on the three largest. The closure "reflects customer demand and changing regulations," which would save millions over the next 20 years, a spokesperson said.

PG&E’s GTS operations have been under close scrutiny by the CPUC, elected officials and the general public since the 2010 transmission pipeline failure and explosion in San Bruno, a residential neighborhood south of San Francisco, which killed eight people and injured scores of others.

PG&E President Nick Stavropoulos said the combination utility is focused on strategic investments to improve gas safety and reliability while providing customer savings.

"This rate request prioritizes infrastructure and technology investments,” he said.

Measures outlined in the rate filing include:

  • Adding 80 automated and remotely operated valves to turn off gas in emergencies or natural disasters;
  • Upgrading more than 1,100 miles of pipelines to accommodate advanced robotic devices, or pigs, to inspect the inside of pipelines;
  • Completing more than 2,100 miles of in-the-pipe pigging inspections;
  • Testing the safe pressure operations in 240 miles of transmission pipelines; and
  • Improving safety at three underground gas storage facilities.

PG&E's existing network of 260 automated pipeline valves would be augmented by upgraded overall system safety and streamline the gas operations.

Regarding storage, PG&E said the proposal to upgrade and streamline operations was being "responsive to the new regulations and shifting market conditions while providing customers with substantial savings in the long-term without impacting safe or reliable service."

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