California’s biggest utility plans to bury 10,000 miles of power lines. How much will that cost residents?

Wildfires and other climate disasters are pushing PG&E to put lines underground, but it’s a notoriously expensive process.

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Three days after Pacific Gas & Electric revealed that its equipment had likely ignited another major wildfire, the California utility announced that it will shift an unprecedented 10,000 miles of overhead wires underground in the areas of highest fire risk across its territory.

Undergrounding is too expensive not to do,” said PG&E CEO Patti Poppe at a July 21 press conference near the Northern California town of Chico in Butte County.

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Poppe, wearing a bright green PG&E safety vest, spoke as dark clouds of smoke from the Dixie fire billowed in the background. As of August 5, the fire had spread to more than 322,000 acres in Butte and Plumas counties, destroyed the small town of Greenville and more than 60 other structures, and was only 35 percent contained.

It is the biggest fire currently burning in California and was probably started by a 70-foot tree leaning on a PG&E circuit on July 13. The utility’s power lines have been found at fault for starting numerous blazes over the past five years, including the November 2018 Camp fire, the state’s deadliest to date, which caused more than $10 billion in damages and pushed the utility into bankruptcy in early 2019.

Now as the utility charts its post-bankruptcy course, it’s looking to bury power lines as a way to prevent more such future disasters. PG&E estimates that the cost to trench and underground 10,000 miles of its 25,000 miles of wires in fire-prone areas will be between $15 billion and $20 billion.

Some industry observers regard the estimate as suspect, not only because the project path encompasses some challenging terrain but also because a detailed proposal has not yet been released. Poppe revealed during the July 21 press conference that the project has been in the works for some time, although the utility had planned to hold off on the announcement until later this year. 

Financial analysts probed Poppe for project specifics during PG&E’s July 29 earnings call. We’ve got absolute evidence of the $2‑million-a-mile real-time happening as we speak, and we know that that’s even before we have a full-scale program,” she responded.

Poppe was referring to the utility’s recent undergrounding of 70 miles of overhead cables as part of a 300-mile project in Butte County, which had previously suffered significant damage from fires sparked by PG&E lines. Poppe stressed that trenching efficiency and other technological improvements are expected to continue given the economies of scale entailed in the proposed undergrounding project.

But the utility’s claims are raising concerns elsewhere.

We have no confidence PG&E will put the right lines in the right place and ensure they are properly buried and protected, including from earthquakes and flooding,” said Mark Toney, head of The Utility Reform Network consumer advocacy group, during a recent phone interview.

TURN is not against undergrounding, he said. But in the absence of a detailed plan, he wondered what PG&E’s sound and fury signifies.” The ratepayer advocate estimates the undergrounding tab at roughly $40 billion.

The climate crisis changes the calculus

Whether PG&E’s $20 billion cost estimate is a pipe dream depends on many variables. Terrain is a big one — whether the ground is rocky or steep, how heavily vegetated it is, population density and required environmental and disability protections.

Though it’s currently unknown how the costs and benefits will stack up, it is clear that the climate crisis has changed the stakes for undergrounding, in California and elsewhere.

The pressure of climate change likely makes the costs more favorable,” said Neil Weisenfeld, senior energy resilience expert at consulting firm ICF, during a recent phone interview. But Weisenfeld, a utility engineer who worked for Consolidated Edison in New York for 35 years, also noted that it was not a cost-benefit analysis that drove PG&E’s decision.

It is a call to action to do the right thing in the [face of the] overwhelming forces that climate change is presenting,” he said.

PG&E’s wildfire liability is also a major driver for action. PG&E’s second bankruptcy reorganization cost $58 billion, and it only dealt with claims from fires the company sparked in 2017 and 2018, including the Camp fire that wiped out the town of Paradise and killed 85 people. PG&E is on shaky financial ground post-bankruptcy, and any new fires caused by its equipment could subject it to significant financial risk.

The same day as PG&E’s recent earnings call, the Shasta County district attorney’s office announced it would file criminal charges against the utility for sparking last year’s Zogg fire. PG&E had previously settled some of the civil charges arising from this fire that killed four people, destroyed 204 buildings and torched 56,000 acres. The utility also faces litigation over other fires, including a 2019 fire near Geyserville in Northern California, and its extensive power shutoffs in 2019. And an investor class-action suit accuses the company of misrepresenting how much vegetation it had cleared from its lines.

Image credit: U.S. Bureau of Land Management

Buried power lines aren’t subject to high winds that can cause them to fall and spark fires, and they don’t come into contact with falling trees, windblown tree limbs and other sparking hazards, making them inherently safer than overhead lines. But undergrounding 10,000 miles of overhead line conversions will only happen if the hefty price tag can be justified. 

PG&E’s wildfire system-hardening costs combined with vegetation management costs, per mile, are on par with the cost of undergrounding, but the wildfire risk reduction is more significant with undergrounding,” PG&E spokesperson Ariana Vanrenen wrote in a recent email. The company plans to spend $1.5 billion this year to remove 300,000 trees and perform tree-trimming. 

Poppe stressed during the call with financial analysts that undergrounding not only reduces annual vegetation clearance requirements but is also a safer permanent fix,” avoids safety shutoffs and saves the trees we love.”

The pros and cons of undergrounding

The benefits of undergrounded cables also include avoiding downed lines in storms, decreasing the number of accidents involving cars crashes into poles and reducing equipment-related electrocutions. Taking overhead lines and putting them out of sight underground is also aesthetically pleasing. 

Aside from cost, the other big drawback is that while outages on underground cables are far less numerous and frequent, they usually take longer to locate and repair.

You can’t fly a drone underground,” TURN’s Toney noted.

Many utilities across the country have put overhead lines underground after their infrastructure was damaged by intense hurricanes or whopper wind and ice storms — or, like PG&E, because their equipment ignited devastating fires. Some of the utilities revealed the per-mile average cost, but none would reveal the total undergrounding tab spent to date.

After its equipment sparked three extensive and deadly fires in 2007, San Diego Gas & Electric undergrounded 30 miles of line in high fire danger areas. It has spent $3 billion to both underground and harden its system covering 4,100 square miles, with the cost per mile to underground in both urban and rural areas about $2.9 million per mile, Candace Hadley, a utility spokesperson, wrote in an email. SDG&E has also undertaken other undergrounding projects or is about to begin them in five communities, Hadley added.

Deadly hurricanes in Florida motivated Florida Power & Light to underground lines to avoid extensive blackouts and equipment destruction. From 2006 through the end of this year, it will have spent $5 billion on both undergrounding and steeling its system against powerful storms, spokesperson Marie Bertot said during a recent phone call. She declined to separate out undergrounding costs or provide the range of per-mile costs, but she did note that buried lines have performed 85 percent better than overhead ones during hurricanes.

Utility AEP has more than 35,000 underground line miles out of more than 220,000 distribution line miles across its 11-state service territory, spokesperson Tammy Ridout wrote in an email. She did not disclose the cost or timeframe but noted the company has to weigh the higher costs of undergrounding with other site-specific needs and risks, and work with our regulators to determine the best solutions for customers.”

Chicago utility ComEd referred queries about undergrounding to the utility trade group Edison Electric Institute. 

EEI in 2012 released a comprehensive national study on the range of utility undergrounding costs. It concluded that undergrounding high-voltage and distribution lines is five to 10 times more costly than placing them overhead, making it probably prohibitively expensive.”

That 2012 report estimated PG&E’s undergrounding costs at $3.4 million to $6.1 million per mile. SDG&E’s were estimated at $2.64 million to $3.69 million per mile, comparable to its recent estimate of $3 million a mile. The report’s estimated cost for California’s other investor-owned utility, Southern California Edison, which also has sparked devastating blazes, was $1.85 million to $5.2 million per mile.

In early 2019, SCE said its per-mile cost was around $3 million. That contrasts with $430,000 per mile for covered conductors, which is a key fire-reduction risk measure being used by all three utilities. Pedro Pizarro, the CEO of SCE parent company Edison International, said on a July 29 earnings call that the utility would focus its efforts on protecting its overhead lines, since covered conductors are an optimal tool in terms of risk reduction and affordability.” 

However, SCE says it continues to consider undergrounding where it makes sense and always takes the wildfire risk into consideration. The company has identified up to 17 miles of undergrounding for 2021 – 22” in high fire risk areas, according to spokesperson Reggie Kumar. Over the years, SCE has undergrounded more than 7,000 miles of its 16,700 miles of distribution lines in its high fire threat regions, he said. PG&E, by contrast, has buried about 3,000 miles of overhead lines in its 25,000 miles of fire-prone areas, Vanrenen said.

The Edison Electric Institute declined to say when the report would be updated and whether the 2012 estimates are still close to the mark today. Much has changed since then, including the many fires ignited by the equipment of PG&E and its fellow California investor-owned utilities over the last few years. 

But the group’s 2012 report pointed out that undergrounding lines in new developments is far less costly because it can be carried out in tandem with the construction of other basic infrastructure. Thus, it is not surprising that nearly all new residential and commercial developments in the United States are served with underground electrical facilities.”

Assessing PG&E’s $2 million per mile quote

ICF’s Weisenfeld does not think PG&E’s $2‑million-per-mile estimate of line conversions is farfetched. He noted that its undergrounding costs in 2017 were reported at $3 million, and since then it has seen major technical and efficiency gains in its undergrounding work.

PG&E COO Adam Wright highlighted that the utility recently undergrounded an unprecedented 1,250 feet in one day, up from a daily average of 200 feet. Poppe added that new technological breakthroughs have allowed the company to bore through granite. The foreseeable or hoped-for target is 1,000 miles of undergrounding a year with new partnerships in place, but PG&E declined to put a timeframe on the 10,000-mile power line conversion project.

Weisenfeld and PG&E are quick to acknowledge that there are significant challenges ahead. Wright said the undergrounding work requires Marshall Plan – like planning.

Improved planning is vitally important for keeping a lid on costs, including detailed mapping that reveals the terrain that may be trenched. PG&E can also perform due-diligence assessments of potential partner companies to ensure they are skilled and can scale up their workforces, using its financial clout and partnerships to improve cable and trenching technologies.

PG&E also needs to find synergies, including piggybacking on trenching for gas lines and telecommunications fiber-optic cable where possible, added Weisenfeld. But he warned that working with other utilities can be a nightmare” because they operate on different systems, processes and timelines. Coordination within PG&E for gas and electric infrastructure, as well as establishing collaborations with other utility companies early on, is the key to success, he said. 

PG&E has faced heavy fines and sanctions imposed by regulators and a federal court for failing to adequately clear trees and vegetation around its power lines, which raises doubts about how successful and cost-effective its undergrounding project will be. Toney said the utility’s ratepayer-funded vegetation management plan has long been deficient and error-prone, as has its pole-replacement program. He added that undergrounding work falls into the category of capital expenditures, which earns PG&E shareholders a rate of return exceeding 10 percent. He suggested that shareholders should take a cut on that rate of return to reduce costs to ratepayers.

In February, PG&E will detail the projected cost and operational plans for the first two years of the massive undergrounding project as part of its mandated Wildfire Mitigation Plan update to be filed at the California Public Utilities Commission, according to Poppe.

The CPUC continues to prioritize public safety and has established processes for considering PG&E’s proposal, once filed,” commission spokesperson Terrie Prosper said in an email. Regulators will work with PG&E and other stakeholders to ensure that the utility is making safety investments that are in the best interest of its customers and all Californians.” 

While the costs of PG&E’s undergrounding project will be high, they may well pale in comparison to the costs of its power lines sparking even one more major wildfire. The question for PG&E and its regulatory watchdogs is whether it can do the job right.

(Lead photo by Tim Foster / Unsplash)

Elizabeth is cofounder and managing editor of California Current. She has reported on energy, the climate crisis, water and health issues for various publications and organizations.