Dive Brief:
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PG&E, the corporate parent of Pacific Gas & Electric, says California’s energy policies are going to drive capital expenditures in both the electric distribution and transmission systems, Platts reports.
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The company expects to spend $5.6 billion this year, including $2 billion on distribution, $1.2 billion on transmission and $700 million on generation, with annual investments ranging from $5.4 billion to $6.4 billion over the next three years.
- In addition to ratebased investments, the company also cited strategic alliances, such as the deal it struck with TransCanyon to jointly pursue competitive transmission opportunities.
Dive Insight:
The energy landscape is changing rapidly for Pacific Gas & Electric, but the company sees opportunity in some of those changes.
In June, PG&E announced plans to close its two nuclear reactors at Diablo Canyon in 2024 and 2025 and replace that capacity with a combination of renewable energy, energy efficiency and energy storage. As part of the settlement over the closure, the utility agreed to boost to renewable energy target to 55% by 2031, outpacing the state’s 50%-by-2030 renewable target.
The growth of renewable energy in the state is going to require collateral investment in infrastructure support. “We’re going to have to continue to upgrade the distribution grid to sport increasing levels of distributed resources, and we’ll need new and upgraded transmission lines to support the utility scale renewables required to meet the higher RPS standards,” PG&E CEO Tony Earley said during an earnings conference call.
During the conference call, Earley noted that PG&E planned to file a transmission rate case requesting $100 million in capital expenditures. The utility is also looking at partnerships to bolster its infrastructure and its earnings.
Last month, PG&E joined with General Electric in a pilot program to test smart inverters, residential battery storage and GE’s Distributed Resource Management System (DERMS).
PG&E has also put a plan before state regulators under which it would put the cost of installing thousands of electric vehicle charging stations into ratebase. The plan faces resistance from third parties who hope to win some of that market.