backfilling, we're paving.

And after that will come electric construction.

Here in Arnold, California, Pacific Gas and Electric is

working to bury power lines underground.

This is an expensive but surefire way to practically

eliminate the risk of utility-caused wildfires,

which have devastated towns throughout California.

And a Hawaii utility could also be the cause of Maui's

recent deadly blazes.

We're coming off of a historic drought, and those

conditions are materially different than the

conditions that we saw just ten short years ago.

And so now is absolutely the right time to be taking

bold, decisive action with regard to the grid safety

and grid's resiliency and scaling this underground

program to eliminate wildfire risk.

The infamous Camp Fire of 2018 sparked when high winds

knocked over a poorly maintained PG&E transmission

line. The resulting blaze destroyed the town of

Paradise, California, killing 85 people.

PG&E was found liable, and the massive cost drove the

nation's largest utility into bankruptcy, from which

it emerged in 2020.

But just a year later and in the same county, PG&E

equipment started another catastrophic fire, prompting

the utility to announce plans to move 10,000 miles

of distribution lines underground. It's an

ambitious goal that Martin says would reduce ignition

risk by 98%.

But undergrounding just one mile costs anywhere from

$1.8 to $6 million.

The total plan would likely be in the tens of billions,

and that bill would be footed by PG&E's customers,

who already face some of the highest rates in the

nation.

It's very expensive to live in this state, and people

are already spending a lot of their money on keeping

the lights on, keeping their heat on on a cold

night, you know, keeping their medical devices

running. If we keep pushing up electricity rates, the

most vulnerable of us are not going to be able to pay.

But though it's expensive, burying power lines isn't

new. It's common practice in city centers, where

overhead lines would be obstructive, and more common

in Europe, where cities tend to be denser.

41% of medium- and low-voltage power lines in

Europe are buried, and in Germany and the Netherlands,

nearly all of them are. Only about 18% of

distribution lines in the U.S. are underground, though

for both safety and aesthetic reasons, almost

all the new lines that are built are now buried.

So while our other underground lines were

primarily in more urban areas of our service

territory, this program is exclusively focused on the

highest risk areas in our service territory, getting

the lines out of the air and eliminating ignition

risk.

In general, overhead power lines are not insulated, as

that also comes at a cost.

When you look at our overhead wire, it's bare

wire. And that's why we've got such concerns about

that, is that if the tree falls into that and that

bare wire, that is where the risk comes from.

Basically, whenever the electricity in an energized

line has a direct path to the ground, be that through

a tree that's fallen on a line or a line that's fallen

on vegetation, that's when fires start.

So during storms and times of high wildfire risk,

utilities have few good options.

One option is to essentially just shut down the power

line, because if there is no voltage and no current on

the line, there is no chance of this release of

energy happening and then there is no chance of an

ignition. So shutting them down is a very disruptive

option. It is being used quite widely in California,

but it's really a very disruptive option.

PG&E has been implementing public safety power shutoffs

in California since 2019, impacting millions of

people. But as disruptive as this option is, it does

work. Hawaiian Electric, the utility that could be

found liable for the Maui wildfires that killed at

least 98 people, was criticized for not shutting

off power in advance of high wind warnings.

If the company is determined to be at fault,

it doesn't have nearly enough money to pay off

residents' damage claims.

Looked at this way, undergrounding is

undoubtedly cheaper than dealing with the massive

costs of deadly wildfires and undoubtedly less

disruptive than shutting off power completely.

When a line is put underground, ignition risk

is reduced by about 98%.

So for this one time capital investment, we're

essentially eliminating the risk of ignition from an

overhead power line by placing it underground.

Martin says that you also eliminate vegetation

management costs and many maintenance costs as well,

since underground wires aren't exposed to the

elements.

So everything underground is actually got a sheathing on

it. There's no bare wire, and it's actually protected

and made to be there for a long time.

We don't want to put it in twice. We want to put it in

once.

Undergrounding doesn't mean getting rid of all the poles

and wires that we're so familiar with, though.

What's going to move underground are our primary

lines, and they're the highest risk lines that you

see. They'll go underground along with the transformers.

The transformers will come off the pole, and in the

case of the project today will be pad-mounted.

And what will remain is communication lines, if

there are any, and the poles that those

communication lines are on, as well as secondary lines

and service lines to our customer's homes.

PG&E is not alone in its efforts.

San Diego Gas & Electric has a plan to underground

about 1,450 miles of line through 2031, while Florida

Power & Light is undergrounding select lines

for hurricane protection.

Austin Energy is also exploring undergrounding in

the wake of a winter ice storm that caused weeks-long

outages, and the federal government has pledged to

provide $95 million to Maui to harden its electric grid,

work that could include undergrounding lines.

But PG&E's proposed plan is far more ambitious and

expensive than any other in the nation.

Under this plan, which the California Public Utilities

Commission will vote on in November, PG&E will start by

undergrounding 2,100 miles of line through 2026 at a

total cost of about $5.9 billion.

We anticipate requesting full approval for all 10,000

miles in an upcoming filing with our regulators in 2024.

If PG&E's overall four year spending plan, which

includes funding for numerous other safety

initiatives and infrastructure investments,

is approved, a typical customer can expect to see

an average increase of $44.26 in their bill every

month through 2026.

The utility says that undergrounding efforts will

account for just $3.40 of this, but the CPUC has since

released two cheaper, alternate proposals for

consideration, which greatly cut back on

undergrounding. One calls for moving just 200 miles

underground and insulating 1,800 miles with covered

conductors, while the other involves undergrounding 973

miles and insulating 1,027 miles.

Both proposals would save customers money, but would

ultimately put PG&E's 10,000 mile goal in

jeopardy, and possibly customer safety too, since

PG&E says that insulating lines is only about 65%

effective at reducing wildfire risk.

If a tree falls on the line, the line is going to break

and you're still going to have a risk of a spark, and

you would still have a chance of starting a

wildfire, even if the line is insulated.

The Utility Reform Network supports the plan to

underground 200 miles, and estimates the cost of

insulation to be about $800,000 per mile, as

compared with the $3.3 million per mile that PG&E

spent on undergrounding in 2022.

By relying more heavily on insulated lines, we can do

the work faster and we can deliver that wildfire safety

more quickly to those different communities.

Morsony notes that the nation's second largest

utility, Southern California Edison, has

embraced insulation as a wildfire mitigation

strategy, aiming to install covered conductors on over

7,200 miles of overhead lines by the end of 2025.

But because PG&E earns a guaranteed rate of return on

capital investments, the utility is inherently

incentivized to undertake more expensive

infrastructure projects like undergrounding.

The larger the investment, the larger the profit for

PG&E and its shareholders.

This model is actually how the utility makes money, not

by selling electricity or gas.

Undergrounding costs a lot of money, it's a large

investment. So that would increase the revenue that

the utilities collect.

So that might give them an incentive to go for this

type of investment rather than other solutions.

Now the question is would these other solutions be as

effective as those big investment projects?

That's where the regulators have to step in.

However utilities choose to proceed, it's abundantly

clear that there's a need to act quickly to address

the risk of wildfire, especially as the American

West tries to recover from a decades-long drought.

While the CPUC's impending decision will impact how

extensive a role undergrounding will play in

PG&E's overall risk mitigation strategy, the

utility did already move 73 miles underground in 2021,

180 miles underground in 2022, and 350 miles so far

this year.

There are about 20 counties that we anticipate will have

meaningful amounts of undergrounding over the

course of the coming years.

And what we're seeing is that utilities across the

country are recognizing the need for an ever more

resilient electric grid.

So in the Southeast, for example, hurricane risk is

very real. In the Northeast, storm risk, the

same in the Midwest.

Fires are prevalent not just in California, but all

the way up the West Coast and into the Rocky

Mountains.

As extreme weather like this becomes more common, and the

nation moves towards clean energy generation, utilities

everywhere will be making major investments to adapt.

Undergrounding power lines is just one of many

strategies, but it exemplifies that tough

balance that utilities and regulators will need to

strike as they pursue safety, reliability and

affordability.

The question of how much we should invest in

undergrounding and allowing electricity rates to

increase, really is also not only a question for

electrical engineers or companies like PG&E to be

answered. It's really a societal question as well.

How do we maintain access to power while also keeping

it affordable, I think is a very important question.