Pacific Gas and Electric Company

Pacific Gas and Electric Company

:"For the 1970s rock music band, see Pacific Gas & Electric (band).":"PG&E" redirects here. For the Portland, Oregon electric utility, see Portland General Electric."Infobox_Company
company_name = Pacific Gas and Electric Company
company_type = Public (nyse|PCG)
foundation = 1905
location = flagicon|USA San Francisco, California, USA
key_people =
industry = Electricity
Natural Gas
products = Electricity
Natural Gas
market c
US$ 14.92 Billion ("As of Sep 12, 2008")
revenue = profit US$13.237 Billion (2007)cite web |title=PG&E Corp 2007 Annual Report |url=]
operating_income = profit US$2.114 Billion (2007)cite web |title=PG&E Corporation 2007 Annual Report |url=]
net_income = profit US$1.006 Billion (2007)cite web |title=PG&E Corporation 2007 Annual Report |url=]
num_employees = 20,000(2007)cite web |title=PG&E Corporation 2007 Annual Report |url=]
homepage = []

The Pacific Gas and Electric Company (PG&E), (nyse|PCG) is the utility that provides natural gas and electricity to most of Northern California. The southern part of the state is generally served by Southern California Edison for power and natural gas from Southern California Gas. PG&E was founded in 1905 and is currently headquartered in the Pacific Gas & Electric Building in San Francisco.


San Francisco Gas

In the 1850s, manufactured gas was being introduced as means of lighting for the first time and coal gasification works were being built in the larger eastern American cities. San Francisco pioneer foundryman and blacksmith Peter Donahue and his brothers established a foundry below North Beach, and later in the south of Market area. The foundry would become the Union Iron Works, the greatest industrial concern in 19th century San Francisco. Donahue learned all he could about gas manufacturing and with his brother James and a young engineer named Joseph G. Eastland incorporated the San Francisco Gas Company on August 31, 1852. The original location for the gas works was bounded by First, Fremont, Howard and Natoma streets south of Market, on the then shore of the San Francisco Bay. On the night of February 11, 1854, the streets of San Francisco were for the first time lighted by gas, and a banquet was held at the Oriental hotel. In a year, the company had convert|12|mi|km of street mains, thousands of gas streetlights, two gas holders at First and Howard with a combined capacity of convert|160000|cuft|m3 and a monopoly of city gasification contracts. The cost of gas was billed at 15 dollars per thousand cubic feet, where no meters were installed, the price was estimated from the size of the burners. Shortly thereafter, the Citizens Gas Company was given a fifty year franchise by the state legislature but when the company was built and ready to deliver gas, it sold out to the San Francisco Gas Company.

In April 1870, the City Gas Company was organized and built its works on the Potrero Point shoreline. Another company, the Metropolitan Gas Company, was established but was not a success, and it was quickly purchased by the San Francisco Gas Company.

San Francisco Gas Light

All these companies were merged with larger infusions of capital into the San Francisco Gas Light company in 1873. A rival company, the Central Gas Company, came into existence in 1882 and the rate for gas went as low 0.90 cents a thousand cubic feet. The Central and the Pacific Gas Improvement Company were merged into the San Francisco Gas and Electric Company, (SFG&E Co.) September 1, 1903.

Rapid technological improvements in the processes of manufacturing gas were immediately adopted by the company. When petroleum was produced in California, the manufacture of water gas, then in general use in eastern and midwest states, began in San Francisco.

Water gas was first made from anthracite coal brought around Cape Horn from Swansea in Wales and enriched with California petroleum. The first water gas works, a thoroughly modern plant, was established at Potrero Point and the manufacture of water gas was a success due to the increased amount of petroleum available that reduced costs. The company then acquired land in North Beach at Bay, Laguna and Webster streets, and in 1891, the North Beach Gas Works was built. For many years this facility, with its convert|2|Mcuft|m3 gas holder, was considered the finest gas works in the world. The original plant at Howard Street was dismantled.

San Francisco Gas and Electric

In December, 1896, the San Francisco Gas Light Company merged with the Edison Light and Power Company under the new title San Francisco Gas and Electric Company and this company existed until 1903 and then dissolved.

Other companies that started in the business in active competition but eventually merged into the SFG&E co. were the Equitable Gas Light Company and the Independent Electric Light and Power and the Independent Gas and Power company, founded by Claus Spreckels, the king of California sugar.

Pacific Gas and Electric company 1905

The company known as Pacific Gas and Electric incorporated on October 10, 1905, as a consolidation of more than two dozen power and water concerns around the state. PG&E went on to consolidate power in northern California and by 1952 represented 520 companies merged.

By 1906, the exclusive use of petroleum for manufactured gas was catching on and a 4,000,000 cubic feet gas-oil unit was built at the Potrero Gas Works. A similar unit had been built at the Martin Station in Visiticion Valley on the San Mateo border and was connected to the Potrero works by a convert|12|in|mm|sing=on high pressure pipe for use in San Francisco. At around the same time, hydroelectric power was established in California at the Colgate power plant on the Yuba River which began to deliver power for agriculture. In 1905, Pacific Gas and Electric Company was formed by a merger of the SFG&E Co. and the California Gas and Electric Corporation. The 1906 earthquake destroyed the North Beach Gas Works but the Potrero works were unaffected and along with the Martin Station, supplied the city after the Great fire. In 1912 PG&E began installing meters to free itself from the previous flat rate billing scheme.

PG&E began delivering natural gas to San Francisco and northern California in 1930 through the longest pipeline in the world, connecting the Texas gas fields to northern California with compressor stations that included cooling towers every convert|300|mi|km, at Topock on the state line, and near the town of Hinkley, California. With the introduction of natural gas, the company began retiring its polluting gas manufacturing facilities, though it kept some plants on standby.


1906 also marked the year that PG&E purchased the Sacramento Electric, Gas & Railway Company. The history of the PG&E streetcar lines in Sacramento goes back to the Sacramento City Street Railway, a convert|5|ft|m|sing=on gauge horsecar railway that operated convert|9|mi|km of street railway in Sacramento in the late 1800s. The Sacramento Street Railway was purchased by the Sacramento Electric, Power and Light Company Electric Railway. In 1896, the Sacramento Electric, Power & Light Company Electric Railway was purchased by the Sacramento Electric, Gas & Railway Company. In 1906, PG&E acquired the line and in 1915 PG&E operated the line under the PG&E name. PG&E's streetcars had lines such as the "#6 - Oak Park Line". In 1943, PG&E sold the lines to Sacramento City Lines which ended up in the hands of the National City Lines. National City Lines converted several streetcar lines in that era to bus service and the track was abandoned on January 4 1947. [*cite book |author=Fickewirth, Alvin A. |title=California Railroads |location=San Marino, California |publisher=Golden West Books |year=1992 |pages=117 |id=ISBN 0-87095-106-8]

North American Company

By 1940, PG&E had become one of four major direct operating company subsidiaries, out of a group of ten major direct subsidiaries, that were controlled by North American Company. In eight of the ten direct subisidaries, North American owned at least 79% stake. By 1940 North American was a US$2.3 billion holding company heading up a pyramid of by then 80 companies. [ U.S. Supreme Court decision, NORTH AMERICAN CO. v. SECURITIES AND EXCHANGE COM'N, 327 U.S. 686 (1946)] , Decided April 1, 1946,]

North American's stock had once been one of the twelve component stocks of the May 1896 original Dow Jones Industrial Average.Jeremy J. Siegel, "Stocks for the Long Run", McGraw-Hill, Second Edition, 1998, ISBN 0-07-058043-X] North American Company was broken up by the Securities and Exchange Commission, following the United States Supreme Court decision of April 1, 1946.

Postwar era

In the post war era, PG&E went on a massive building spree, creating 14 new hydroelectric plants and 5 steam plants.

As of December 1992, PG&E operated 173 electric generating units and 85 generating stations, convert|18450|mi|km of transmission lines and convert|101400|mi|km of distribution system.

In the later 1990s, under electricity market deregulation this utility sold off most of its natural gas power plants. The utility retained all of its hydroelectric plants, the Diablo Canyon Nuclear Power Plant and a few natural gas plants, but the large natural gas plants it sold made up a large portion of its generating capacity. This had the effect of requiring the utility to buy power from the energy generators at fluctuating prices, while being forced to sell the power to consumers at a fixed cost. However, the market for electricity was dominated by the Enron Corporation, which, with help from other corporations, artificially pushed prices for electricity ever higher. This led to the California electricity crisis that began in 2000 on Path 15, a transmission corridor PG&E built.

With a critical power shortage, rolling blackouts began on January 17, 2001.


With little generating capacity of its own, and unable to sell electricity to consumers for more than it could buy it on the open market, PG&E was forced to enter Chapter 11 bankruptcy April 6, 2001. The State of California bailed out the utility, the cost of which worsened an already bad state budget situation. This played an important part in the eventual recall of California Governor Gray Davis.

PG&E emerged from bankruptcy in April 2004, after distributing $10.2 billion to hundreds of creditors. Its 4.8 million electricity customers are expected to pay an average $1,300 to $1,700 each in above-market prices through 2012.

PG&E was one of the most profitable companies on the Fortune 500 list for 2005 with $4.5 billion in profits out of $11 billion in revenue.

Generation Portfolio

PG&E's utility-owned generation portfolio consists an extensive hydroelectric system, one operating nuclear power plant, one operating natural gas-fired power plant, and another gas-fired plant under construction. Two other plants owned by the company have been permanently removed from commercial operation: Humboldt Bay Unit 3 (nuclear) and Hunters Point (fossil).

Hydroelectric facilities

PG&E's hydroelectric portfolio is the largest under private ownership in the United States. Drawing water from approximately 100 reservoirs along 16 river basins, its maximum electric output is 3,896 MW.

The single largest component is the Helms Pumped Storage Facility, located in Fresno County, California. Helms consists of three units, each rated at 404 MW, for a total output of 1,212 MW. The facility operates between Courtright and Wishon reserviors, alternately draining water from Courtright to produce electricity when demand is high, and pumping it back into Wishon when demand is low. The power house itself is situated more than convert|1000|ft|m inside a solid granite mountain.

Nuclear facilities

The Diablo Canyon Power Plant, located in Avila Beach, California, is the only operating nuclear asset owned by PG&E. The maximum output of this power plant is 2,190 MW, provided by two equally-sized units. As designed and licensed, it could be expanded to four units, at least doubling its generating capacity. [Statement made repeatedly by Dr. Bill Wattenburg during his weekly radio show in 2007 and 2008, broadcast on radio station KGO out of San Francisco, California.]

The company also maintains the Humboldt Bay Nuclear Power Plant in Eureka, California. It is the oldest commercial nuclear plant in California and its maximum output was 65 MW. The plant operated for 13 years, until 1976 when it was shut down for seismic retrofitting. New regulations enacted after the Three Mile Island accident, however, rendered the plant unprofitable and it was never restarted. Spent fuel has been and is currently stored at the plant's spent fuel pool, though PG&E has received a license from the Nuclear Regulatory Commission to construct and operate a dry cask storage for the site.

Fossil facilities

There are also two conventional fossil fuel units at the Humboldt Bay power plant, which currently operate on natural gas and produce 105 MW of combined output. These units, along with two 15 MW peaking units, are scheduled for retirement in 2009. PG&E is currently building 163 MW of new gas-fired generation capacity on the same site, .

As part of a settlement with Mirant for alleged market manipulations during the 2001 California energy crisis, PG&E took ownership of a partially-constructed natural gas unit in Antioch, California. The unit, known as the Gateway Generating Station, is scheduled to completed by PG&E and placed into operation sometime in 2008. It will produce approximately 530 MW.

On May 15, 2006, after a long and bitter political battle, PG&E shut down its 48-year-old Hunters Point power plant in San Francisco. At the time of closure, the maximum output of the plant was 170 MW. Residents of the impoverished neighborhood had been pushing for more than a decade to close the plant, claiming it contributed to above average rates of asthma and other ailments.

Solar Facilities

On April 1, 2008, PG&E announced contracts to buy three new solar power plants in the Mojave Desert. With an output of 500 MW and options for another 400 MW, the three installations will initially generate enough electricity to power more than 375,000 homes. [ [ PG&E backs 3 solar plants in the Mojave] by David R. Baker, San Francisco Chronicle, April 1, 2008]

PG&E Power Content


* President and CEO - Peter Darbee (Executive)

PG&E and the Environment

Beginning in the mid-1970s, regulatory and political developments began to push utilities in California away from a traditional business model. In 1976, the California State Legislature amended the Warren-Alquist Act [ [ Full text of the Warren-Alquist Act, see section 25524.2] ] , which created and gives legal authority to the California Energy Commission, to effectively prohibit the construction of new nuclear power plants. The Environmental Defense Fund (EDF) filed as an intervenor in PG&E's 1978 General Rate Case (GRC), claiming that the company's requests for rate increases were based on unrealistically high projections of load growth. Furthermore, EDF claimed that PG&E could more cost-effectively encourage industrial co-generation and energy efficiency then build more power plants. As a result of EDF's involvement in PG&E's rate cases, the company was eventually fined $50 million by the California Public Utilities Commission for failing to adequately implement energy efficiency programs.

Recently, the CEO of PG&E Corporation, Peter Darbee, and the CEO Of PG&E Company, Tom King, have publicly announced their support for California Assembly Bill 32, a measure to cap statewide greenhouse gas emissions and a 25% reduction of emissions by 2020. The bill was signed into law by Governor Arnold Schwarzenegger on September 27, 2006.

Since Darbee took control of the corporation in 2004, PG&E has been aggressively promoting its green image. In San Francisco, where the utility has repeatedly fought public power ballot initiatives, PG&E has launched a campaign dubbed [ "Let's Green This City"] . Community organizers have countered with a [ Lets Green WASH This City] campaign focused on PG&E's power containing <1% solar and 2% wind.

PG&E and its predecessor companies have left a wide swath of polluted land in California from the by-products of its operations. It has also left significant land disturbances from its building of roads, power towers, power line rights of way and generating facilities. Fact|date=September 2008

The cover-up and legal case in Hinkley (1993-1996)

When natural gas was introduced in the west, an extensive network of pipelines from the southwest fields was built to ship gas from Texas to northern California. These pipelines required repressurization stations approximately every three hundred miles. The town of Hinkley was one such site. In 1993, PG&E was accused of contamination of drinking water with toxic hexavalent chromium in the Southern California town of Hinkley. The chemical was used in water cooling towers to prevent scale and rust. PG&E had alerted the townsfolk earlier about the chromium but said that it was nothing to worry about, saying that chromium was in many multivitamins. However, many illnesses were linked to the hexavalent chromium, including cancers, birth defects, and organ failures, which PG&E knew about but failed to reveal. After many arguments the case had finally led to arbitration with a maximum of $400 million. After the first 40 people got about $110 million, PG&E reassessed its position and decided it was a bad idea. The case was settled in 1996 for $333 million, the largest settlement ever paid in a direct-action lawsuit in U.S. history. The 2000 movie "Erin Brockovich" portrayed the damage that PG&E caused to people's lives and their intentional cover-up. This event was also featured on A&E Network's "American Justice".

In 2006, PG&E agreed to pay $295 million to settle cases involving another 1,100 people statewide for chromium 6 related claims. In 2008, PG&E settled the last of the cases involved with the Hinkley claims for $20 million. [citation |title=PG&E settles last chronium 6 case |newspaper=Los Angeles Times |pages=B2 |year=2008 |date=April 8 2008]


PG&E received a 100% rating on the Corporate Equality Index released by the Human Rights Campaign starting in 2003, the second year of the report.

Fortune 500 2008

* PG&E Corp. Rank: 200 (2004 rank: 179, 2005 rank: 196) CEO: Peter A. Darbee Address: 1 Market St. San Francisco, CA 94105

References and footnotes

* "The History of Gas Lighting in San Francisco" Pacific Gas and Electric Magazine Vol. 1 #3 August 1909
* PG&E - A Report on the Companies Environmental Policies and Practices - Council on Economic Priorities - NY April 1994
* Roe, David. Dynamos and Virgins. (New York: Random House, 1984.)

See also

* Battery-to-grid
* Southern California Edison
* San Diego Gas & Electric
* Valeo Power
* Roland Risser
* Community Choice Aggregation

External links

* [ Pacific Gas and Electric Company Official home page]
* [ PG&E Clean Air Transportation Program]
* [ PG&E Environmental Justice from PG&E] for Bayview Hunters Point, San Francisco
* [ Lets Green This City]
* [ Lets Green Wash This City]
* [ Greenpeace Action for More Solar in San Francisco]
* [ Sierra Club on Community Choice Energy]
* [ Local Energy Alternatives to PG&E]
* [ PG&E history timeline]
* [ Activists Protest PG&E's Broken Promises in Hunters Point]
* [ SF Guardian on Action Against PG&E]
* [ California PUC Approves 3 Utility Scale Solar Thermal Projects]

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