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History
San Francisco Gas
In the 1850s, manufactured gas was introduced to the United States for lighting. Larger American cities in the east built gasworks, but the west had no gas industry. San Francisco had
street lights only on Merchant Street, in the form of oil lamps.
Three brothers—Peter, James, and Michael Donahue—ran the foundry that became the Union Iron Works, the largest shipbuilding operation on the West Coast, and became interested in manufacturing gas Joseph G. Eastland, an engineer and clerk at the foundry, joined them in gathering information. In July 1852, James applied for and received from the Common Council of the City of San Francisco a franchise to erect a gasworks, lay pipes in the streets and install street lamps to light the city with "brilliant gas". The council specified that gas should be supplied to households "at such rates as will make it to their interest to use it in preference to any other material". Eastland and the Donahue brothers incorporated the San Francisco Gas Company on August 31, 1852, with $150,000 of authorized capital. It became the first gas utility in the West. Its official seal bore the inscription "Fiat Lux"—let there be light—the same slogan later adopted by the University of California. There were 11 original stockholders, and the three Donahue brothers subscribed for 610 of the 1,500 shares.
The original location for the gas works was bounded by First, Fremont, Howard and Natoma streets south of Market, on what was then the shore of the San Francisco Bay. Work on the plant started in November 1852, and finished a few months later. On the night of February 11, 1854, the streets of San Francisco were for the first time lighted by gas. To celebrate the event, the company held a gala banquet at the Oriental Hotel. Gas lighting quickly gained public favor. In the first year of operation, the company had 237 customers. That number more than doubled the next year, to 563. By the end of 1855, the company had laid more than 6+1⁄2 miles of pipe and 154 street lamps were in operation.
The growing popularity of gas light led to competing gas companies, including the Aubin Patent Gas Company and Citizens Gas Company. The San Francisco Gas Company quickly acquired these smaller rivals. However, one rival did provide serious competition. The Bank of California founded the City Gas Company in April 1870 to compete with the gas monopoly held by the Donahue brothers' operation. City Gas began operation in 1872 and initiated a price war with the San Francisco Gas Company. In 1873, the two companies negotiated a consolidation as a compromise and the Bank of California gained part ownership of "the most lucrative gas monopoly in the West". On April 1, 1873, the San Francisco Gas Light Company was formed, representing a merger of the San Francisco Gas Company, the City Gas Company, and the Metropolitan Gas Company.
San Francisco Gas and Electric
Gas utilities, including San Francisco Gas Light, faced new competition with the introduction of electric lighting to California. In 1879, San Francisco became the first city in the world to have a central generating station for electric customers, instead of individual generators colocated with the loads. To stay competitive, the San Francisco Gas Light Company introduced the Argand lamp that same year. The lamp increased the light capacity of gas street lamps, but proved to be an expensive improvement and was not generally adopted. Meanwhile, the demand for electric light in the stores and factories of downtown San Francisco continued to grow. The first electric street light was erected in 1888 in front of City Hall, and the electrical grid supporting it was gradually extended. A second generating station was constructed in 1888 by the California Electric Light Company to increase production capacity.
New competition also emerged in the 1880s in the form of water gas, an improved illuminant patented by Thaddeus Lowe. The United Gas Improvement Company, a water gas manufacturer organized after purchasing the Lowe gas patents, acquired a lease and then an interest in San Francisco's Central Gas Light Company on November 1, 1883. United was acquired by the Pacific Gas Improvement Company in 1884. Under the management of president Albert Miller, Pacific Gas Improvement developed into a formidable competitor to San Francisco Gas Light. His sons, Horace A. Miller and C. O. G. Miller (Christian Otto Gerberding Miller), acting as Secretary and President, respectively, eventually owned and controlled not only the Pacific Gas Improvement Company but also the Pacific Gas Lighting Company (Pacific Lighting Company).
In 1888, San Francisco Gas Light built its own water gas plant at the Potrero gas works. The manufacturing of water gas proved successful due to the increased availability of inexpensive petroleum. The company decided to construct a modern gas works with both updated water gas manufacturing technology and a modern coal-gas plant as a hedge against shortages in the supply of oil. In 1891, the North Beach Gas Works was completed under the direction of San Francisco Gas Light president and engineer Joseph B. Crockett. The facility was the largest gas holder in the U.S. west of Chicago.
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In 1896, the Edison Light and Power Company merged with the San Francisco Gas Light Company to form the new San Francisco Gas and Electric Company.Consolidation of gas and electric companies solved problems for both utilities by eliminating competition and producing economic savings through joint operation. Other companies that began operation as active competitors but eventually merged into the San Francisco Gas and Electric Company included the Equitable Gas Light Company, the Independent Electric Light and Power Company, and the Independent Gas and Power Company. In 1903, the company purchased its main competitor for gas lighting, the Pacific Gas Improvement Company.
Pacific Gas and Electric Company
John Martin and Eugene J. de Sabla, started out as gold miners along the Yuba River, harnessing hydroelectric power, building hydro plants in Nevada City (1895), and Northern California.
In the early 1890s, Martin, de Sabla, Alfonso Tregidgo, and later, Romulus Riggs Colgate, began developing a hydroelectric powerhouse on the South Fork of the Yuba River.
In 1899, Martin and de Sabla formed Yuba Power Company. In 1900, Martin and de Sabla created the Bay Counties Power Company, constructing a 140-mile transmission line for an electric railway in Oakland. In 1903, John Martin and Eugene de Sabla started the California Gas & Electric Company to acquire and merge gas and electric power businesses, and bought many utilities like Oakland Gas Light & Heat Company, United Gas & Electric Company, and, in 1905, San Francisco Gas & Electric Company.
In 1905, Martin and de Sabla formed Pacific Gas and Electric Company.
According to PG&E's 2012 history timeline on their webpage, the San Francisco Gas and Electric Company and the California Gas and Electric Corporation merged to form the Pacific Gas and Electric Company (PG&E) on October 10, 1905. The consolidation gave the California Gas and Electric Corporation access to the large San Francisco market and a base for further financing. The San Francisco Gas and Electric Company, in turn, was able to reinforce its electric system, which until then had been powered entirely by steam-operated generating plants, which could not compete with lower cost hydroelectric power. After the merger, engineers and management from each organization made plans to coordinate and unify the two systems. However, the two firms maintained separate corporate identities until 1911.
PG&E began delivering natural gas to San Francisco and northern California in 1930. The longest pipeline in the world connected the Texas gas fields to northern California, with compressor stations that included cooling towers every 300 miles (480 km), at Topock, Arizona, 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, although it did keep some plants on standby. Today a network of eight compressor stations linked by "40,000 miles of distribution pipelines and over 6,000 miles of transportation pipelines" serves "4.2 million customers from Bakersfield to the Oregon border".
In the 1950s and 1960s, at both the Topock and Hinkley compressor stations, a hexavalent chromium additive was used to prevent rust in the cooling towers, which later was the cause of the Hinkley groundwater contamination. It disposed of the water from the cooling towers "adjacent to the compressor stations".
The 1906 San Francisco earthquake
PG&E was significantly affected by the 1906 San Francisco earthquake. The company's assorted central offices were damaged by the quake and destroyed by the subsequent fire. Its San Francisco Gas and Electric Company subsidiary in particular suffered significant infrastructure loss, as its distribution systems—miles of gas mains and electric wires—were dissevered. Only two gas and two electric plants, all located far from the city, survived the destruction. These functioning facilities—including the new 4,000,000-foot crude oil gas works at Potrero Generating Station—played critical roles in San Francisco's rebuilding efforts. Many of PG&E's utility competitors ceased operation following the Great Earthquake. The company's substantial capital allowed it to survive, rebuild, and expand.
Sacramento Electric, Gas and Railway Company
In 1906, PG&E purchased the Sacramento Electric, Gas and Railway Company and took control of its railway operations in and around Sacramento. The Sacramento City Street Railway began operating under the Pacific Gas & Electric name in 1915, and its track and services subsequently expanded. By 1931 the Sacramento Street Railway Division operated 75 streetcars on 47 miles (76 km) of track. PG&E's streetcars were powered by the company's hydroelectric plant in Folsom. In 1943, PG&E sold the rail service to Pacific City Lines, which was later acquired by National City Lines. Several streetcar lines were soon converted to bus service, and the track was abandoned entirely in 1947.
During this same period, Pacific City Lines and its successor, National City Lines, with funding from General Motors, Firestone Tire, Standard Oil of California (through a subsidiary, Federal Engineering), Phillips Petroleum, and Mack Trucks, were buying streetcar lines and rapidly converting most of them to bus service. This consortium was convicted in 1949 of federal charges involving conspiracy to monopolize interstate commerce in the sale of buses and supplies to National City Lines and its subsidiaries. The actions became known as the Great American Streetcar Scandal or the General Motors Streetcar Conspiracy.
Further consolidation and expansion
Within a few years of its incorporation, PG&E made significant inroads into Northern California's hydroelectric industry through purchase of existing water storage and conveyance facilities. These included many reservoirs, dams, ditches and flumes built by mining interests in the Sierras that were no longer commercially viable. By 1914, PG&E was the largest integrated utility system on the Pacific Coast. The company handled 26 percent of the electric and gas business in California. Its operations spanned 37,000 square miles across 30 counties.
The company expanded in the 1920s through strategic consolidation. Important acquisitions during this period included the California Telephone and Light Company, the Western States Gas and Electric Company and the Sierra and San Francisco Power Company, which provided hydropower to San Francisco's streetcars. These three companies added valuable properties and power and water sources. By the end of 1927, PG&E had nearly one million customers and provided electricity to 300 Northern Californian communities.
In 1930, PG&E purchased majority stock holdings in two major Californian utility systems—Great Western Power and San Joaquin Light and Power—from The North American Company, a New York investment firm. In return, North American received shares of PG&E's common stock worth $114 million. PG&E also gained control of two smaller utilities, Midland Counties Public Service and the Fresno Water Company, which was later sold. The acquisition of these utilities did not result in an immediate merger of property and personnel. The Great Western Power Company and the San Joaquin Company remained separate corporate entities for several more years. But through this final major consolidation, PG&E soon served nearly all of Northern and Central California through one integrated system.
Natural gas
The gas industry market structure was dramatically altered by the discovery of massive natural gas fields throughout the American Southwest beginning in 1918. The fuel was cleaner than manufactured gas and less expensive to produce. While natural gas sources were abundant in Southern California, no economical sources were available in Northern California. In 1929, PG&E constructed a 300-mile pipeline from the Kettleman oil field to bring natural gas to San Francisco. The city became the first major urban area to switch from manufactured gas to natural gas. The transition required the adjustment of burners and airflow valves on 1.75 million appliances. In 1936, PG&E expanded distribution with an additional 45-mile pipeline from Milpitas. PG&E gradually retired its gas manufacturing facilities, although some plants were kept on standby.
Defense activities boosted natural gas sales in California during World War II, but cut deeply into the state's natural reserves. In 1947, PG&E entered into a contract with the Southern California Gas Company and the Southern Counties Gas Company to purchase natural gas through a new 1,000-mile pipeline running from Texas and New Mexico to Los Angeles. Another agreement was reached with the El Paso Natural Gas Company of Texas for gas delivery to the California-Arizona border. In 1951, PG&E completed a 502-mile main that connected with the El Paso network at the state line.
During this period of expansion, PG&E was involved in legal proceedings with the Securities and Exchange Commission regarding the company's status as a subsidiary of the North American Company. As outlined by the Public Utility Holding Company Act of 1935, a utility subsidiary was defined as a utility company with more than 10% of their stock held by a public utility holding company. Though 17% of PG&E stock was held by the North American Company at this time, PG&E filed with the SEC to be exempted from subsidiary status on the grounds that 17% ownership did not give the North American Company control and because the North American Company occupied only two board member spots. The North American Company backed PG&E's request by stating that they were involved in business operations in a limited capacity. The request remained unresolved until 1945 when the North American Company sold off stocks that brought its ownership to below 10%. The SEC then ruled that PG&E was not a subsidiary of the North American Company. In 1948, the North American Company sold its remaining stock in PG&E.
Nuclear plants and gas pipelines
In 1957, the company brought online Vallecitos Nuclear Center, the first privately owned and operated nuclear reactor in the United States, in Pleasanton, California. The reactor initially produced 5,000 kilowatts of power, enough to power a town of 12,000.
In addition to nuclear power, PG&E continued to develop natural gas supplies as well. In 1959, the company began working to obtain approval for the import of a large quantity of natural gas from Alberta, Canada to California, via a pipeline constructed by Westcoast Transmission Co. and the Alberta and Southern Gas Company on the Canadian side, and by Pacific Gas Transmission Company, a subsidiary of PG&E, on the U.S. side. Construction of the pipeline lasted 14 months. Testing began in 1961, and the completed 1,400-mile pipeline was dedicated in early 1962.
PG&E began construction on another nuclear facility, the Diablo Canyon Power Plant, in 1968. Originally slated to come online in 1979, the plant's opening was delayed for several years due to environmental protests and concerns over the safety of the plant's construction. Testing of the plant began in 1984, and energy production was brought up to full power in 1985.
During the construction of the Diablo Canyon plant, PG&E continued its efforts to bring natural gas supplies from the North to their service area in California. In 1972, the company began exploring possibilities for a 3,000-mile pipeline from Alaska, which would travel through the Mackenzie River Valley and on to join with the previously constructed pipeline originating in Alberta.
In 1977 the Mackenzie Valley Pipeline project received approval from the U.S. Federal Power Commission and support from the Carter Administration. The pipeline still required approval from Canada. Plans for the pipeline were placed on hold in 1977 by a Canadian judge. Justice Thomas R. Berger of British Columbia shelved the project for at least 10 years, citing concerns from First Nations groups, whose land the pipeline would have traversed, as well as potential environmental impacts.
In 1984 the great-grandson of PG&E's founder George H. Roe—David Roe published his book entitled Dynamos and Virgins during the time when there was a growing antinuclear-power movement. David Roe, who was an environmentalist and the Environmental Defense Fund's West Coast general counsel, "mounted an assault on the longstanding assumption that steady growth in coal- and nuclear-generating capacity was the only solution to the nation's energy needs". He based his arguments on an economic analysis "aimed at showing that a shift to energy conservation and alternative energy sources alone could slake the thirst for electricity".
1990s, deregulation, and decline
As of December 1992, PG&E operated 173 electric generating units and 85 generating stations, 18,450 miles (29,690 km) of transmission lines and 101,400 miles (163,200 km) of distribution system.
In 1997, PG&E reorganized as a holding company, PG&E Corporation. It consisted of two subsidiaries—PG&E, the regulated utility, and a non-regulated energy business.
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 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. 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.
1990s fires
In 1994, PG&E caused the Trauner Fire in Nevada County, California through criminal negligence. The fire burned many acres of land and destroyed a schoolhouse and twelve homes near the town of Rough and Ready, California. PG&E was found guilty of causing the fire and of 739 counts of criminal negligence.
In 1996, one of PG&E's substations in the Mission District of San Francisco caught fire. PG&E was eventually found legally culpable for the fire due to criminal negligence, according to an investigation in 2003.
1997 Sierra blaze
On June 19, 1997, a Nevada County jury in Nevada City found PG&E guilty of "a pattern of tree-trimming violations that sparked a devastating 1994 wildfire in the Sierra". "PG&E was convicted of 739 counts of criminal negligence for failing to trim trees near its power lines—the biggest criminal conviction ever against the state's largest utility."
2015 Butte Fire
In September 2015, the deadly and destructive Butte Fire ignited in Amador and Calaveras counties. It killed two people and destroyed hundreds of structures. An investigation found PG&E responsible for the fire after a gray pine tree came in contact with one of their powerlines.
2017 Tubbs Fire
The Tubbs Fire was a wildfire in Northern California during October 2017. At the time, the Tubbs Fire was the most destructive wildfire in California history, burning parts of Napa, Sonoma, and Lake counties, inflicting its greatest losses in the city of Santa Rosa. Suspicion for the cause of the fire fell on PG&E, but the company seemed to be cleared of responsibility in this incident after Cal Fire released the results of its investigation on January 24, 2019, upon which news the company's stock price jumped dramatically.
On August 14, 2019, U.S. Bankruptcy Judge Dennis Montali, the federal judge for the 2019 PG&E bankruptcy proceedings, presided over a hearing for victims of the Tubbs Fire, and they presented their case for a fast-track state civil trial by jury to resolve if PG&E is at fault for the Tubbs Fire, rather than customer equipment causing the fire as determined by Cal Fire. On August 16, 2019, the judge ruled that the trial can proceed "on a parallel track" because "it advances the goals of this bankruptcy." After the judge's ruling, the company's stock price sank by 25%.
On December 6, 2019, PG&E proposed to settle the wildfire victim claims for a total of $13.5 billion, which would cover liability for its responsibility originating from the Tubbs Fire, Camp Fire, Butte Fire, and also a series of wildfires beginning on October 8, 2017, collectively called the 2017 North Bay Wildfires. The offer was tendered as part of PG&E's plan to exit bankruptcy. The court case for the Tubbs Fire was superseded by the Restructuring Support Agreement (RSA) of December 9, 2019 and by the approved bankruptcy reorganization plan, wherein PG&E accepted liability for the Tubbs Fire.
2018 Camp Fire
In November 2018, PG&E and its parent company were sued in the San Francisco County Superior Court by multiple victims of the Camp Fire – the deadliest and most destructive wildfire in California history. The Camp Fire destroyed more than 18,000 buildings, including 14,000 homes, being particularly devastating to poorer residents. Approximately 90% of the population of the town of Paradise, California as of June 2020 remains dispersed in other parts of the state and the country. The lawsuit accused PG&E of failure to properly maintain its infrastructure and equipment.
The cause of the fire, as indicated by PG&E's "electric incident report" submitted to the California Public Utilities Commission, was a power failure on a transmission line on November 8, just 15 minutes before the fire was first reported near the same location. Later investigation revealed that a "broken hook may have allowed a piece of electrically charged equipment to swing free and come close enough to the tower to arc, providing the spark that ignited the blaze".
The California Department of Forestry and Fire Protection and state utility regulators are investigating PG&E to determine if they complied with state laws.
As a result, both Pacific Gas and Electric Company and parent company PG&E Corporation together filed for Chapter 11 bankruptcy on January 29 following the California required 15-day bankruptcy waiting period. PG&E settled criminal proceedings with a fine, pleaded guilty to one felony count of illegally starting a fire, and 84 felony counts of involuntary manslaughter.
Civil lawsuit proceedings continued, and were resolved by settlement. On July 1, 2020, PG&E funded the Fire Victim Trust (FVT) with $5.4 billion in cash and 22.19% of stock in the reorganized PG&E, which covers most of the obligations of its settlement for the wildfire victims. PG&E has two more payments totaling $1.35 billion in cash, scheduled to be paid in January 2021 and January 2022, to complete its obligations to the wildfire victims.
2019 Kincade Fire
The Kincade Fire was a wildfire that burned in Sonoma County, California. The fire started northeast of Geyserville in The Geysers on 9:24 p.m. on October 23, 2019, and subsequently burned 77,758 acres (31,468 ha) until the fire was fully contained on November 6, 2019. The fire threatened over 90,000 structures and caused widespread evacuations throughout Sonoma County, including the communities of Geyserville, Healdsburg, and Windsor. The majority of Sonoma County and parts of Lake County were under evacuation warnings. The fire was the largest of the 2019 California wildfire season.
Initially, it was unknown whether or not PG&E was at fault for the fire. On July 16, 2020, which was after PG&E exited bankruptcy, Cal Fire reported that the fire was caused by PG&E transmission lines. Damages would not be covered by the settlement for wildfire victims that was part of the PG&E bankruptcy.
2020 Zogg Fire
The Zogg Fire (named that because it started at Zogg Mine Road and Jenny Bird Lane) was a wildfire that burned 56,338 acres (22,799 ha) in southwestern Shasta County and northwestern Tehama County, which are both in California, in the United States, as part of the severe 2020 California wildfire season. The fire was first reported on September 27, 2020, and was not fully contained until October 13, 2020, by which time it had destroyed much of the communities of Igo and Ono, killing four people and destroying 204 buildings
In March 2021, investigations concluded the fire began when a grey pine tree fell on power lines belonging to the Pacific Gas and Electric Company (PG&E).The tree reportedly had been potentially identified for removal, but had not been removed after the Carr Fire in 2018.
2021 Dixie Fire
On January 4, 2022, CalFire determined that "the Dixie Fire was caused by a tree contacting electrical distribution lines owned and operated by Pacific Gas and Electric (PG&E) located west of Cresta Dam." CalFire forwarded the investigative report to the Butte County District Attorney's office, the same office that prosecuted PG&E in 2018 following the Camp Fire.
From Wikipedia’s article on Pacific Gas and Electric Company, shared under CC BY-SA 4.0.5