Pacific Gas and Electric Company

File:PG&E Logo.jpg

Pacific Gas and Electric Company (PG&E) 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 San Francisco.

History

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 Peter Donahue, in the foundry business that would become the Union Iron Works, 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 12 miles of street mains, and two gas holders at First and Howard with a combined capacity of 160,000 cubic feet. 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, it was quickly purchased by the San Francisco Gas Company. 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 .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 thouroughly 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 2,000,000 cubic feet gas holder, was considered the finest gas works in the world. The original plant at Howard Street was dismantled.

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 competion 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.

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 Visiaticion Valley on the San Mateo border and it was connected to the Potrero Gas works by a 12 inch high pressure pipe for use in San Francisco. At the same time, hydroelectric power was established in California at the Colgate power plant on the Yuba River 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 he Potrero works were unaffected and 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 and started the process of retiring its polluting gas manufacturing facilities. In the post war era, PG&E went on a massive bulding spree, creating 14 new hydroelectric plants and 5 steam plants and the longest pipeline in the world to connect the Texas Oil fields to northern California with repressurization plants, that included cooling towewrs, every 300 miles.

As of December 1992, PG&E operated 173 electric generating units and 85 generating stations, 18,450 miles of transmission lines and 101,400 miles 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.

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 bankruptcy April 6, 2001. The State of California bailed out the utility, the cost of this 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 $4,504m in profits out of $11,080m in revenue.

Environmental impacts

The main combustion products of power generation from coal and gas are; fly ash, bottom ash, boiler slag and flue gas desulferization sludge. These wastes were declared solid waste and not hazardous in 1990, however, their current classification requires dumping in specified locations, or stored on site. Nationwide, 75 percent of coal combustion by-products are either disposed of in surface impoundment or transported to specified landfills. The last 25 percent is recycled aninto concrete and cement and fill. Other by-products include PCBs, Dioxin, Furans, arsenic and other heavy metals which are all known carcinogens. PG&E also produces extensive electro-magnetic fields around its facilities and its delivery lines. These are considered a possible health risk.

The electric power supplied by PG&E is generated principally by burning fossil fuel. According to the company's projected 2006 power content label, 3% is from coal and 42% from natural gas. Both emit greenhouse gases and contribute to global warming, though the EPA says natural gas is the "least carbon-intensive [fossil]fuel." An additional 23% of PG&E's power mix is from nuclear fission, which emits very small amounts of carbon.

PG&E and its predeccessor companies have left a wide swath of polluted land in California from the by-products of its operations. It has also left significant land distubances from its building of roads, power towers and generating facilites such as dams and power plants.

The problem in Hinkley

In 1993, PG&E was accused of contamination of drinking water with toxic hexavalent chromium in the Southern California town of Hinkley. It 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. 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 dramatized this event. This event was also on A&E Network's "American Justice".

Diversity

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 2005

• PG&E Corp. Rank: 196 (2004 rank: 179) CEO: Peter A. Darbee Address: 1 Market St. San Francisco, CA 94105
• Website: http://www.pgecorp.com

In millions,

• Revenues 11,080.0 -1.3
• Profits 4,504.0 972.4
• Assets 34,540.0 —
• Stockholders' Equity 8,633.0 —
• Market Value 3/17/2005 13,028.1 —
• Profits as % of.
• Revenues 40.6
• Assets 13.0
• Stockholders' equity 52.2

• Earnings per share, 2004 $10.57
• 8% change from 2003 897.2
• 1994-2004 annual growth rate % 16.9
• Total return to Investors % 2004 19.8
• 1994-2004 annual rate 6.6

References

• "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

External links

• Pacific Gas and Electric Company Official home page
• PG&E history timeline
• PG&E Environmental Justice from PG&E for Bayview Hunters Point, San Francisco!
• Activists Protest PG&E's Broken Promises in Hunters Point