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How Do California's Utilities Plan to Spend Their Billions for Wildfire Mitigation?

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In a filing with the California Public Utilities Commission (CPUC) last week, Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E), and Southern California Edison (SCE) have promised to billions to mitigate wildfire risks due to climate change. PG&E, possibly the most high-profile and hardest-hit utility among the trio, plans to spend $2.6 billion through 2022 to manage vegetation; inspect transmission structures and poles; and harden its system by replacing lines or moving them underground or replacing it with stronger infrastructure. SCE plans to spend $3.8 billion and SDG&E will set aside $1.5 billion for wildfire mitigation. 

So, where is this money going? 

SDG&E plans to deploy drones for inspection while SCE will spend a substantial sum to install 700 miles of covered conductors on its lines. PG&E has a bunch of initiatives lined up. It has ramped up the number of weather and fuel data points used for fire risk forecasting by 100 billion in 2019 to 180 billion in 2020, according to a January presentation. This has enabled greater precision in forecasting, allowing the utility to micro-target areas as small as 2 km. It has also enhanced inspection and situational awareness by installing cameras and, presumably, use of aerial survey techniques. The San Francisco-based company has also established four temporary microgrids to support impact communities and has issued a request for offers for distribution-enabled microgrids. 

So, which technologies stand to benefit from wildfire mitigation by utilities? There’s residential battery storage, for one. Despite efforts by utilities to regain trust, customers may strike out on their own. According to BloombergNEF, sales of residential battery storage equipment will quadruple in 2020. Fifty thousand households will install storage systems in 2020. The corresponding number was 19,000 homes in November 2019. Other technologies and industries that will benefit from the wildfire mitigation push by utilities are drones and microgrids. A January report estimates an annual growth rate of approximately 37.34% for the use of drones in the utility industry. 

Meanwhile, PG&E has estimated an annual increase of between 7% to 8.5% in its average weighted rate base to $56 billion by 2023. Most of that increase comes from electric transmission owners, meaning the utility is relying on a surge in electric car sales to power its revenue growth.

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