PG&E’s Sustainability Journey

In the early 1900s, we began acquiring thousands of acres of forests surrounding the powerhouses we were building on rivers in the Sierra Nevada Mountains. Our engineers realized that if the lands adjacent to the dams, reservoirs and flumes were converted from forests to other uses, the hydroelectric system would be negatively affected due to increased sedimentation. We protected more than 140,000 acres of watershed lands surrounding our facilities, which helped PG&E run its hydroelectric system in a cost-effective manner, while generating property tax revenues for rural communities and providing recreational opportunities for our customers and the general public.

In late 1950s, as America’s post-war economy and population were rapidly expanding, utilities across the country also entered a period of growth to fuel the nation’s growing demand for electricity. In those days, “keeping the lights on” largely meant building fossil-fueled power plants, with some pursuit of hydroelectric generation. Unlike any other utility at that time, however, PG&E took the unusual step of developing a power plant fueled by a renewable resource—geothermal steam. In 1960, when PG&E began operations at its Geysers Geothermal Complex, it became the first commercial venture by a U.S. utility to tap geothermal energy. Today, the Geysers, located approximately 100 miles northeast of San Francisco, is one of the largest geothermal energy complexes in the nation, and we continue to purchase the renewable electricity generated there and supply it to our customers.

In the early 1980s, PG&E was confronted with an inter-related series of challenges when new policies required a complete paradigm shift of our business model. The concept of “decoupling” was introduced—breaking the link between energy sales and earnings—making the company indifferent to the amount of electricity or natural gas it sold. Because the company is not incentivized to sell more in order to earn more, this model has served as the foundation for nearly 35 years of successful energy efficiency programs. It provides a strong example of the Triple Bottom Line, where the combination of decoupling and aggressive energy efficiency programs have:

Some have remarked that America’s electric grid is the largest machine in the world, but it has not changed significantly since the days of Thomas Edison. Just as Edison revolutionized society with his inventions, a new evolution is underway to update the nation’s electric grid. PG&E, like other leading utilities, is investing billions of dollars to build the Smart Grid—the infrastructure that will enable America to shift to a low carbon economy.

From giving customers more information so they can better manage their energy use to enabling electric vehicle “smart charging,” the Smart Grid is poised to support a more sustainable energy system. One important aspect will be to better integrate intermittent sources of renewable energy, such as wind and solar, into the grid so that PG&E and other utilities can provide customers with a future of clean, affordable and reliable energy service. The Smart Grid will also help to build a more sustainable workforce—building new careers in critical fields such as engineering, energy efficiency and clean tech vehicles. Through our PowerPathway Program, PG&E is playing a supporting role by helping educational institutions build their capacity for training in these emerging areas.