Fostering Economic Vitality Across Our Business

Photo courtesy of First Solar, Inc.

PG&E has the privilege of serving 15 million Californians—homes and businesses that encompass a diverse array of customers and communities. We recognize that many of these communities have been hard hit by the economic downturn and that customers continue to face high unemployment, housing foreclosures and other economic challenges.

As one of the state’s largest employers and a key contributor to California’s economy, PG&E is focused on the economic health of our customers and California. As we build for the long term, the investments we are making to improve our operations will help make California stronger and will support efforts to revitalize the state’s economy. We also understand that PG&E’s future success will depend on the success of the communities we serve—a fact that drives our continued focus on serving customers locally and fostering economic vitality among underserved constituencies.

Investing in Infrastructure

PG&E is making major investments to deliver a safe, reliable and affordable energy future that will benefit our customers and facilitate a cleaner, more diverse energy supply.

Looking forward, PG&E has asked state regulators for approval to make investments in 2014 to 2016 that will enable us to modernize our system and accelerate the progress we have already begun to make toward our long-term goal of being the safest utility in the country.

These investments would not only improve the competitiveness of businesses in our service area by providing them the platform of a 21st century energy infrastructure. They will also generate new jobs and stimulate economic growth throughout the state.

The proposal would enable PG&E to:

  • Hire 2,200 more employees dedicated to improving system safety, reliability and customer service.
  • Support about 39,000 jobs in California and generate an estimated $9 billion each year in positive economic impact from sales of goods and services statewide.
  • Generate an estimated $685 million per year in California state and local tax revenue as a consequence of the added worker income and business sales.

Building Career Pathways

PG&E is actively building career pathways into the energy sector, and we’re doing so in a collaborative way that emphasizes underserved communities in our outreach to build a skilled, diverse and qualified talent pool.

These efforts help address a challenge that’s seen across the utility industry: Many of the nation’s utility workers are nearing the end of their careers. At PG&E, over the next five years, we estimate that more than 40 percent of our workforce will become eligible for retirement.

PG&E is taking a multi-pronged approach to close this gap. For example, through PG&E’s PowerPathway™ program, we are partnering with the education and workforce investment communities, labor and industry employers to prepare individuals for high-demand positions at PG&E and throughout the energy and utility industries.

We also remain focused on recruiting veterans to PG&E, and were pleased to hire 225 veterans in 2011, or about 7 percent of our total hires. The attention from PG&E and other organizations comes as the unemployment rate of veterans is nearly 40 percent higher than the general population.

Building a More Sustainable Supply Chain

PG&E has more than 5,000 suppliers in its supply chain, with an average annual spend of about $4 billion toward firms that provide cables and wires, construction services and a host of other equipment and services. As PG&E works to build a more sustainable supply chain, we are focused on operational excellence and continuous improvement across a range of areas, including promoting safety, maintaining a high ethical standard and reducing environmental impacts.

In doing so, we are fostering economic vitality and job creation in the communities we serve. For example, PG&E has been working for more than three decades to bring more diverse suppliers and small businesses into our supply chain. In fact, according to the CPUC, Pacific Gas and Electric Company (Utility) spent more on products and services from businesses owned by minorities, women, and service-disabled veterans than any of the state’s more than 30 other utilities and telecommunication companies in 2011.

We achieved these results by engaging with our suppliers and a variety of organizations at the local, state and national level to promote supplier diversity, generate innovation and increase competition. In addition, we’ve played an important role by providing small businesses—a vital source of jobs and economic activity in the communities we serve—with technical assistance training.

Altec Industries opened a green-vehicle manufacturing facility to produce low-emission bucket trucks for PG&E.

PG&E is also supporting California’s economy by fulfilling other operational needs. Recently, we were honored to help cut the ribbon at a new green-fleet manufacturing plant near Sacramento that will build low-emission bucket trucks. PG&E’s commitment to purchase hundreds of the trucks from Altec Industries will help support about 100 new manufacturing jobs at the facility—promoting sustainability in our operations while keeping the benefits close to home.

Focusing on Affordability

As we make investments to deliver the service our customers expect, we understand that it is critically important to keep customer energy bills affordable.

With this in mind, PG&E offers many ways for customers to save money by saving energy, including extensive energy efficiency assistance, online tools to analyze energy use and rebates for energy-efficient products.

We also work to connect customers with our assistance programs before they find themselves unable to make their utility payments. Our support includes financial assistance programs such as California Alternate Rates for Energy (CARE), Relief for Energy Assistance through Community Help (REACH) and the Energy Savings Assistance Program to provide income-qualified customers with a variety of services to help them meet their energy needs.

Additionally, PG&E maintains a modest but long-standing team dedicated to helping retain, expand and create business within our service area. For the last several decades, this team has leveraged partnerships with local, regional and statewide economic organizations to streamline procedures and eliminate barriers for businesses. The team provides one-on-one assistance to current and future customers and focuses on tools, as well as regulatory options, to help grow PG&E’s economic development offerings.

In light of continued economic challenges and increased customer needs, we are working to expand our field presence and enhance our rate offerings. For example, in 2012, we asked state regulators for permission to offer a new electric rate aimed at helping attract jobs to California or retain them here. If approved, the rate will apply to large employers—PG&E customers with power loads of at least 200 kilowatts—that have a choice of where to locate operations and hire employees. More than 30 cities and counties and additional non-government entities have expressed support for the proposed rate option.

The rate would provide a 12 percent rate reduction for five years for companies that attest that it is needed to enable them to site new operations, expand existing facilities or stay in California. An enhanced option, with a reduction of 35 percent, would apply in counties with unemployment rates that are at least 25 percent above the state average. The new rate would replace an existing program that PG&E began offering in 2005. The current program’s rate reduction has declined over time and is scheduled to sunset at the end of 2012.

Partnering on Local Economic and Community Vitality

PG&E is also partnering in the state’s economic recovery through our community investments, which totaled more than $23 million in 2011. These donations to charitable organizations include assistance to low-income families with their utility bills, investments in local economic and energy-related workforce development initiatives and support for civic projects that vitalize the community. In fact, Economic and Community Vitality represents one of the three focus areas for our community investments.

Through our community investments, we continue to support local nonprofit organizations to strengthen job creation, particularly in communities that have been hardest hit by the recession.

For example, last year, we supported the grand opening of the Fresno Area Hispanic Chamber’s new Downtown Business Hub. Widely acclaimed for its role as the first bi-lingual business incubator in the Western United States, the facility opened with the goal of annually providing more than 300 business owners with resources to help them start or expand a business and to provide office space for 8 to 12 prospective businesses committed to creating jobs locally.

PG&E and the Boys & Girls Clubs of Fresno County teamed up to provide summer jobs.

Building on this success, in 2012, we launched the PG&E Summer Jobs Program as a partnership between PG&E and the Boys & Girls Clubs of Fresno County. The program provided more than 200 youth from Fresno’s most underserved neighborhoods with nine weeks of career education and job readiness training. Following this training, 55 students earned a paid summer internship. PG&E partnered with the Boys & Girls Clubs of Fresno County, local nonprofit partners and local small- to medium-sized business customers to provide employment opportunities, with student salaries supported through a grant from PG&E.

Meeting Our Civic Responsibility

In addition to the significant investments we are making in our business, the taxes and franchise fees that PG&E pays are stable sources of revenue that local governments can count on during tight budgetary times.

In 2011, PG&E made franchise fee payments totaling more than $138 million. PG&E makes these payments to cities and counties for the right to use public streets for its gas and electric facilities. The franchise fees are above and beyond PG&E’s property tax payments, which totaled more than $289 million to 49 counties in 2011.

Future Direction

At PG&E, we recognize that affordable and reliable energy is more important than ever as an enabler of business and employment development in our state.

As part of our enhanced focus on the economic vitality of our customers, we will continue to engage with our many stakeholders to identify opportunities for the future. Future possibilities include:

  • Expanding our local presence through community partnerships, strengthened customer support teams and enhanced incentives and tools for customers;
  • Building new career opportunities to strengthen the “pipeline” of individuals entering our workforce;
  • Leveraging our business operations to better serve our customers and ensure we deliver reliable electricity and gas service;
  • Exploring opportunities to increase investment in local and underserved communities; and
  • Taking steps to further quantify the economic benefits of our work in the communities we serve so that we can explore opportunities to do more.