PG&E Pegs San Francisco Grid Takeover Cost at $22.5 Billion, Far Above City's $3.4 Billion Estimate

Pacific Gas and Electric Co. (PCG) said Wednesday a proposed government takeover of its San Francisco electric distribution grid would cost $22.5 billion, well above the $3.4 billion the city estimated in April. In a filing with the California Public Utilities Commission, PG&E valued its San Francisco electric and real estate assets at about $13.9 billion and estimated $8.6 billion in business severance damages and physical separation costs. The company said the takeover would require building a replacement substation, establishing a new service center and reconfiguring power lines to maintain service for customers outside the city. PG&E said the city's valuation excluded more than 2,000 real estate interests, including easements and licenses, and undervalued its underground distribution system. The utility has invested $3 billion in San Francisco grid reliability upgrades over the past decade and plans nearly $2 billion more over the next five years. The CPUC is reviewing the valuation.