PG&E pegs San Francisco grid takeover cost at $22.5 billion, more than six times city's estimate
PG&E pegs San Francisco grid takeover cost at $22.5 billion, more than six times city's estimate Oct 21 (Reuters) - PG&E Corp PCG.N said on Wednesday a proposed government takeover of its San Francisco electric distribution grid would cost $22.5 billion, more than six times the $3.4 billion cited by the city in an April filing.
The City and County of San Francisco has proposed to take over PG&E's local electric distribution network citing long-term cost savings, service reliability and affordability, with regulators currently weighing the value of the assets and the cost of separating them from the utility's broader grid.
PG&E valued its San Francisco assets at $13.9 billion and said separation and business-loss costs would stand at $8.6 billion
"A government takeover of our grid is not the right solution for our San Francisco customers," said the utility's CEO Patti Poppe, adding that its filing showed a takeover did not make financial sense for customers
PG&E said a separation would require a replacement substation, likely in San Mateo County, a new service center and reconfigured or new power lines to maintain service for customers outside the city
The city had also undervalued PG&E's underground power network and excluded more than 2,000 real-estate interests — including easements and licences — from its estimate, the company said
PG&E has invested $3 billion in San Francisco's grid over the past decade and plans nearly $2 billion more over the next five years, it added
California regulators have already ruled that the city must pay "the highest value" a hypothetical buyer might pay for the assets
The California Public Utilities Commission did not immediately respond to a request for comment
San Francisco accounts for about 5% of PG&E's electricity demand, while the utility's entire electric system is worth about $60 billion, said Nancy Crowley, spokesperson for the San Francisco Public Utilities Commission
(Reporting by Sumit Saha in Bengaluru; Editing by Jonathan Ananda)
((Sumit.Saha@thomsonreuters.com;))