PG&E’s infrastructure investment economic impact to total $27bn over 3 years


Glen Weisbrod,
President, EDRG
San Francisco, CA, U.S.A. — (METERING.COM) — July 4, 2012 – Pacific Gas and Electric Company’s (PG&E) planned multi-billion dollar expansion and upgrading of its distribution and generation infrastructure between 2014-2016 is expected to lead to roughly 30,000 jobs per year in the PG&E service area and 39,000 jobs per year statewide, according to a study from the Boston-based Economic Development Research Group, Inc. (EDRG).

Further, annual business sales will total roughly $7.4 billion in the PG&E service area and $9 billion statewide. Worker income annually will total roughly $2.4 billion in the PG&E service area and $3 billion statewide, and state and local tax revenues will be roughly $685 million per year for government agencies in California.
Based on the annual impact on business sales, the statewide economic impact is calculated at $27 billion over the three-year period.

PG&E’s three-year program includes a capital investment of $11.9 billion to upgrade and expand electric and gas facilities, plus operations and maintenance (O&M) spending of $8.2 billion to maintain existing power generation, electricity and natural gas distribution systems, safety systems, customer care and computer systems.

Of the capital investment approximately 46% will be in electric distribution, 21% in gas distribution, 17.5% in generation, 4.5% in customer care, and 11% in IT and other shared services.

The respective proportions of O&M spend in these categories will be 23.6%, 17.6%, 27.8%, 17.4% and 13.6%.

The report notes that the primary benefits of the proposed investments and spending are to meet the growing and changing energy needs of households, businesses and government agencies, while maintaining service quality and reducing future risks of equipment performance failure, accidents and injuries.

“The long term risks and economic consequences of failure to adequately invest in utility infrastructure and maintenance programs can be dramatic, and minimizing those risks is a fundamental motivation for the proposed capital investment and maintenance spending,” commented Glen Weisbrod, president of EDRG. “While our study could not address the risks of failing to adequately spend to meet those needs, it does show how going ahead with that proposed spending will ultimately lead to money coming back to local businesses in the form of added business sales, and money coming back to residents in the form of jobs and income.”

The report also notes that spending on upgrading local facilities and operations tend to be particularly supportive of jobs for local workers, compared to other forms of spending that merely increase orders for products produced overseas. The largest shares of local jobs supported by the PG&E spending program will be in construction and professional, technical and scientific occupations, followed by jobs in services, wholesale, finance, retail and food services as a result of indirect (supplier) and induced (consumer re-spending) effects.