PG&E Corporate Responsibility and Sustainability Report 2018

Northern California Wildfires

Climate Change

Meeting the climate challenge is central to PG&E’s vision for a sustainable energy future. PG&E remains focused on delivering clean and renewable energy to customers, hardening our infrastructure in response to changing climate conditions and reducing our operational carbon footprint. We also continue to support efforts at the local level to make the communities we serve more resilient to climate threats.

Our Approach

Our commitment begins locally but extends to state and international levels. PG&E leaders joined California’s delegation at the 2017 COP23 international climate talks in Bonn, Germany, as part of our ongoing commitment to combatting climate change. We voiced our support as part of the We Are Still In coalition, an alliance representing a broad cross-section of the U.S. economy in pursuit of climate action, following the Trump administration’s decision to withdraw from the Paris climate accord.

At the state level, PG&E stood with California Governor Jerry Brown as he signed into law Assembly Bill (AB) 398, which extends California’s cap-and-trade program for reducing greenhouse gas emissions and provides cost protections for energy consumers. The current program grants distribution utilities emissions allowances that are sold into the market, generating proceeds that are returned to customers. PG&E also supported AB 617 which addresses local air quality concerns in affected communities.

In addition, PG&E supported Senate Bill (SB) 350, which increased the state’s Renewables Portfolio Standard (RPS) to 50 percent by 2030 and doubled state energy efficiency goals. In September 2018, SB 100 was signed into law and increases and accelerates the RPS targets and requires state energy agencies to include a 100 percent clean energy target in their planning goals.

PG&E also remains actively engaged with policymakers and various stakeholders on the implementation of SB 32, which requires that the California Air Resources Board (CARB) ensure a 40 percent reduction in greenhouse gases by 2030 compared to 1990 levels.

In the near term, California’s Global Warming Solutions Act, or Assembly Bill (AB) 32, requires California to gradually reduce its greenhouse gas emissions to the 1990 level of 431 million metric tons of carbon dioxide-equivalent (CO2-e) by 2020. The cap-and-trade program covers emissions from PG&E’s fossil-fuel power plants, natural gas compressor stations and electricity imported into California. In 2015, the cap-and-trade program was expanded to cover emissions from the combustion of natural gas delivered to PG&E customers.

Reporting Our Impacts

We believe it is essential that investors, customers, policymakers and other stakeholders have access to information that allows them to assess and understand the risks and opportunities associated with climate change.

PG&E reports its greenhouse gas emissions to the California Air Resources Board and the U.S. Environmental Protection Agency (EPA) on a mandatory basis. On a voluntary basis, PG&E reports a more comprehensive emissions inventory to The Climate Registry, a nonprofit organization. Each year, PG&E also reports its greenhouse gas emissions and climate change strategies to the CDP (PDF), an international not-for-profit organization that requests information on behalf of institutional investors.

Engaging Our Customers and Communities

PG&E actively works with customers to help them achieve energy savings and greenhouse gas emission reductions through some of the nation’s leading programs and incentives for energy efficiency, demand response and solar installation. These efforts include helping local governments develop strategies and implementation plans to save energy and reduce emissions, and connecting them with PG&E programs and other resources to help them meet their energy goals.

PG&E is also actively supporting efforts at the local level to make the communities we serve more climate-resilient.

Addressing Our Own Carbon Footprint

As part of PG&E’s broader commitment to address climate change, we launched the Million Ton Challenge, a new voluntary five-year carbon reduction goal for PG&E’s operations. The goal is to avoid one million tons of cumulative greenhouse gas emissions from our operations from 2018 through 2022, compared to a 2016 baseline.

To accomplish that, PG&E has developed a long-range plan to reduce emissions across several business areas:

  • Save energy through energy-efficient and more sustainable facilities
  • Reduce methane emissions from natural gas operations
  • Continue to deploy a smarter, cleaner fleet of PG&E vehicles
  • Adopt environmentally responsible products and services, with an early focus on electric substation equipment

Additionally, in step with California’s evolving energy policy, in June 2016 Pacific Gas and Electric Company announced a Joint Proposal with labor and leading environmental organizations that would increase investment in energy efficiency, renewables and storage beyond current state mandates while phasing out PG&E’s production of nuclear power in California by 2025.

Clean Energy Policy

PG&E supports the decarbonization of California’s economy through timely, durable, effective and affordable policy and energy solutions. We remain committed to climate actions to reduce greenhouse gases and address the impacts of global warming—from deploying clean energy technologies to continuing to lead and innovate on energy efficiency.

As required by SB 32, CARB adopted its 2030 Scoping Plan Update, which established the state’s plan for achieving the 2030 GHG target. We are actively engaged in state regulatory and legislative climate change activities, including those around implementing California’s cap-and-trade program, to meet the state’s greenhouse gas emissions reduction goals at the lowest possible cost to customers.

We also remain focused on other Scoping Plan measures such as Low Carbon Fuel Standard implementation and the reduction of Short-Lived Climate Pollutants per SB 1383, which includes specific 2030 emission reduction goals for methane, fluorinated gases and anthropogenic black carbon.

At the federal level, the EPA is charged with implementation and enforcement of the Clean Air Act. The administration of President Donald Trump has led to significant uncertainty with regard to what further actions may occur regarding climate change. Upon taking office, President Trump issued an executive order to freeze all regulations issued in the 60 days preceding his inauguration and directed the EPA and the White House to remove climate change-related materials and webpages. In October 2017, the EPA issued a notice of proposed rulemaking to formally repeal the Clean Power Plan regulations that were approved during the Obama administration and targeted toward combatting climate change. The Trump administration is expected to take further action to substantially limit climate-related regulatory and funding activities. In light of the policy reversal at the federal level, the State of California has indicated that it intends to continue its leadership on climate change, nationally and globally.

Central to our overall approach is engaging at the state, federal and international levels through a variety of policy think tanks and advocacy groups, such as the Center for a New Energy Economy, Georgetown Climate Center, Center for Climate and Energy Solutions, Alliance to Save Energy, Edison Electric Institute, Bipartisan Policy Center, Electric Power Research Institute, International Emissions Trading Association, Business Council for Sustainable Energy, Natural Gas Downstream Initiative, Electric Drive Transportation Association, and California Electric Transportation Coalition.

Planning for Potential Climate Change Impacts

As a provider of critical infrastructure services, PG&E faces a variety of risks from a changing climate, including heat waves, more frequent and extreme storms and wildfires, drought, subsidence and rising sea levels. Building greater climate resilience involves understanding the impacts of climate change on our business and being prepared to withstand and rapidly recover from major disruptions to service caused by changing climate conditions and weather events.

PG&E has established an internal Climate Resilience Officer Committee, as well as a staff-level Climate Resilience Working Group, to coordinate work across enterprise risk management; internal culture, integration and planning; and external engagement. Using climate science as a foundation, the Committee is overseeing a multi-year research and action plan to close gaps in our approach to addressing the impacts of climate change.

Key aspects to PG&E’s approach include:

  • Near-term planning through robust emergency response plans and procedures to address near-term risks, including more extreme storms, heat and wildfires.
  • Risk assessment and operational planning through a multi-year, comprehensive risk assessment process to prioritize infrastructure investments for longer term risks, such as sea level rise. Among other things, PG&E completed a quantitative risk assessment (PDF) that was submitted to the California Public Utilities Commission (CPUC) in 2017 and associated foundational work to help PG&E plan for and mitigate adverse impacts from climate change. These include developing tools for climate resilience screening and data visualization, performing research and metrics development, completing staff training on climate resilience, and working across our lines of business to develop plans for asset prioritization.
  • External engagement at the federal, state and local levels on climate change adaptation and resilience. This includes PG&E’s participation in the U.S. Department of Energy’s Partnership for Energy Sector Climate Resilience as well as the Technical Advisory Committee to the Governor’s Office of Planning and Research Integrated Climate Adaptation and Resiliency Program.

We also continue to make substantial investments to build a more modern and resilient gas and electric system that can better withstand extreme weather and natural disasters. PG&E’s progress and perspective can be found in Pacific Gas and Electric Company’s Climate Change Vulnerability Assessment and Resilience Strategies report (PDF) and its 2017 Risk Assessment Mitigation Phase (RAMP) filing with the CPUC.

While last year’s winter rains helped to begin replenishing water supplies, PG&E continues to treat water as a precious resource in our operations and our facilities, while working with customers to help them do so as well. Given the strong nexus between water and energy—about 20 percent of California’s electricity usage goes toward moving, treating, disposing of, heating and consuming water—responsible water management will continue to be a priority for PG&E.

With regard to increased electricity demand from more extreme, persistent and frequent hot weather, PG&E believes its strategies to reduce greenhouse gas emissions—such as energy efficiency and demand response programs, infrastructure improvements and the support of renewable energy development and storage—will help address the state’s evolving energy demands.

We also continue to engage with key stakeholder groups and initiatives on climate adaptation, including numerous cities and counties, the Bay Area Council, the Resilient by Design Bay Area Challenge and a variety of other forums at the state and local levels.

2017 Milestones

In 2017, we continued to minimize our carbon footprint and prepare for the consequences of a changing climate:

  • Delivered clean energy to customers. With 33 percent of the electricity delivered to customers in 2017 coming from renewable sources of energy, we reached California’s 2020 renewable energy goal three years ahead of schedule.
  • Reduced methane emissions. We avoided the release of more than 269,000 metric tons of CO2-e emissions. These savings were achieved primarily through upgrades to gas pipelines and other infrastructure and by implementing both drafting and cross-compression, where we transfer natural gas from one pipeline to another during pipeline construction and repair projects rather than releasing it into the atmosphere.
  • Reduced our sulfur hexafluoride (SF6) emissions. We reduced our SF6 emissions by more than 25,000 metric tons of CO2-e and achieved an SF6 emission rate of 0.5 percent, exceeding the state’s 1 percent target for 2020. SF6 is used as an electrical insulating material in high-voltage circuit breakers and gas-insulated switchgear.
  • Quantified climate risks. As part of Pacific Gas and Electric Company’s first Risk Assessment Mitigation Phase filing with the CPUC, we included a quantitative analysis of how a changing climate may be increasing risk to PG&E and the customers we serve, and we proposed foundational work to help PG&E anticipate and plan for weather- and climate-change-related events.

Measuring Progress

Mandatory Emissions Reporting

Under AB 32’s annual reporting requirements, PG&E reports greenhouse gas emissions to CARB. These reports include emissions from our electric generation facilities, natural gas compressor stations, natural gas supplied to customers and the fugitive emissions from our natural gas distribution system and compressor stations.

The following table shows the greenhouse gas emissions data PG&E reported to CARB under AB 32.

PG&E Emissions Reported to the California Air Resources Board: CO2-e Emissions from Owned Power Generation Footnote 1 and Operations
2015 2016 2017
Total CO2-e Emissions (metric tons) 2,875,094 2,261,032 2,292,218
Humboldt Bay Generating Station 186,330 171,892 199,338
Gateway Generating Station 1,305,914 963,413 1,111,268
Colusa Generating Station 1,382,850 1,125,772 981,613
 
CO2 Emissions Rates (lbs/MWh)
Humboldt Bay Generating Station 1,010 1,029 1,017
Gateway Generating Station 868 871 881
Colusa Generating Station 853 852 866
Fossil Plants 868 872 940
All Plants Footnote 2 208 153 146
 
Other CO2-e Emissions (metric tons)
Natural Gas Compressor Stations Footnote 3 362,417 295,851 262,060
Distribution Fugitive Natural Gas Emissions 676,458 605,690 630,249
Customer Natural Gas Use Footnote 4 43,022,557 38,697,656 38,202,174
  • 1. PG&E’s owned generation comprised more than 50 percent of our delivered electricity in 2017.1
  • 2. Includes all PG&E-owned generation sources, including nuclear, hydroelectric and renewable energy.2
  • 3. Includes, but is not limited to, compressor stations and storage facilities emitting more than 25,000 metric tons of CO2-e annually.3
  • 4. Includes emissions from the combustion of natural gas delivered to all entities on PG&E’s distribution system, with the exception of gas delivered to other natural gas local distribution companies. This figure does not represent PG&E’s compliance obligation under AB 32, which is equivalent to the above-reported value less the emissions from fuel that is delivered to covered entities, as calculated by CARB.4

PG&E also reports the greenhouse gas emissions from our facilities and operations to EPA under EPA’s mandatory reporting requirements.

Voluntary Emissions Reporting

Benchmarking Greenhouse Gas Emissions for Delivered Electricity
(Pounds of CO2 per MWh)
U.S. Average Footnote 1 998
Pacific Gas and Electric Company Footnote 2
2016 294
2015 405
2014 435
2013 427
2012 445
2011 393
2010 445
2009 575
  • 1. U.S. Environmental Protection Agency eGRID 2016.1
  • 2. Because PG&E purchases a portion of its electricity from the wholesale market, we are not able to track some of our delivered electricity back to a specific generator. Therefore, there is some unavoidable uncertainty in PG&E’s total emissions and emissions rate for delivered electricity.2

PG&E’s voluntary greenhouse gas emissions reporting showed that PG&E’s CO2 emissions rate was our lowest level on record in 2016, the most recent year for which verified data are available. PG&E’s emissions rate of 294 pounds of CO2 per megawatt-hour of delivered electricity represented a more than 25 percent drop from the prior year’s figure of 405. The emissions rate takes into account both PG&E-owned power generation and power purchased from third parties.

In addition, PG&E saw a corresponding reduction in total carbon dioxide emissions from its electricity sales, falling 4.6 million metric tons in 2016.

From year to year, several factors affect PG&E’s power mix and emissions, including the availability of clean hydro power and renewable energy in our energy mix, customer electricity demand, as well as the availability and flexibility of the power plants in our portfolio.

Total Greenhouse Gas Emissions by Source Category
(Million Metric Tonnes CO2-e) Footnote 1
2014 2015 2016
Total 55.69 54.39 50.52
Delivered Electricity Footnote 2 15.91 14.81 10.23
Electricity Transmission and Distribution Line Losses 1.24 0.95 0.68
Customer Natural Gas Use 36.89 36.57 37.59
Process and Fugitive Emissions from Natural Gas Systems 1.10 1.50 Footnote 3 1.54
Gas Compressor Stations 0.35 0.34 0.26
Transportation 0.10 0.11 0.11
Facility Gas and Electricity Use 0.01 0.05 0.04
Sulfur Hexaflouride (SF6) from Electrical Equipment 0.02 0.05 0.05
Other Emissions 0.01 0.01 0.01
  • 1. The protocols for measuring greenhouse gas emissions differ between mandatory and voluntary reporting regimes, resulting in some differences in the table above compared to PG&E’s emissions reported to the California Air Resources Board.1
  • 2. Because PG&E purchases a portion of its electricity from the wholesale market, we are not able to track some of our delivered electricity back to a specific generator. Therefore, there is some unavoidable uncertainty in PG&E’s total emissions and emissions rate for delivered electricity.2
  • 3. The increase in PG&E’s overall emissions reported can be attributed to changes in emissions factors used for deriving emissions and new, more granular data requirements.3
PG&E’s Scope 1, 2 and 3 Greenhouse Gas Emissions
(Million Metric Tons CO2-e) Footnote 1
2014 2015 2016
Subtotal 55.69 54.39 50.52
Scope 1 4.00 4.90 4.24
Scope 2 1.29 1.00 0.71
Scope 3 Footnote 2, Footnote 3 50.40 48.50 45.57
  • 1. Because PG&E purchases a portion of its electricity from the wholesale market, we are not able to track some of our delivered electricity back to a specific generator. Therefore, there is some unavoidable uncertainty in PG&E's total emissions and emissions rate for delivered electricity.1
  • 2. The emissions associated with purchased electricity are considered Scope 3 per The Climate Registry’s Electric Power Sector Protocol for the Voluntary Reporting Program, Annex I to the General Reporting Protocol, June 2009, Version 1.0.2
  • 3. This figure includes the emissions from the combustion of natural gas delivered to all entities on PG&E’s distribution system, with the exception of gas delivered to other natural gas local distribution companies, as well as gas delivered to PG&E facilities such as power plants, compressor stations and offices, the emissions of which are reported separately.3
PG&E’s Scope 1 Greenhouse Gas Emissions
(Million Metric Tons CO2-e)
2014 2015 2016
Total Scope 1 Greenhouse Gas Emissions 4.00 4.90 4.24
SF6 from Electrical Equipment 0.02 0.05 0.05
Facility Natural Gas Use 0.06 0.01 0.01
Gas Compressor Stations 0.35 0.34 0.26
Owned Fossil Generation 2.42 2.88 2.26
Process and Fugitive Emissions from Natural Gas System 1.10 1.50 Footnote 1 1.54
Transportation 0.10 0.11 0.11
  • 1. The increase in PG&E’s overall emissions reported can be attributed to changes in emissions factors used for deriving emissions and new, more granular data requirements.1
PG&E’s Scope 2 Greenhouse Gas Emissions
(Million Metric Tons CO2-e)
2014 2015 2016
Total Scope 2 Greenhouse Gas Emissions 1.29 1.00 0.71
Electricity Transmission and Distribution Line Losses 1.24 0.95 0.68
Facility Electricity Use 0.05 0.05 0.03
PG&E’s Scope 3 Greenhouse Gas Emissions
(Million Metric Tons CO2)
2014 2015 2016
Total Scope 3 Greenhouse Gas Emissions 50.40 48.50 45.57
Purchased Electricity (Net) 13.49 11.93 7.97
Customer Natural Gas Use Footnote 1 36.89 36.57 37.59
Other Scope 3 emissions Footnote 2 0.01 0.01 0.01
  • 1. This figure includes the emissions from the combustion of natural gas delivered to all entities on PG&E’s distribution system, with the exception of gas delivered to other natural gas local distribution companies, as well as gas delivered to PG&E facilities such as power plants, compressor stations and offices, the emissions of which are reported separately.1
  • 2. Other Scope 3 emissions include the greenhouse gas emissions from business air travel, waste management and employee commuting.2

Looking Ahead

As we work toward a low-carbon future, PG&E has already reached California’s 2020 renewable energy goal three years ahead of schedule, and we will continue to do our part to further reduce greenhouse gas emission levels through energy efficiency and infrastructure investment, support for distributed private resources, alternative-fueled vehicles and battery storage, and active engagement on state and local policy.

We will also continue to support climate resilience efforts at the state and local level to better prepare for, withstand, and recover from extreme events and other risks related to climate change.