Pacific gas and electric - Essay Example

During PG&E’s first year in operation an earthquake destroyed one of its facilities – North Beach Gas Works. However, it’s two other facilities Potrero Works and Martin Station. Between 1905 and 1912 the company’s billing system was based on a flat rate. However in 1912 the decision was taken to begin installing meters, thereby getting rid of the flat rate billing system (Wikipedia). In 1930 the company began the delivery of natural gas to San Francisco and Northern California using what was at that time the longest pipe line in the world.

This pipeline connects the Texas gas fields to Northern California. One of the characteristics of this system is that at 300 miles intervals there was a compressor station that consisted of cooling towers. Having introduced natural gas in 1930 PG&E started the task of retiring manufacturing facilities that were major sources of pollution. Some of the plants ware kept on standby in case they became necessary (Wikipedia). After World War 11, PG&E built numerous facilities including 14 new hydroelectric plants and 5 steam plants.

At the end of 1992 the company operated 173 electric generating units and 85 generating stations. Additionally, it had 18,450 miles of transmission lines and a whopping 101,400 miles of distribution systems (Wikipedia). In the latter part of the 1990’s the company sold off a substantial portion of its natural gas plants leaving only a few. This meant that it had to purchase power from energy generators in order to satisfy the demands of its customers. Even though the purchase price of power was fluctuating PG&E was forced to sell power to its customers at a fixed cost.

The company still maintained its hydroelectric plants along with the Diablo Canyon Nuclear Power Plant. PG&E’s competitors included Enron Corporation which dominated the market and along with other corporations pushed the prices up for electricity. This resulted in the California electricity crisis that began in 2000. In 1995 PG&E Corporation was incorporated. It’s primary purpose to hold shares in Pacific Gas & Electric Company. PG&E Corporation became the holding company of Pacific Gas and Electric Company in 1997.

The company operates in both northern and central California. The company generates income mainly through the sale and delivery of electricity and natural gas to customers (Annual Report 2009). Operations in the 21st Century In 2000 there was a major incident where the company allowed water tainted with cancer causing chromium to seep into underground water supplies which affected residents in the community of Hinkley in California (Joseph Ascenzi 2000). PG&E later filed for Chapter 11 bankruptcy in 2001 and emerged from that situation three years later in 2004 after distributing over $10 billion to creditors (Wikipedia).

Since that time the company has turned around its operations and is currently making profits. The company’s power generating portfolio is extensive and consists of an extensive hydroelectric system, one operating nuclear power plant, one operating natural gas and another gas fired plant which has recently been reconstructed. The company’s hydroelectric portfolio is the largest under private ownership as opposed to government ownership in the Unites States. It draws water from approximately 100 reservoirs along 16 river basins.

Its maximum output is approximately 4,000 mega watts (MW). The only operating nuclear