Pacific Gas and Electric Company
Pacific Gas and Electric Company is an American investor-owned utility. The company is headquartered at Kaiser Center, in Oakland, California. PG&E provides natural gas and electricity to 5.2 million households in the northern two-thirds of California, from Bakersfield and northern Santa Barbara County, almost to the Oregon and Nevada state lines.
Overseen by the California Public Utilities Commission, PG&E is the leading subsidiary of the holding company PG&E Corporation, which has a market capitalization of $34.9 billion as of March 10, 2025. PG&E was established on October 10, 1905, from the merger and consolidation of predecessor utility companies, and by 1984 was the United States' "largest electric utility business". PG&E is one of six regulated, investor-owned electric utilities in California; the other five are PacifiCorp, Southern California Edison, San Diego Gas & Electric, Bear Valley Electric, and Liberty Utilities.
In 2018 and 2019, the company received widespread media notoriety when investigations by the California Department of Forestry and Fire Protection found the company's infrastructure primarily responsible for causing two separate devastating wildfires in California, including the 2018 Camp Fire, the deadliest wildfire in California history. Because California holds utilities financially responsible for any fires caused by their equipment, even if maintenance was properly done, the potential of $30B of liability from these fires led the company to declare Chapter 11 bankruptcy in 2019. The company hoped to come out of bankruptcy by June 2020, and was successful, when U.S. Bankruptcy Judge Dennis Montali issued the final approval of the plan for PG&E to exit bankruptcy.
History
Early history
San Francisco Gas
In the 1850s, manufactured gas was introduced to the United States for lighting. Larger American cities in the east built gasworks, but the west had no gas industry. San Francisco hadstreet lights only on Merchant Street, in the form of oil lamps.
Three brothers—Peter, James, and Michael Donahue—ran the foundry that became the Union Iron Works, the largest shipbuilding operation on the West Coast, and became interested in manufacturing gas Joseph G. Eastland, an engineer and clerk at the foundry, joined them in gathering information. In July 1852, James applied for and received from the Common Council of the City of San Francisco a franchise to erect a gasworks, lay pipes in the streets and install street lamps to light the city with "brilliant gas". The council specified that gas should be supplied to households "at such rates as will make it to their interest to use it in preference to any other material". Eastland and the Donahue brothers incorporated the San Francisco Gas Company on August 31, 1852, with $150,000 of authorized capital. It became the first gas utility in the West. Its official seal bore the inscription "Fiat Lux"—let there be light—the same slogan later adopted by the University of California. There were 11 original stockholders, and the three Donahue brothers subscribed for 610 of the 1,500 shares.
The original location for the gas works was bounded by First, Fremont, Howard and Natoma streets south of Market, on what was then the shore of the San Francisco Bay. Work on the plant started in November 1852, and finished a few months later. On the night of February 11, 1854, the streets of San Francisco were for the first time lighted by gas. To celebrate the event, the company held a gala banquet at the Oriental Hotel. Gas lighting quickly gained public favor. In the first year of operation, the company had 237 customers. That number more than doubled the next year, to 563. By the end of 1855, the company had laid more than 6 ½ miles of pipe and 154 street lamps were in operation.
The growing popularity of gas light led to competing gas companies, including the Aubin Patent Gas Company and Citizens Gas Company. The San Francisco Gas Company quickly acquired these smaller rivals. However, one rival did provide serious competition. The Bank of California founded the City Gas Company in April 1870 to compete with the gas monopoly held by the Donahue brothers' operation. City Gas began operation in 1872 and initiated a price war with the San Francisco Gas Company. In 1873, the two companies negotiated a consolidation as a compromise and the Bank of California gained part ownership of "the most lucrative gas monopoly in the West". On April 1, 1873, the San Francisco Gas Light Company was formed, representing a merger of the San Francisco Gas Company, the City Gas Company, and the Metropolitan Gas Company.
San Francisco Gas and Electric
Gas utilities, including San Francisco Gas Light, faced new competition with the introduction of electric lighting to California. According to a 2012 PG&E publication and their 1952 commissioned history, in 1879, San Francisco was the first city in the U.S. to have a central generating station for electric customers. To stay competitive, the San Francisco Gas Light Company introduced the Argand lamp that same year. The lamp increased the light capacity of gas street lamps, but proved to be an expensive improvement and was not generally adopted. Meanwhile, the demand for electric light in the stores and factories of downtown San Francisco continued to grow. The first electric street light was erected in 1888 in front of City Hall, and the electrical grid supporting it was gradually extended. A second generating station was constructed in 1888 by the California Electric Light Company to increase production capacity.New competition also emerged in the 1880s in the form of water gas, an improved illuminant patented by Thaddeus Lowe. The United Gas Improvement Company, a water gas manufacturer organized after purchasing the Lowe gas patents, acquired a lease and then an interest in San Francisco's Central Gas Light Company on November 1, 1883. United was acquired by the Pacific Gas Improvement Company in 1884. Under the management of president Albert Miller, Pacific Gas Improvement developed into a formidable competitor to San Francisco Gas Light. His sons, Horace A. Miller and C. O. G. Miller, acting as Secretary and President, respectively, eventually owned and controlled not only the Pacific Gas Improvement Company but also the Pacific Gas Lighting Company.
In 1888, San Francisco Gas Light built its own water gas plant at the Potrero gas works. The manufacturing of water gas proved successful due to the increased availability of inexpensive petroleum. The company decided to construct a modern gas works with both updated water gas manufacturing technology and a modern coal-gas plant as a hedge against shortages in the supply of oil. In 1891, the North Beach Gas Works was completed under the direction of San Francisco Gas Light president and engineer Joseph B. Crockett. The facility was the largest gas holder in the U.S. west of Chicago.
In 1896, the Edison Light and Power Company merged with the San Francisco Gas Light Company to form the new San Francisco Gas and Electric Company.Consolidation of gas and electric companies solved problems for both utilities by eliminating competition and producing economic savings through joint operation. Other companies that began operation as active competitors but eventually merged into the San Francisco Gas and Electric Company included the Equitable Gas Light Company, the Independent Electric Light and Power Company, and the Independent Gas and Power Company. In 1903, the company purchased its main competitor for gas lighting, the Pacific Gas Improvement Company.
Pacific Gas and Electric Company
John Martin and Eugene J. de Sabla, started out as gold miners along the Yuba River, harnessing hydroelectric power, building hydro plants in Nevada City, and Northern California.In the early 1890s, Martin, de Sabla, Alfonso Tregidgo, and later, Romulus Riggs Colgate, began developing a hydroelectric powerhouse on the South Fork of the Yuba River.
In 1899, Martin and de Sabla formed Yuba Power Company. In 1900, Martin and de Sabla created the Bay Counties Power Company, constructing a 140-mile transmission line for an electric railway in Oakland. In 1903, John Martin and Eugene de Sabla started the California Gas & Electric Company to acquire and merge gas and electric power businesses, and bought many utilities like Oakland Gas Light & Heat Company, United Gas & Electric Company, and, in 1905, San Francisco Gas & Electric Company.
In 1905, Martin and de Sabla formed Pacific Gas and Electric Company.
According to PG&E's 2012 history timeline on their webpage, the San Francisco Gas and Electric Company and the California Gas and Electric Corporation merged to form the Pacific Gas and Electric Company on October 10, 1905. The consolidation gave the California Gas and Electric Corporation access to the large San Francisco market and a base for further financing. The San Francisco Gas and Electric Company, in turn, was able to reinforce its electric system, which until then had been powered entirely by steam-operated generating plants, which could not compete with lower cost hydroelectric power. After the merger, engineers and management from each organization made plans to coordinate and unify the two systems. However, the two firms maintained separate corporate identities until 1911.
PG&E began delivering natural gas to San Francisco and northern California in 1930. The longest pipeline in the world connected the Texas gas fields to northern California, with compressor stations that included cooling towers every, at Topock, Arizona, on the state line, and near the town of Hinkley, California. With the introduction of natural gas, the company began retiring its polluting gas manufacturing facilities, although it did keep some plants on standby. Today a network of eight compressor stations linked by "40,000 miles of distribution pipelines and over 6,000 miles of transportation pipelines" serves "4.2 million customers from Bakersfield to the Oregon border".
In the 1950s and 1960s, at both the Topock and Hinkley compressor stations, a hexavalent chromium additive was used to prevent rust in the cooling towers, which later was the cause of the Hinkley groundwater contamination. It disposed of the water from the cooling towers "adjacent to the compressor stations".