California homes face PG&E delays for power connections. Frustrated leaders seek options

Home builders, contractors and elected officials in the Fresno region and across Pacific Gas & Electric’s service area are expressing growing frustration over lengthy delays by the utility company to get new homes, subdivisions and building projects hooked up to the electrical grid.

The concerns are reportedly connected to a shortage of transformers needed to provide power to new neighborhoods. Plus, there’s a shortage of work crews and third-party contractors that PG&E uses to install those transformers and connect new homes and other buildings to electrical service.

The problems – including delays of five months or more – are prompting Fresno city leaders to look at a wide range of options for electricity, including the possible formation of its own utility district to sidestep reliance on PG&E.

The issue is expected to be addressed by the Fresno City Council next week.

Mike Prandini, president/CEO of the Building Industry Association of Fresno and Madera Counties, said his colleagues in other parts of state say the problems impact a wide area, including the Central Coast and much of Northern California, in addition to the central San Joaquin Valley.

“PG&E says there’s a worldwide shortage of transformers,” Prandini said. Builders in other utility territories in California, such as Southern California Edison, “are also experiencing some delays, but not to the degree that PG&E is.”

“It’s causing real problems for builders,” Prandini told The Fresno Bee on Friday, explaining developers typically estimate their schedule for building new homes around when PG&E estimates it can deliver transformers to subdivisions.

“But about three weeks ago, PG&E told builders to add 150 days to whatever their previous scheduled date was,” he said. “That’s problematic because customers have already put down payments or deposits on homes, good faith money.”

“Then the home is ready for occupancy, but there’s no power, so they can’t close escrow,” Prandini told The Bee. “People had expected to move in on a certain day, and sometimes they’ve already sold their home or given notice on their apartment. But now they have to wait for the home to close escrow.”

The delays can push a homebuyer’s schedule beyond the date for which they may have locked in a lower interest rate, forcing them to reapply for a new loan at higher rates. “The monthly payment is going to be significantly higher on a 7% interest rate than on a 4% rate,” Prandini said.

PG&E also told builders that budget concerns recently prompted it to cancel contracts with third-party work crews to handle transformer installation, pulling wires to home sites, and connecting houses to the power grid, Prandini said. “They’ve told us they’re going to bring those back, but we haven’t confirmed that,” he added.

A PG&E representative said high demand for new service and the transformer shortage are combining to strain the utility’s capacity.

“Currently, requests for new gas and electric service connections are outpacing our forecasted demand,” PG&E spokesperson Denny Boyles told The Bee in an email Friday evening. “Additionally, available resources to meet the growing demand are both reduced and costly.”

The transformer supply “is outside of PG&E’s control,” he added. “These factors are affecting our ability to execute project schedules within our normal timelines.”

Impacts on available stock

In Fresno, the problems are affecting the city’s efforts to increase the stock of available housing for residents, including affordable-housing projects for lower-income families, as well as other kinds of projects.

“PG&E’s failure to energize local building projects is hurting city homebuyers, taxpayers and business owners – in short, our entire economy,” Mayor Jerry Dyer said in a statement Friday. “I feel the city has no choice but to explore options such as forming a district to supply electricity to our residents and businesses.”

Councilmember Garry Bredefeld noted PG&E’s impact on the city’s focus for adding to its stock of available housing. “Their inability to electrify new housing developments has essentially created a moratorium in the city of Fresno,” Bredefeld said.

“They are creating extensive economic damage to Fresno. … The city will now pursue every available option to bring accountability and meet the power and electrical needs of its residents and businesses.”

Dyer and Bredefeld will be joined by Councilmember Tyler Maxwell at a press conference on Monday at which they, as well as state Assembly Member Jim Patterson, R-Fresno, and State Center Community College District Chancellor Carole Goldsmith, will discuss options.

“With an ever-growing list of obstacles standing in the way of would-be housing developers, it’s time for our city to get serious about exploring concrete policies that will help cut the red tape,” Maxwell said in a written statement. “If we want to create more housing opportunities for our Fresno families, something’s got to change.”

For the State Center Community College District, which operates Fresno City College and community colleges in Clovis, Reedley and Madera County, the delays could potentially affect progress and the planned opening of its new West Fresno center next year as well as other improvement projects, Patterson said.

Agricultural projects are also facing delays, Patterson told The Bee on Friday. “We have packers who are being told they are going to be maybe three years away from having electricity necessary to pack and ship their products,” he said. “The accumulation of these projects that need to be electrified is crossing into all kinds of segments of our community.”

Near Sanger, the general manager of a new citrus packinghouse has been told by PG&E that the utility company won’t be able to provide electrical service for two to three years because it needs to make upgrades to a power substation.

“They’re denying us an energized connection until 2024 or 2025,” said Colby Campbell, general manager of Cobblestone Fruit.

The company has already made a large investment in an all-battery fleet of forklifts as well as custom-built sorting and packing machinery that requires plenty of electricity.

“We’re going to have a lot of advanced equipment for our packing facility. We want to be a flagship for the future,” Campbell said.

The company filed its application for service to PG&E in January. Now, 10 months later, he said he feels like he’s run into a brick wall.

In addition to the two-year wait for upgrades to the Sanger-area substation, Campbell said PG&E has said it would take 18 to 24 months to produce a circuit panel for the packinghouse to be able to provide the electricity. Those delays, coupled with the investments in equipment, are adding up to more frustration.

“Every day we’re not moving forward,” Campbell said. “It feels like we’re just punting the ball.”

Rather than sit idle, Campbell said Cobblestone plans to power its operations with a pair of leased 2,000-kilowatt, diesel-fueled generators.

Each generator will consume 92 gallons of fuel per hour for charging the new battery-powered forklifts and other equipment.

Between the lease on the two semi-trailer sized generators and the fuel for the October-through-June packing season, Campbell estimates the costs at $6 million per year while waiting for PG&E to provide a powered connection to the plant.

“What has stunned me over the past two months has been one situation after another where electricity hasn’t been turned on, and won’t be turned on for a long time,” said Patterson, who is vice chair for the state Assembly’s Utilities and Energy Committee. “It’s a fundamental impediment to the improvements that the electrification would mean for our city and for our region.”

Boyles, the PG&E spokesperson, said the utility company is trying to reduce the effects of the issues on its customers.

“We understand that any delay is frustrating,” he said, “and we remain committed to taking the necessary steps to complete our customers’ projects and continue to keep customers informed of any changes or delays.”

Patterson said he’s heard from various industry sectors that PG&E has consistently rejected offers for developers to hire the third-party contractors and buy transformers to meet the utility’s specifications.

Patterson said he support’s Fresno’s plans to explore alternatives, but will also urge city leaders to include PG&E in that exploration. “I think it is a wise approach that doesn’t presume the inevitable conclusion of the city having its own utility,” he said.

“But the city needs to engage PG&E; it might very well trigger PG&E into seeing that having willing partners with the resources to hire these teams … to allow projects to be completed and give PG&E the resources that they need for their other needs.”