How PG&E Adds Months-Long Delays, Costs to New Housing

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n San Francisco's Mission District, three newly built backyard cottages are ready for older adults and lower-income families. But, no one will be able to move in for the foreseeable future: Even though electrical wiring is installed, the apartments don't have power.

Executive Director Sam Moss of the Mission Housing Development Corporation is proud of what his nonprofit has built on property the organization owns. The new homes are within walking distance of two BART stations, major bus lines and grocery stores.

"Mission Housing figured out how to convert our garages with our own funds," he said. "We did not go to any government agency and ask for a grant. If that isn't what we need right now in our housing crisis, then I don't know what it is."

But, during a recent meeting between Mission Housing and PG&E, an inspector told Moss he didn't know when the company would be able to connect the buildings, due to internal delays at PG&E.

"Then he left, with no explanation and no estimation of when someone was going to come," Moss said. "We're talking about three very high-quality, 100% affordable units for seniors and low-income families [that are] just going to sit vacant."

A spokesperson for PG&E said the company needed more information about this project before it could respond. But after KQED inquired about it, Moss said Mission Housing received a call from a PG&E inspector saying they would come to the construction site in mid-April to reassess the project.

Connecting new buildings to the grid is a problem developers say is not unique to PG&E, but they cite the company as the worst offender — with delays that can add months or even years to a project before it opens.

It's not a new issue, but developers like Moss say it's exacerbated by pandemic-induced supply chain problems, coupled with the increasing severity of storms and wildfires, and more demand for housing.

As California attempts to build 2.5 million homes by 2031, developers say utility companies will have to adhere to a stricter timeline to get more housing completed faster.

A new bill introduced by state Sen. Scott Wiener, SB 83, attempts to do just that. It would set an eight-week deadline for utility companies to connect newly constructed buildings. If a project is delayed further, the company would have to bear the cost, which is currently borne by the developer.

"We're not asking for perfection," Wiener said. "PG&E is not just falling short of perfection. It's causing huge problems with getting projects open and connected to the grid. There has to be a more structured system. There has to be an actual time line and consequences for failing to meet that time line."

Lynsey Paulo, spokesperson for PG&E, said in a statement the company is committed to working with policymakers on the legislation.

"We will continue to work with lawmakers to ensure the right policy and regulatory frameworks are included to support the state's goals," she said.

A problem of their own making

Between 2018 and 2022, Southern California Edison and PG&E connected just over 10,000 commercial and residential buildings, according to self-reported data both investor-owned utilities provided to Wiener's office.

But PG&E took nearly six times as long: Southern California Edison took an average of nine days to turn on the lights after a building finished construction. For PG&E, the average was 64 days. As of mid-February, the wait time for nearly 30% of new buildings under PG&E's purview was more than 90 days, according to PG&E.

From Wiener's perspective, this is a problem of the utility behemoth's own making, in part because it expanded services across the state and because it's the only utility company most developers can work with in the areas it operates.

"It was PG&E's decision to become unsustainably large," Wiener said. "To complain that, 'We don't have the resources because we're so big, which is a choice that we made,' is not a convincing argument."

Others take a more sympathetic approach. Corey Smith, executive director of the nonprofit Housing Action Coalition, which is co-sponsoring the bill, said the company is struggling to replace aging equipment as it responds to increasingly severe wildfires and storms.

"It's quite literally the person power and where to send a finite number of employees with aging infrastructure," Smith said. "It's a real challenge."

PG&E provides electricity to more than 5.5 million customers across the state, in a service area that stretches across 70,000 square miles.

The utility has so much power – both literally and figuratively – many developers refused to speak with KQED on the record out of fear of retribution. Moss is worried about that, too.

"I'm worried about the real retribution, which is units not coming online," he said. "It's seniors remaining homeless, families and kids remaining homeless because PG&E refuses to do the right thing."

'A black hole'

Getting a housing project approved and ready to start construction is arduous enough, but developers say connecting to the grid adds its own complexity: It involves a slew of paperwork, permits and approvals. There's an initial inspection, and then developers submit formal plans to the utility.

But getting PG&E inspectors out to construction sites has become frustrating. Larry Florin, CEO of nonprofit affordable housing developer Burbank Housing, said he scheduled an inspector to come to a site in Napa County earlier this month.

The morning of the inspection, Florin got a call saying PG&E was dealing with weather issues they had to tend to first.

"The earliest they could come back would be six weeks," he said. "We're constantly dealing with issues like that."

Paulo said that while PG&E wants to work closely with developers and builders, responding to more frequent weather events and natural disasters has "required significant financial and workforce resources."

"This work, compounded with a significant growth in electric demand after decades of flat demand, has resulted in some projects being delayed or rescheduled," she said.

But Florin said there are other ways PG&E can hold up a project. Once an inspector is able to sign off on plans, and a building gets built, developers have to order specialized equipment to hook up the building to the grid.

But it's not always clear what equipment is needed. PG&E's requirements change from one project to another, Florin said, and the company often doesn't provide proper guidance, leaving developers like Burbank in the dark.

"When you reach out to PG&E, it's like a black hole," he said. "You get nothing."

Moss said that lack of communication can lead to expensive, mid-construction changes that are especially challenging for nonprofit housing developers.

"When PG&E comes and says, 'Actually, you've got to move this over here,' it might sound like one quick little change, but one little change has a domino effect," he said. "And then your whole schedule is thrown off. And with especially 100% affordable housing, we don't have the ability to spend an extra million dollars in change orders."

Moss faced just such a situation recently with a project Mission Housing is currently building adjacent to the Balboa Park BART station. The nonprofit needed temporary power to build 131 affordable apartments there. Moss said they waited almost a year for PG&E to provide a cost estimate to the San Francisco Public Utilities Commission (SFPUC), which buys wholesale power from PG&E, so SFPUC could turn on the power.

PG&E spokesperson Melissa Subbotin said, at that point, “SFPUC did not authorize PG&E to proceed with temporary generation on this project.”

But, Moss said that’s because PG&E also required Mission Housing to make expensive changes to the project in order to do that. He called upon elected officials to pressure PG&E to work out a compromise with the SFPUC, including Wiener and San Francisco Mayor London Breed, who sent letters to the utility. But it was to no avail.

"We had to spend hundreds of thousands of dollars building [the units] on generators," Moss said. "We had to spend money on generators and fuel all because PG&E refused to get power to build this building."

When the project was initially proposed, Mission Housing envisioned including a child care facility along with retail space on the ground floor. Now that's in jeopardy.

"We have significantly less money from the overall construction loan to build out our ground floor spaces because we had to spend it on fuel," he said. "Mission Housing is coming out of pocket to pay for things."

The project is nearing completion, and the nonprofit hopes to begin leasing the apartments in June. But it still hasn't been hooked up to the grid, and Moss isn't sure when it will be.

"It's the uncertainty that's the hardest thing to deal with," he said.

This story has been updated to include responses from PG&E representatives.