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Pacific Gas and Electric Company

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Pacific Gas and Electric Company

The Pacific Gas and Electric Company (PG&E) is an American investor-owned utility (IOU). 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 (IOUs) 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 (Cal Fire) 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.

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 had street 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.

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.

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