PCG Secures DOE Funding for 19 Hydropower Projects in California
PG&E Corporation PCG has been awarded $34.5 million worth of funding by the U.S. Department of Energy’s (DOE) Grid Deployment Office to support 19 hydropower projects across California. PCG will use the money to strengthen grid resiliency, enhance dam safety and reduce environmental impacts associated with these hydroelectric facilities.
This new funding will help PG&E to upgrade key hydropower sites situated at Potter Valley, Lake Fordyce and a few more places, solidifying its footprint in the expanding hydropower generation market.
PCG’s Position in Hydropower Generation
The need for investments in green energy has never been more dire. With the effects of climate change becoming increasingly evident, the shift to renewable energy sources like hydropower has been expanding rapidly in recent times to effectively reduce greenhouse gas emissions. Since hydropower plants can provide power to the grid immediately, this source of energy serves as a flexible and reliable form of backup power during major electricity outages or disruptions.
United States is a major forerunner in the renewable energy industry. The country’s hydropower electricity generation capability also remains commendable. Evidently, U.S. conventional hydropower capacity increased 2.1 gigawatts (GW) from 2010 to 2022 due to a combination of upgrades to existing plants, new projects and retirements. Hydropower accounts for 27% of renewable electricity generation in the United States as well as 93% of all utility-scale energy storage capacity (as published by a DOE report in September 2024).
In particular, California remains a major contributing state to the nation’s hydroelectricity generation capacity. Per the U.S. Energy Information Administration (EIA), annual hydropower generation in this state increased more than 80% from 2022 to 2023. Looking ahead, EIA expects similar hydropower generation in California and a 6% annual increase in hydroelectricity generation in the United States in 2024 (per its April 2024 report).
PCG is well-positioned to benefit from the solid hydropower generation expansion projections in California as well as the entire nation, with the company operating the second-largest private hydropower systems in the United States, generating about 3,867 megawatts (MW) of electricity. The latest funding from DOE will enable PCG to reap the benefits of the aforementioned expansion opportunities.
PCG’s Peers in Focus
Other companies, which are increasing investments in hydropower generation and thus expected to gain from the expanding U.S. hydropower generating capacity, are discussed below.
Brookfield Renewable Partners L.P. BEP: It is a major player in the renewable energy space, with a strong focus on hydropower. Hydroelectric power is the largest segment in BEP’s portfolio. It accounts for 47% of its funds for operations.
The Zacks Consensus Estimate for BEP’s 2024 sales indicates year-over-year growth of 18.7%. The consensus estimate for 2025 earnings per share (EPS) indicates year-over-year growth of 36.8%.
Duke Energy Corporation DUK is the second-largest investor-owned hydroelectric operator in the United States. It owns 27 hydroelectric stations, which form an integral part of its balanced energy mix on the road to net-zero carbon emissions by 2050.
The company has a long-term earnings growth rate of 6.1%. The Zacks Consensus Estimate for DUK’s 2024 sales indicates year-over-year growth of 4.7%.
CMS Energy’s CMS subsidiary, Consumers Energy, operates 13 hydroelectric plants along five rivers that run through the state of Michigan. Hydroelectric power at these 13 facilities generates approximately 1% of the total capacity provided by Consumers Energy.
The company has a long-term earnings growth rate of 7.6%. The Zacks Consensus Estimate for CMS’ 2024 sales indicates year-over-year growth of 4.5%.
PCG Stock’s Price Movement
Shares of PCG have gained 17.9% in the past six months compared with the industry’s 20.1% growth.
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PCG’s Zacks Rank
PCG currently carries a Zacks Rank #4 (Sell).
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Pacific Gas & Electric Co. (PCG) : Free Stock Analysis Report
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