PG&E Corp. is deferring approximately $2 billion in planned investments for 2027, as its CEO, Patti Poppe, expressed frustration with California's wildfire liability rules, which she claims are making it increasingly difficult and expensive to finance the state's power grid.
Poppe stated during an interview that the utility is being squeezed by the system for assigning wildfire costs, impacting its ability to fund necessary infrastructure upgrades. "We are unable to fund PG&E’s continued transformation at our current pace," Poppe said. "Financing our work has become increasingly difficult and expensive due to the way California law assigns the cost of wildfire to utility customers and investors."
The announcement follows the recent rejection of a proposed deal by Governor Gavin Newsom aimed at overhauling utility wildfire liability. The proposal, which would have limited insurers' ability to recover wildfire losses from utilities, faced significant opposition, leading lawmakers to adopt a narrower compromise focused on survivor payments and utility accountability.
PG&E's board has initiated a strategic review of the company, forming a four-member committee to examine potential organizational and financial changes. The utility is seeking a structure that would strengthen its finances, improve customer affordability, and attract stable, long-term investment.
At the core of Poppe's concerns is California's wildfire liability system, where utilities face substantial costs if their equipment is found to have caused a wildfire, even if safety measures were followed. Insurers can also seek reimbursement after paying customer claims for destroyed property. Poppe argued that this system increases the perceived risk for banks and investors, driving up borrowing costs.
"The people who fund building that equipment, banks and investors, face more risk here," Poppe said. "Because of the way California law assigns the cost of wildfire to utility customers and investors, risk goes up for both of them."
Poppe pushed back against the notion that PG&E's announcement was intended to pressure lawmakers, stating, "Our customers need the Legislature to finish the job. Our customers will pay the price of their inaction."
The company indicated it still anticipates investing about $11.4 billion in California next year. The deferred investments will not affect critical safety programs or wildfire mitigation obligations, but will instead involve delaying or slowing projects that can be postponed. The company's shares, along with those of Edison International, saw a decline following the news, as investors braced for continued wildfire liability risks.