PG&E deferred approximately $2 billion in planned 2027 investment this past September, a move that impacts new customer connections and clean-energy interconnections. A company executive relayed this information to California lawmakers during an Oct. 28 hearing of the Assembly Utilities and Energy Committee, as Yuba-Sutter News - The Sidekick reported.
At the hearing, Marie Becker, PG&E’s vice president and treasurer, told lawmakers that the utility estimates wildfire-related borrowing premiums on bonds issued since 2017 are projected to generate about $4.1 billion in additional interest expenses over the lifetimes of those bonds. Becker specifically stated that these financing costs are ultimately borne by California ratepayers.
Becker further explained that these figures are symptomatic of a broader financing issue. She noted that the ongoing risk of wildfires and potential liability can exert downward pressure on utility credit ratings. This pressure, in turn, makes it more expensive for the utility to secure necessary loans for various critical initiatives, including reliability work, wildfire mitigation efforts, clean-energy projects, and connecting new housing and business developments. The hearing record also indicated that PG&E is considered below investment grade under S&P’s rating scale, although portions of the available transcript addressing this detail were corrupted.
Lawmakers and witnesses at the committee hearing also engaged in discussions regarding the AB 1054 wildfire fund. This fund was established in the aftermath of the 2017-18 wildfires and PG&E’s subsequent bankruptcy. The Cade, Dixie, and Eaton fires are anticipated to draw resources from this fund, with the hearing record suggesting that the Eaton fire alone could potentially utilize a significant portion of its remaining balance. The exact amount of funds that will be available for future fires remains uncertain, pending more accurate estimations of Eaton-related costs.
The Oct. 28 hearing concluded without producing a documented vote, a formal recommendation, or a resolution to the complex liability debate. Both the $2 billion in deferred investment and the $4.1 billion in estimated additional interest expenses were presented as PG&E’s own projections. To verify the underlying calculations and identify the specific deferred investments, additional company filings or further hearing materials would be required. What happens next for these deferred investments and the ultimate solvency of the wildfire fund remains an open question.
