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Patricia Poppe of PG&E announces $2 billion spending cut as California lawmakers fail to pass comprehensive wildfire liability reform

Patricia Poppe, CEO of PG&E, announced that the utility will defer $2 billion in planned capital spending for 2027, reducing the total investment to $11.4 billion. This decision follows the failure of California lawmakers to pass a comprehensive overhaul of wildfire liability rules. While the utility will preserve critical safety programs, the reduction will delay projects such as new housing, renewable energy, and data centers. Governor Gavin Newsom pushed for a broad reform measure to limit individual lawsuit costs and prevent insurance companies from recouping losses from utilities. However, lawmakers rejected the most ambitious parts of the proposal, including the ability for insurance companies to sue utilities to recover costs. The current system, which forces utilities to act as uncompensated insurers of last resort, is described by Poppe as unsustainable and expensive for customers. Poppe stated that the lack of legislative solutions has impacted the company's credit rating and borrowing costs. She expressed hope that the legislature will return to the table to finish the work. The utility's stock price fell significantly following the news, with some analysts noting that the company is seeking to restore an investment-grade credit rating to unlock future growth.

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