PG&E CEO Patti Poppe said Wednesday she’s hopeful the fight over California wildfire liability reform isn’t over.
“We really are hopeful that they’ll be able to find their way to get back to the table and finish the job for our customers,” Poppe said on CNBC’s “Mad Money.” “The people of California are waiting.”
Shares of PG&E and fellow utility Edison International have fallen 20% and 21%, respectively, this week after lawmakers failed to advance a proposal that would have limited the amount of money individuals could seek from utility companies whose equipment ignited wildfires. PG&E is a utility company that provides electricity and natural gas to millions of people in California.
Consumer advocacy groups, including those for wildfire victims, have criticized efforts to shield utilities from liability for fires caused by their equipment, arguing the utilities must do more on prevention. Last year’s deadly Eaton fire near Los Angeles was caused by an idle transmission tower owned by Edison, according to fire officials in Los Angeles County.
Speaker of the Assembly Robert Rivas issued a statement that said, “Sacramento shouldn’t settle when wildfire survivors lost everything. Over the past several weeks, we have spent hundreds of hours at the table with Californians from every side of this fight, and the verdict is clear: The proposal before us does not yet deliver the relief, accountability or meaningful reform that Californians deserve.”
But Poppe said the effort isn’t necessarily dead and the legislature could also return for a special session to take up the issue.
“We’re so close, and I just think that under the leadership of [California Governor] Gavin Newsom and Speaker Rivas, I think they can really do the job,” she said.
The stakes are significant for PG&E. The utility announced Wednesday a strategic review and cut $2 billion from its 2027 capital spending plan, bringing planned investment to $11.4 billion. Poppe said the reduction will delay housing starts and renewable-energy projects in California.
The unresolved wildfire liability risk has also complicated PG&E’s push to regain an investment-grade credit rating. Poppe said the company has spent the past six years strengthening its operations, including reducing wildfire risk, improving reliability and lowering customer rates. But she said the potential for outsized wildfire liabilities continues to make financing more expensive and deter some investors.
“If investors and banks see the risk too high, they charge more, or they don’t enter the stock at all,” Poppe said.
Poppe estimated that lower borrowing costs could have saved customers “$600 million just in the last two years of debt issuances.” She said reaching investment grade would open the door to greater investment in the business and strengthen PG&E’s long-term growth prospects.
“It would allow us to pull that $2 billion back into the plan,” Poppe said. “It would allow us to grow our earnings at 9% plus every year, it would allow us to continue to grow our dividend.”
