PG&E said Wednesday it intends to push off about $2 billion of next year's spending as part of a broader strategic review. The move came after the California Assembly adjourned without voting on wildfire measures backed by Governor Gavin Newsom, who sought to shift some fire liabilities away from investor-owned utilities but could not secure agreement on key elements investors were tracking. PG&E has argued the proposal did too little to limit potential wildfire costs for it and its peers.
Utility executives have warned for years that inaction on wildfire reform risks credit downgrades and higher borrowing costs that ultimately hit customers. Among the provisions utilities wanted included was a ban on insurers suing power companies that cause fires to recover payments made to policyholders.
"We have to take action to protect our customers, to prepare for the future and design PG&E to serve California in such a way that it's not hampered by the sub-investment grade credit ratings that we currently have because of our exposure to this wildfire framework," Chief Executive Officer Patti Poppe said.
Poppe said the company has not finalized which projects will be delayed. Timelines are under review for tying in new generation, serving large new loads like data centers, and supporting new housing developments, among other areas.
PG&E still plans to invest about $11.4 billion in California next year. The company still intends to move into service an initial 1.8 gigawatts of its previously announced data center projects, although Poppe conceded the latest announcement "certainly slows the pipeline." The planned deferral is intended to reduce the need for new debt and help prevent pressure on customer rates. "The affordability drum beat has been loud and persistent, and we need to answer that call," she told investors.
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Safety and compliance work is unchanged. Programs such as PG&E's wildfire mitigation plan and its safety certification requirements will continue as is.
A committee of four independent directors will guide the strategic review, looking at how to best organize and finance the company to serve customers. Alongside reaffirming full-year 2026 earnings guidance, PG&E initiated 2027 non-GAAP core EPS guidance of $1.78 to $1.82. It will re-evaluate its long-term non-GAAP core EPS growth rate and revisit its 2028 to 2030 rate base and capital investment outlooks.
Policy headlines are moving California utility stocks in a hurry. On Monday, PG&E and Edison International dropped 20% or more after a Saturday bill emerged without the full set of measures sought by Newsom and the utilities. Both rebounded at least 6% on Tuesday once it became clear no vote would happen, then slid again Wednesday, with PG&E down 8.2%, Edison International off 6.7%, and Sempra 0.4% lower.
Analysts see multiple paths from here. "PG&E is keeping multiple paths open to narrow its wildfire discount," Bloomberg Intelligence's Nikki Hsu wrote. "If reform fails, restructuring could provide a second path to value." Mizuho's Anthony Crowdell, who cut PG&E to neutral from positive on Monday, said investor questions linger over liability without major reform. He added that some may have wanted Poppe to be tougher on capex, saying, "When you see the share price today, some investors may believe she could have been more aggressive in cutting capex."
Policy risk is making a traditionally sleepy sector feel volatile. To limit additional borrowing, PG&E will postpone around $2 billion in next year's investments, still targets roughly $11.4 billion of spending in the state, and maintains that the first 1.8 gigawatts of data center projects will come online even as the broader pipeline slows. Safety programs stay intact, 2026 guidance stands, and 2027 non-GAAP core EPS is pegged at $1.78 to $1.82, while a board group rethinks growth, rate base, and capital needs for 2028 to 2030. If you own names exposed to California's wildfire liabilities, this week's swings show how quickly legislation and capex plans can rewrite the outlook.