Patti Poppe, CEO of PG&E, highlighted the ongoing struggle for wildfire liability reform in California during an appearance on CNBC's 'Mad Money.' The urgency of this issue is underscored by the recent 20% drop in PG&E's shares and a 21% decline for Edison International, following lawmakers' failure to pass a proposal that would limit the financial liabilities of utility companies for wildfire damages.
Consumer advocacy groups have criticized these efforts, arguing that utilities must enhance their wildfire prevention measures. Poppe remains hopeful that the California legislature may reconvene to address this critical issue, emphasizing the importance of leadership from Governor Gavin Newsom and Assembly Speaker Robert Rivas.
The stakes for PG&E are high; the company announced a $2 billion reduction in its 2027 capital spending plan, now totaling $11.4 billion, which will delay housing and renewable energy projects. This unresolved liability risk complicates PG&E's efforts to regain an investment-grade credit rating, which is essential for reducing borrowing costs and attracting investors.
Poppe noted that lower borrowing costs could have saved customers approximately $600 million over the past two years. Achieving an investment-grade rating would not only facilitate greater investment in PG&E but also enhance its long-term growth prospects, allowing for increased earnings and dividends