PG&E Defers $2 Billion in 2027 Spending After California Wildfire Bill Dies

PG&E cuts its 2027 capital plan by $2 billion

SACRAMENTO — PG&E announced Wednesday that it will defer approximately $2 billion in planned 2027 spending and begin a strategic review after California lawmakers ended their session without approving wildfire-liability legislation.

The utility reduced its 2027 capital investment plan from $13.4 billion to approximately $11.4 billion. PG&E said the lower plan also reduces its expected borrowing needs by $2 billion and that it will no longer provide a five-year capital plan or an earnings-growth forecast beyond 2027.

PG&E identified several categories that could be delayed or deferred: connections for new housing, interconnections for renewable generation, technology upgrades and service for large electricity users beyond the first 1.6 gigawatts. The company did not publish a project-by-project list, a county breakdown or a schedule showing exactly which customers will be affected.

That distinction is essential. PG&E has announced a smaller investment plan and named categories at risk; it has not announced that every pending housing or renewable-energy connection will be canceled. Developers and customers should wait for project-specific notices before assuming their work has been delayed.

Read the source: Reuters: PG&E defers $2 billion and launches a strategic review ↗

The utility says unresolved wildfire liability is raising financing costs

PG&E Chief Executive Patti Poppe said California's wildfire-liability framework creates financing risks, raises costs, affects customer affordability and limits energy-system investment. The company said it would not wait for lawmakers to change the policy framework before adjusting its plans.

That is PG&E's explanation for the decision, not an independent finding that the Legislature alone caused every dollar of deferred work. Capital plans can also respond to interest rates, credit ratings, regulatory decisions, construction timelines and expected electricity demand.

The strategic review is not a bankruptcy filing, a breakup order or a government takeover. PG&E has not announced rolling blackouts, service shutoffs or an immediate reduction in emergency response. The confirmed action is a smaller 2027 capital plan and a review of the company's financing and investment options.

The company's announcement transforms an unresolved policy dispute into a potential real-world constraint on housing, clean-energy and grid projects. State regulators and lawmakers now need to demand a transparent list of what will be deferred, how safety work will be protected and whether ratepayers could face additional costs.

Read the source: The Wall Street Journal: PG&E shares fall after the utility reduces planned spending ↗

The Assembly ended the session without taking a vote

SACRAMENTO — A last-minute California wildfire compensation and liability package died Tuesday after Assembly leaders declined to bring Senate Bill 492 to a floor vote, ending the extended legislative session without the promised reforms.

The official legislative record still lists SB 492 in the Assembly floor process and shows that it required a two-thirds vote because it contained an urgency clause. Multiple California newsrooms reported that Assembly Speaker Robert Rivas announced the chamber would not take up the measure. Without an Assembly vote, the bill did not pass and nothing in the proposal became law.

Rivas said the compromise did not provide the relief, accountability or structural reform Californians deserved. Governor Gavin Newsom also said the scaled-back measure failed to address the underlying crisis, despite supporting elements of the negotiations before the deal collapsed.

Lawmakers have promised additional hearings, but no replacement bill, special-session schedule or enactment date has been announced. Any claim that California completed a new wildfire compensation law Tuesday is false.

Read the source: PG&E Corporation: Investor relations and company overview ↗

What Californians lost when SB 492 died

The final version of SB 492 would have created a process intended to move eligible wildfire claims through California's existing Wildfire Fund more quickly. It also proposed new wildfire-prevention reporting and data-sharing requirements.

The bill would have restricted the sale of certain insurance recovery rights to private-equity firms and hedge funds, placed new limits on some attorney fees and blocked utility executives from receiving bonuses after qualifying utility-caused catastrophes.

Those provisions were proposals, not active protections. Fire survivors cannot rely on them, and utility executives are not subject to the proposed new bonus rule, because the Assembly never approved the bill.

The failure also means no new administrator or expedited process created by SB 492 will begin handling claims. Existing state law, court processes and the current Wildfire Fund framework remain in place unless a later measure changes them.

Read the source: California Legislative Information: Official status and amended text of Senate Bill 492 ↗

Newsom's broader utility protections had already been stripped out

Newsom's original plan was substantially broader than the bill that died. It sought to reduce financial exposure for investor-owned utilities after fires linked to their equipment, including limits affecting insurer recovery claims, noneconomic damages and some local-government compensation.

Wildfire survivors, consumer advocates, insurers and trial lawyers attacked those ideas as a utility bailout that could shift more costs away from power companies and onto victims or insurance customers. Utilities argued that California's liability rules threaten investment, borrowing costs, electricity rates and the stability of the wildfire fund.

By the weekend, negotiators had removed the most controversial liability protections. The resulting compromise did not cap survivor compensation and did not eliminate insurers' ability to seek reimbursement from utilities. That distinction matters: the Assembly did not reject the full original Newsom plan Tuesday because most of that plan was no longer in the final bill.

What died was a narrower package focused on claims administration, prevention measures and selected accountability rules. The much larger fight over who ultimately pays after a utility-sparked wildfire remains unsettled.

Read the source: CalMatters: Wildfire liability bill dies without an Assembly vote ↗

Wall Street pressure has intensified the political fight

Shares of major California utilities fell sharply after investors concluded that the compromise offered fewer liability protections than companies had sought. Utility executives warned legislative leaders that continued uncertainty could reduce investment and raise financing risks.

PG&E shares fell approximately 20% Monday after the bill was amended and were down again Wednesday morning following the reduced spending plan, according to Reuters. Market movement shows how seriously investors view the liability dispute, but it does not determine what policy best protects fire survivors and ratepayers.

Some lawmakers and survivor advocates openly questioned whether utility stock prices were influencing the decision. Others said the package had been rushed through closed-door negotiations and was too incomplete to justify an urgency vote at the end of the session.

Those explanations are political arguments from the participants. The confirmed action is narrower: Assembly leaders declined to hold the vote, and SB 492 did not pass.

Read the source: Los Angeles Times: Lawmakers kill wildfire bill after utility complaints ↗

The next fight could come in fall hearings or a special session

Assembly leaders say they will hold hearings in the fall and continue working on a more comprehensive approach. Newsom has not ruled out further action before leaving office in January, but his office had not announced a special session Tuesday evening.

A future proposal will have to balance four competing pressures: full and timely compensation for survivors, affordable and available property insurance, reliable investment in the electric grid and protection against another utility bankruptcy that could push costs onto ratepayers.

None of those problems disappeared with the end of the session. California still faces catastrophic wildfire risk, unresolved claims from past disasters and a liability system contested by survivors, insurers, utilities, investors and consumer advocates.

The Legislature spent weeks negotiating and still ended without a vote. Californians should demand that the next round happen in public, with bill text released early enough for survivors and ratepayers to understand who gains protection, who absorbs risk and who pays.

Read the source: San Francisco Chronicle: Assembly declines to take up the pared-down wildfire deal ↗

Confirmed now — and what remains unresolved

Confirmed: PG&E reduced its planned 2027 capital program by approximately $2 billion; the company says some housing connections, renewable interconnections, technology upgrades and large-load work could be delayed; the Assembly did not vote on SB 492; and the bill did not pass.

Not completed: a faster statewide claims system, new utility-executive bonus restrictions, comprehensive utility-liability reform, a replacement bill or a scheduled special legislative session.

Not yet known: the specific projects PG&E will defer, how many customers or housing units could be affected, whether regulators will challenge the revised plan or whether lawmakers will respond with a special session.

The legislation's collapse is not a victory for fire survivors simply because Newsom's earlier liability limits were removed. Survivors also lost provisions supporters said could have accelerated compensation and increased accountability.

What’s the Scoop With Broach will update this report if PG&E identifies affected projects, legislative leaders publish a replacement proposal or the governor formally calls lawmakers back to Sacramento.

Read the source: Associated Press: The proposed compromise and California's wildfire-liability dispute ↗