PG&E to Trim $2 Billion from 2027 Capital Plan Amid Wildfire Liability Dispute

Pacific Gas & Electric said it will cut about $2 billion from its planned 2027 capital spending, attributing the reduction to the financial strain of California's wildfire-liability framework. The utility indicated that the cuts will target projects that can be delayed, while preserving funding for critical wildfire-safety measures.

The announcement comes after the state legislature ended its session without reaching an agreement on how investor-owned utilities should share wildfire costs. Lawmakers had been considering a proposal that would shift some liability to insurance companies, but the effort collapsed in the final days of the session.

Assemblywoman Cottie Petrie-Norris, chair of the Assembly Utilities and Energy Committee, warned that higher borrowing costs for utilities could be passed on to ratepayers. "With utilities, like any company, in order to build stuff, they’ve got to borrow money," she told a local TV station, adding that increased financing costs would ultimately affect customers.

The broader debate centers on subrogation, the practice by which insurers that pay wildfire victims seek reimbursement from utilities deemed responsible for the blaze. Governor Gavin Newsom and the utilities have supported limits on subrogation, while opponents argue such limits could shift financial burdens onto homeowners and insurers.

PG&E's chief executive rejected claims that the spending cut is intended to pressure legislators, saying the decision reflects the difficulty of financing operations under the current liability regime and that customers bear the ultimate cost of the state's financing structure.