PG&E’s Request to Exclude $2.6 Billion in Wildfire-Related Costs in CPUC Capital Structure Review Advances

PG&E Corporation (NYSE: PCG) is seeking California Public Utilities Commission approval to exclude approximately $2.6 billion in wildfire-linked expenses from its authorized debt-to-equity calculations—a significant move that could affect its financing costs.

What PG&E Is Seeking

At the CPUC’s August 13 energy voting meeting, PG&E’s proposal (Application A.24‑08‑004) to exclude wildfire-related expenses—including about $277 million from the Dixie Fire, $1.2 billion from the Kincade Fire, and $1.4 billion from a Department of Water Resources loan—was held for further review. The matter is now set to be addressed at a CPUC hearing on September 3, 2026 under a §311(e) procedural requirement.

This resolution also includes SDG&E’s and SCE’s proposals tied to annual Low Carbon Fuel Standard filings, but PG&E’s capital structure request is the standout for investors, as it directly impacts the company’s cost of capital and financial flexibility.

Why It Matters

By excluding these wildfire- and loan-related costs from rate base calculations, PG&E could effectively lower its allowed return on equity or reduce borrowing costs, potentially easing financial pressure tied to its heavy wildfire liability load. The outcome will influence investor sentiment and PG&E’s funding capacity in the near term.

Key Dates

• August 13, 2026 – PG&E’s request was discussed at the CPUC voting meeting and held to September 3 for further review.
• September 3, 2026 – Scheduled date for CPUC consideration of PG&E’s Application A.24‑08‑004.

What to Watch

Investors should monitor the September 3 CPUC hearing closely—it may signal whether PG&E can secure regulatory relief on wildfire-related capital treatment. A favorable decision could support improved financial flexibility, while denial may constrain PG&E’s capital cost margins.