Detailed Narrative
Wildfire Mitigation and Legislative Progress
PG&E continues to prioritize wildfire mitigation, with operational measures like PSPS and EPSS, alongside long-term infrastructure hardening plans. The company plans to file a 10-year undergrounding plan with the OEIS in Q3 FY26, covering approximately 5,000 miles for years 2028-2037. Combined with existing plans, this would result in nearly 11,000 miles of system hardening through 2037, covering over three-quarters of high-fire threat miles. Management is encouraged by the CEA's report and ongoing legislative discussions for a 'whole of society' wildfire solution, emphasizing the cost of inaction and the need for a model that works for all stakeholders.
Customer Affordability and Rate Reductions
The company has made significant strides in customer affordability, implementing its fifth electric rate reduction since January 2024. This has resulted in a 23% rate decrease for the most vulnerable residential customers and a 13% decrease for other residential customers, translating to approximately $300 less per year. This progress is attributed to PG&E's 'simple affordable model,' which aims for 0% to 3% long-term customer bill growth, driven by O&M reductions, efficient financing, and rate-reducing load growth.
Large Load Growth and Data Center Opportunities
PG&E is seeing healthy forward momentum in rate-reducing large load growth, with projects in the final engineering stage increasing to 4.6 GW. The third cluster study revealed customer interest exceeding an additional 10 GW across multiple regions, including Silicon Valley and the Central Valley, with demand remaining diversified. The company emphasizes that this growth is rate-reducing, contributing to affordability by potentially lowering electric bills by 1% or more per gigawatt of new data center load, while also supporting job creation and tax revenue.
Continuous Monitoring and Operational Efficiency
PG&E is leveraging continuous monitoring, using sensors, smart meters, analytics, and machine learning, to shift from reactive maintenance to proactive risk management. This initiative helped avoid approximately 12 million unplanned customer outage minutes in 2025 and another 4 million minutes in Q1 2026. Since early 2025, 1,484 'good catches' identified developing weaknesses, preventing 23 potential ignitions. This approach also saved an estimated $8 million in capital spend and over $1 million in expenses by enabling lower-cost repairs and reducing emergency response times.
Financial Strategy and Credit Rating Progress
The company's 5-year $73 billion capital plan through 2030 and financing plan remain unchanged, built on conservative assumptions including no new common equity through 2030. PG&E is focused on achieving investment-grade ratings, targeting FFO to debt in the mid-teens and a 20% dividend payout ratio by 2028. Moody's recently revised its outlook to positive, reflecting improved credit trajectory. Achieving investment grade is expected to lower borrowing costs, generating hundreds of millions in customer savings not currently assumed in the plan.
Diablo Canyon Nuclear Plant Operations
The Diablo Canyon nuclear power plant received its final state permit approvals for extended operations through 2030 and a 20-year license extension from the NRC in early April. This underscores the plant's critical role in California's reliability and clean energy goals. While further state action is required for operation beyond 2030, the CPUC and independent studies have highlighted the significant cost benefits and billions of dollars in customer savings from keeping Diablo Canyon online.