US-based electric utility PG&E and its subsidiary the Pacific Gas and Electric Company have announced a strategic review of the organisation’s energy business structure and financing, alongside plans to defer approximately $2bn in planned investment in 2027.
The company stated that the moves are intended to help maintain essential safety investments and compliance standards while reducing near-term borrowing costs for California customers.
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A newly formed Strategic Review Committee made up of four independent directors from PG&E’s board will lead the review.
The committee will evaluate regulatory, financial, operational and strategic alternatives to determine the best organisation and financing structure for the company.
PG&E said the review will include consultations with regulators, policymakers and stakeholders in California and focus on achieving a financially sound, investment-grade status.
The objectives outlined for the review include upholding safety performance, improving customer affordability, strengthening system reliability and resiliency, and maintaining commitments to labour agreements, pensions and claims.
As an initial step in this process, PG&E plans to revise its 2027 capital plan by deferring roughly $2bn in planned spending while continuing with around $11.4bn in investments that year.
According to the company, the adjustment would reduce its debt financing needs by $2bn, which is expected to result in lower financing costs for customers.
The company identified specific projects and programmes that can be postponed or delayed to slow capital expenditure growth.
However, it emphasised that funding for critical safety initiatives and compliance requirements, including those related to its Wildfire Mitigation Plan and safety certification standards, will continue unchanged.
PG&E said it would provide further updates on the progress of the strategic review during its regular quarterly earnings calls or in the event of significant developments.
PG&E CEO Patti Poppe said: “Over the last several years, PG&E has made meaningful progress improving safety, reliability and affordability for our customers.
“But California’s wildfire liability framework continues to create financing risks that drive higher costs, affect customer affordability and limit investment in the energy system. Something has to change so that we can better serve our customers. That is why we are taking action today.”
