NEWS: Amid political headwinds, PG&E is holding off on roughly $2B in spending next year.

What happened: As we covered, California legislators recently shot down Gov. Gavin Newsom’s plan to reduce costs for utilities when their equipment sparks wildfires. This sent PG&E and Edison International stocks plunging. Officials then settled on a compromise bill...which hit the bin on the CA legislative session’s final day.

The stakes: Edison International has warned that lawmaker inaction could hurt California IOUs’ credit ratings. Right now, the state’s wildfire liability structure “continues to create financing risks,” which raise customer bills and curtail grid investments, PG&E CEO Patti Poppe said in a statement. “Something has to change so that we can better serve our customers.” 

What’s next: The company said it will defer some $2B of work for 2027 to lower its “debt financing needs” (but PG&E will continue to spend on “critical safety programs”). The company is also launching a strategic review to create “a financially strong, investment-grade company.” 

The big picture: California is facing longer, more intense fire seasons—but utilities, survivors, insurance companies, and politicians are butting heads over who covers the worsening fallout. Now, the legislative dead end takes the fight back to square one.