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PG&E Execs Outline Capex Boost For ’28-‘32

May 26, 2023
Transmission and interconnection investments will grow alongside undergrounding spending.

The leaders of PG&E Corp. expect to spend an average of $13 billion on capital projects from 2028 to 2032, an increase of roughly a third from their plans from now to 2027.

Speaking to analysts gathered for the company’s investor day in Sam Ramon, California, the team led by CEO Patti Poppe detailed its safety and efficiency work and outlined a capex budget spanning the turn of the decade expected to total $67 billion. That’s an increase from the newly launched five-year plan of $52 billion—which was itself sizably larger than the $39 billion the parent of Pacific Gas & Electric spent from 2018 through 2022, mainly because of increases in risk reduction work.

CFO Carolyn Burke PG&E’s electric operations are taking a growing share of the company’s spending, rising from 64% this year to 70% in 2027. Work on undergrounding thousands of miles of wires accounts for some of that increase but CFO Carolyn Burke said maintenance work not related to wildfire risk reduction also will grow and added that transmission and interconnection investments will become more prominent, too.

“There are no big bets,” Burke said. “There’s no giant power plant, there’s no mega infrastructure project here. Instead, what we have is a diversified portfolio of programs and projects.”

Parts of the plans Poppe, Burke and their fellow executives outlined echo those of California utility neighbor Edison International Inc., the parent of Southern California Edison. That company recently outlined 2025 general rate case priorities that included returning to a traditional infrastructure investment pace to help make up for projects set aside while it prioritized wildfire risk reduction in recent years.

In addition to the step up in spending expected starting in 2028, Burke and Poppe also noted that they see the potential to add $5 billion to the $52 billion they anticipate spending through 2027. Such investments, they said, will require PG&E to continue to eliminate inefficiencies and waste in its operations. The company’s leaders have set an annual $200 million (non-fuel) savings target.

“The appetite for capital on this system is extraordinary,” Poppe told analysts. “Our customers want and expect a cleaner grid. They want a more reliable grid, they want safer communities and hometowns. […] We have to do that in a way that’s affordable for customers.”

Shares of PG&E (Ticker: PCG) slipped to $16.43 May 25. Over the past six months, they have climbed about 8%, growing the company’s market capitalization past $40 billion.

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