New PG&E Spending Plan Outlines $73B of Capex Through 2030
The leaders of PG&E Corp. have outlined their latest rolling five-year spending plan, which outlines about $10 billion more in spending than its predecessor—with those increases focused on what CEO Patti Poppe says are “bread-and-butter” projects.
Oakland-based PG&E is on pace to spend $12.9 billion on capital projects this year, an increase from $10.6 billion in 2024 and part of a 2024-2028 plan to put to work $63 billion for transmission, resilience and more. But, like many of their peers around the country, Poppe and her team have been playing catch-up to demand growth due to the broader economy’s push toward electrification as well as the surge in data-center activity—although Poppe told analysts Sept. 29 that the latter still needs to truly work its way into PG&E’s capex outlook.
The PG&E team’s new five-year spending plan estimates some $73 billion in projects and forecasts that the company’s rate base will grow to $106 billion by 2030 from about $69 billion today. A notable change from the 2024-2028 plan: The roughly $10 billion increase in spending is due entirely to projects under the auspices of the Federal Energy Regulatory Commission rather than the California Public Utilities Commission. Speaking on a conference call, Poppe said that reflects “bread-and-butter” investments in transmission lines and substations her team has been looking to work on for a while.
“There’s a lot of certainty to that FERC investment,” Poppe said. “There’s always internal competition for what’s the highest-value capital to be deployed at the lowest cost for customers that provides the most benefit. We’re excited to be able to start to pull in that FERC capex. [It’s] much less driven by the appetite for capital from the CPUC and more driven by the needs of our customers and the needs of the system.”
Expected FERC-governed spending in the 2026-2030 plan accounts for $20 billion of the $73 billion total. The latter figure still uses a load growth forecast of between 1% and 3% per year but that figure doesn’t yet include potential growth from the addition of data centers. Poppe said her team’s two studies—the first is well into the engineering stage—project a combined 4.8 gigawatts of demand that would need to be added into PG&E’s forecasts.
Next steps on policy
Poppe and CFO Carolyn Burke unveiled PG&E’s latest spending forecast about two weeks after California lawmakers passed a bill that creates an $18 billion wildfire insurance fund to complement an existing $21 billion pool that is likely to be threatened by claims from large Los Angeles-area fires in January. PG&E will (along with Southern California Edison parent company Edison International Inc.) pay $145 million annually into the new fund, the creation of which is being accompanied by a broader review of policies the Golden State could take to mitigate and manage wildfire risks.
“We know that ignition prevention is one thing but spread needs a lot of focus,” Poppe said. “And we know that CAL FIRE is the best in the business. But in between preventing an ignition and fighting a wildfire […] there’s a need to harden homes and communities, make them defensible so that spread is not such a risk. That’s what will help fix the housing crisis in California and the insurability crisis in California. So as we look to phase two, it’s all about opening the aperture [and] looking at the societal issue that exists […] There’s a lot more to it than utility-caused ignitions. I think that’s the recognition that the situation in L.A. this year helped to really illuminate.”
Shares of PG&E (Ticker: PCG) rose slightly Sept. 29 to $15.06. They are, however, still down more than 10% over the past six months, which has trimmed the company’s market value to about $33 billion.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications T&D World, Healthcare Innovation, IndustryWeek, FleetOwner and Oil & Gas Journal. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.