PG&E (PCG) Investor Update summary

Legislative and regulatory developments

• Senate Bill 254 established an $18 billion Wildfire Fund Continuation Account, reducing upfront utility funding and lowering one utility's share by 25% to 47.85%, while introducing new investor protections, a disallowance cap, and securitization options for wildfire claims.

• Utilities are not required to make large upfront contributions, with a portion of funding contingent and only required if needed to settle claims; customer annual charges are about $3 per month.

• The bill clarifies the disallowance cap calculation, allows for securitization of $6 billion in fire risk mitigation capital ($2.9 billion allocated to the company), and enables early securitization of 2025 fire costs.

• The Catastrophe Response Council oversees the fund, with a comprehensive policy reform report due by April 2026 and legislative action expected in 2026.

• Enhanced protections include improved prudency standards, liquidity, reimbursement mechanisms, and a disallowance cap based on the year of ignition.

Financial guidance and capital allocation

• 2025 non-GAAP core EPS guidance is $1.48–$1.52, up 10% from 2024, with at least 9% annual core EPS growth targeted through 2030.

• Five-year capital plan totals $73 billion, including $2.9 billion of securitized CapEx, with average annual rate base growth of about 9% from 2026–2030 and weighted average rate base projected at $69 billion in 2025.

• No new common equity is expected to be required through 2030; dividend payout ratio targeted at 20% by 2028 and held through 2030.

• Rate reductions implemented in September 2025, with further decreases expected in 2026 and flat to declining bills in 2027.

• Additional $5 billion in CapEx opportunities identified, with disciplined evaluation for inclusion in the plan.

Credit and financing strategy

• Maintaining investment-grade ratings is a priority, with FFO to debt targeted in the mid-teens; Fitch recently upgraded the parent credit rating to investment grade and S&P maintains a positive outlook.

• Parent debt stands at about 10% of total debt, below peer averages, and the plan no longer includes a legacy $2 billion parent debt paydown.

• Financing plan prioritizes conservative planning, improved cash flow, and a 20% dividend payout target by 2028.

• Financing plan is designed to be flexible, with a focus on efficient capital deployment and ongoing O&M reductions.