PG&E is trimming about $2 billion from the grid investment it had planned for 2027, a retreat the utility links directly to California’s unresolved wildfire-liability problem. The company still expects to spend approximately $11.4 billion in 2027, but some reliability upgrades, new customer hookups and new energy-supply connections may take longer than customers were told.
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The reduction lands while California asks utilities to connect far more solar, wind and batteries than the grid can currently absorb. Canary Media reported on Nov. 5 that more than 60 renewable and storage projects due online by 2030 are affected, adding at least 15 gigawatts if built. Developers and state officials now wonder whether a financing decision in San Francisco could slow a statewide energy buildout.
What PG&E says it is deferring in 2027
PG&E’s own explainer on the revised 2027 investment, dated Sept. 11, says the utility is reducing planned investment by about $2 billion because borrowing costs are too high. It points to California’s inverse condemnation standard, under which utilities can be held liable for wildfire damage even when they follow safety rules. That exposure can deter investors and weigh on PG&E’s credit rating, which raises the price of capital. PG&E says the deferred projects are not yet in customer rates, and that safety and compliance work, including its Wildfire Mitigation Plan, continues.
The page offers no category-by-category dollar split. It does say PG&E invests four to five times more each year than it earns, which means it must raise outside money before it builds anything, and that it has opened a strategic review of how the company is organized and financed. Canary Media’s coverage describes the move as a postponement of roughly $2 billion in grid work planned for 2027 and notes the review followed worsening uncertainty over wildfire liability.
PG&E frames the step as reprioritizing rather than passing higher borrowing costs to customers now. Even after the reduction, $11.4 billion would make 2027 one of the largest investment years in the company’s history by its own description, so the cut trims a very large plan instead of abandoning it. The distinction matters to developers and builders waiting in line, because the items likeliest to take longer are the ones tied to growth: new customer connections and new energy-supply connections.
The failed wildfire-liability deal in Sacramento
The trigger was legislative. Gov. Gavin Newsom did not broker a wildfire-liability deal before the session ended, and CalMatters reported that the bill died without a vote on the final day. Shares of the parent companies of PG&E and Southern California Edison fell sharply. PG&E is still recovering from its 2019 bankruptcy, which followed its equipment starting the 2018 Camp Fire.
Mari Becker, PG&E’s vice president and treasurer, laid out the chain of cause and effect: wildfire financial uncertainty leads to weaker credit, and weaker credit leads to more expensive capital. In her telling, that raises bills for customers and constrains investment the state needs. Southern California Edison faces a jury trial over damages from the Eaton Fire, which could deplete the state’s $21 billion wildfire fund.
Consumer advocates read the episode differently. Some call the cutbacks blackmail and oppose state efforts to limit shareholder payouts, while a state-mandated report warns that inaction could push utilities toward financial collapse. Fernando Valero of the Los Angeles Department of Water and Power said wildfire liability burdens public utilities as well as investor-owned ones, so changes to business models alone will not solve it. California voters also weighed Proposition 45, a measure to speed environmental reviews that PG&E and Edison backed and that early tallies showed heading toward defeat.
Interconnection delays and California’s 6-gigawatt goal
PG&E sent letters to about 25,000 customers warning of grid connection delays, and NBC Bay Area reported estimates ranging from one to six months for housing and office projects to 2027 and beyond for city and county transportation and public works.
At an Oct. 28 Assembly hearing, Jan Smutny-Jones of the Independent Energy Producers Association warned that delays could damage solar project finances because projects must finish by 2030 to keep federal tax credits. Missing that date would raise costs by at least 30%, he said, adding: “Miss that date, game over.” The delays also threaten the state’s goal of 6 gigawatts of new clean energy and storage by 2032, set in a California Public Utilities Commission procurement decision, and could force another delay in retiring more than 3 gigawatts of aging coastal gas plants.
Canary Media notes that solar and batteries are the fastest-growing U.S. power resources and that the affected projects are most likely utility-scale solar, batteries or both, which is where California has been adding most of its capacity. Developers already struggled to connect to the transmission grid before the deferrals, so a slower distribution and substation program lands on top of an existing queue.
Alex Jackson of American Clean Power-California wants lawmakers back at the negotiating table but urged a plan B that includes competitive transmission developers and build-transfer agreements. Assemblymember Cottie Petrie-Norris proposed using the state’s $325 million transmission accelerator fund for competitive projects. Governor-elect Xavier Becerra, who beat Steve Hilton, will inherit the unresolved issue, and neither PG&E nor Canary Media’s reporting says which 2027 projects will slip first.
This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.
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