PG&E: 3 Key Takeaways for Long-Term Investors

On its third quarter of 2026 earnings call, held on Oct. 22, 2026, California-based PG&E (NYSE:PCG) reaffirmed its full-year core earnings per share (EPS) guidance of $1.64 to $1.66. High financing costs and wildfire risk discounts continue to weigh on the utility's capital allocation and credit standing, making structural organization key to long-term shareholder value. Three takeaways from the call stand out for long-term investors.

1. High Financing Costs Drive Strategic Review and Corporate Separation Options

High capital costs prompted PG&E to reduce its 2027 capital plan by $2 billion. The utility giant is exploring options from ring fencing (a virtual or legal boundary that separates a portion of a company's assets, funds, or operations from the rest of the business) to asset sales. Re-establishing investment-grade credit ratings is critical to lowering customer debt costs and releasing equity value, as the potential threat of wildfire litigation continues to weigh on the company.

On structure, options range from corporate ring fencing to sales and separations. Today, a discount for wildfire risk burdens all of our businesses, including businesses with little or no exposure to that risk.
-- Patricia Kessler Poppe, Chief Executive Officer

2. Capital Investment in Utility Systems Powers Year-to-Date Core EPS Growth

Core EPS reached $1.24 for the first nine months, fueled by customer capital projects and operating savings. Regulated asset investments remain the central driver of ongoing earnings expansion for the company.

As in prior quarters, customer capital investment continues to be the primary driver of our earnings growth. Contributing 12 cents over the first 9 months.
-- Carolyn J. Burke, Executive Vice President and Chief Financial Officer

3. Ten-Year Undergrounding Filing Aims to Cut Long-Term Maintenance Expenses

Management submitted a $16.6 billion electric undergrounding plan (EUP) covering 5,000 miles to reduce wildfire hazards across high-risk regions in California. The initiative targets $6 billion in long-term savings on vegetation management and operations and maintenance (O&M) expenses. The company seeks to reduce nonfuel O&M by 2% to 4% annually.

At the end of September, we filed our 10-year electric undergrounding plan, or EUP, proposing five thousand additional miles of undergrounding between 2028 and 2037, and building on the approximately 1.9 thousand miles we expect to have completed by the end of next year.
-- Carolyn J. Burke, Executive Vice President and Chief Financial Officer

Looking Ahead

High financing costs squeeze project schedules, yet leadership is acting aggressively to safeguard credit metrics. Improved operations, including 700 cameras enabled with artificial intelligence and lower ignition rates, support the business while management focuses on pricing discipline and regulatory reviews on the path to improving credit ratings.

A key foundational objective is to achieve investment-grade credit ratings, which we view as critical to maximizing the value we can deliver for our customers. While policy reform through legislation remains the fastest and most effective solution, we are also evaluating other options, including possible regulatory reforms, further reassessing our capital allocation priorities, and revisiting our corporate structure.
-- Patricia Kessler Poppe, Chief Executive Officer

Improved ratings across operating units remains essential to unlocking intrinsic value. PG&E is evaluating structural changes to lower customer borrowing costs and maintain long-term capital deployment.

We have got a real sense of urgency because customers are paying today. And, our customers are waiting on our legislature to take the necessary actions to put us back in a position to be investment grade given we meet all of the criteria for investment grade but for California liability policy.
-- Patricia Kessler Poppe, Chief Executive Officer

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