PG&E Q221 0730

Pacific Gas & Electric's 2020-2026 capital-expenditures forecast. The utility plans spending not yet authorized for recovery to purchase its Oakland headquarters and make investments in microgrids and to support its 2023 general rate case request, including the wildfire mitigation balancing account.

PG&E Corp., the parent of Pacific Gas & Electric, on July 29 reported earnings for the second quarter. Not surprisingly, the company's July 29 earnings call focused on the financial impact of public-safety power shut-offs from wildfires and wildfire mitigation.

"Our five-year roadmap includes key system enhancements, safety improvements, and customer-oriented solutions," PG&E Corp. CEO Patti Poppe said in an earnings release.

During the July 29 earnings call, PG&E reported revenue for the second quarter of 18 cents per share under generally accepted accounting principles. The company saw a 10-percent year-over-year earnings growth as its rate base grew 8.5 percent. Net income for the quarter of $401 million was reported in income statements included with the release.

The company's guidance continues to include a $1.3-billion charge expected to be applied in the third quarter as a result of wildfire fiscal responsibility; however, in June, PG&E reached a settlement to recover insurance premiums recorded to its Wildfire Expense Memorandum Account. If approved by the California Public Utilities Commission, PG&E would recover an estimated $450 million for wildfire mitigation expenditures from 2017 to 2019.

"For today, let's get right to it. I have a feeling I know what's on top of mind for you because I know it is for me," Poppe said on the call before going into remarks about California's wildfires.

Poppe acknowledged on the call that a PG&E line worker found a tree leaning onto a PG&E power line, two open fuses on the line and a fire at the base of the tree following an undiagnosed outage at its Cresta Dam Powerhouse around the time the Dixie Fire started on July 13 (see CEM No. 1651). The company has filed a timeline with U.S. District Judge William Alsup, Poppe said. Alsup is overseeing PG&E's felony probation related to the 2010 San Bruno natural gas pipeline explosion.

The Dixie Fire has burned more than 220,000 acres and has impacted around 60 structures, but has not yet been linked to any injuries or fatalities.

PG&E will provide an annual update to its wildfire mitigation plan as required by the CPUC in February. The update will include lessons learned from the July 13 incident.

"There's no way to estimate at this time the value of the damage done on the Dixie Fire," Poppe said. "It's a blessing that there were so few structures and people who live in the path of the Dixie Fire."

The fire is part of a larger issue PG&E is addressing through its vegetation-management program to minimize the proximity of trees to power lines in high-fire-risk areas.

Poppe also talked about PG&E's PSPS protocols, part of a regulatory strategy to prevent catastrophic utility-caused wildfires.

"We continue to get smarter by being data-driven and utilizing technology," she said.

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Rodric has covered energy markets and the industry across the West for more than 15 years, including Arizona, California and Las Vegas, as well as covering the investor relations sector.