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PG&E to Issue up to $4.6B in Debt in 2026 to Fund Capital Plan
•February 17, 2026
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Why It Matters
The rate cuts demonstrate how high‑density loads can offset utility costs, while unresolved wildfire policy risks could jeopardize PG&E’s credit standing and future investment capacity.
Key Takeaways
- •Data centers drive 1% rate cut per GW added
- •PG&E reduced rates 11% since 2024
- •Wildfire ignitions fell 43% from PG&E equipment
- •$73B five‑year capital plan unchanged, $4.6B debt slated 2026
- •Credit upgrades hinge on California wildfire fund reforms
Pulse Analysis
The surge in data‑center construction across California has become a hidden lever for utility economics. Each gigawatt of new, high‑density load allows PG&E to spread fixed infrastructure costs over a larger customer base, translating into roughly a one‑percent reduction in average residential rates. Coupled with rapid electric‑vehicle charging demand and a resurgence in state manufacturing, this load growth offsets the traditional cost pressures utilities face, especially in a market where ratepayers are highly price‑sensitive.
However, the upside is tempered by California’s volatile wildfire liability landscape. PG&E reported a 43% decline in equipment‑related ignitions, yet the broader Wildfire Fund remains a financial wildcard. Credit rating agencies have signaled conditional upgrades, awaiting legislative reforms to the fund’s structure, which the CEO described as regressive. The utility’s strategy to avoid new equity while planning $4.6 billion of debt issuance in 2026 reflects a cautious balance between maintaining investment‑grade ratings and funding the capital‑intensive upgrades required for grid resilience.
Looking ahead, PG&E’s $73 billion five‑year capital plan will hinge on policy outcomes and the continued expansion of large‑load customers. If California enacts reforms that reduce the cost burden on ratepayers, the utility can sustain its rate‑cut trajectory and reinforce its investor‑owned model. Conversely, stalled reforms could force a reassessment of capital allocation, potentially slowing infrastructure projects and affecting long‑term affordability goals. Stakeholders should monitor the upcoming Wildfire Fund report and related legislative activity as key determinants of PG&E’s financial health and market positioning.
Deal Summary
Pacific Gas and Electric (PG&E) announced it will issue up to $4.6 billion in debt in 2026 as part of its five‑year $73 billion capital plan, aiming to achieve investment‑grade credit ratings and fund large‑load growth driven by data centers and EV adoption. The debt issuance is intended to support rate reductions and infrastructure investments.
Article
Source: Utility Dive (Industry Dive)
Data center growth has helped PG&E cut rates 11% since 2024, CEO says
But California’s “regressive” wildfire policies have become a burden for ratepayers, CEO Patti Poppe said.
Aerial view of a data center being constructed inside “Data Center Alley” in Ashburn, Va., in 2024. Large load growth from developments like data centers has helped PG&E cut electric rates for the fourth time in two years, CEO Patti Poppe said during a fourth‑quarter earnings call. Gerville via Getty Images
Accelerated large‑load growth has helped PG&E cut electric rates for the fourth time in two years, but wildfire costs continue to drag down affordability measures, PG&E Corporation CEO Patti Poppe said Thursday during a fourth‑quarter earnings call.
The company’s total large‑load pipeline declined from 9.6 GW in September 2025 to 7.3 GW at the end of the year, but more projects are entering final engineering phases. PG&E maintains that it can reduce customers’ electric bills by about 1 % for each gigawatt of new load on the system.
Beyond data centers, Poppe said rapid EV adoption is driving demand for electricity in the PG&E service territory, and that the company also expects to see some growth from California’s manufacturing sector.
“You do not think about California when you think about manufacturing, but let me remind everyone on this call that California manufactures more products than any other state in the nation,” she said. “I expect that those companies intend to grow, and so we are working to make sure that we can supply their growth as well, whether it is robotics or silicon manufacturing equipment and chip manufacturing equipment. That all lives here.”
By the numbers: PG&E Corp. 2025 full‑year results
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3.6 GW – Large‑load projects that have entered final engineering phases.
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43 % – Decline in wildfire ignitions tied to PG&E equipment.
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$73 billion – Five‑year capital plan.
Carolyn Burke, PG&E Corporation’s executive vice president and chief financial officer, said the company did not plan to update its $73 billion capital plan at this time despite its view that there could be an additional $5 billion in growth opportunities on the horizon. The company’s current valuation would not support expanding the plan, so it will focus on affordability and prioritizing capital associated with new load growth that would help lower electric rates.
The company does not plan to issue any new equity under its current five‑year plan, but will issue up to $4.6 billion in debt in 2026 as it focuses on achieving investment‑grade credit ratings, Burke said. Although Fitch Ratings upgraded PG&E’s credit ratings last September, other credit rating agencies have declined to do so pending California wildfire policy reforms, Poppe said.
The California Earthquake Authority, which oversees the state’s Wildfire Fund that reimburses utilities for wildfire‑related legal claims, is expected to issue a report with recommendations for reforms on April 1. That report is expected to trigger a legislative process to reform the fund that Poppe hopes will result in new legislation before the end of the session.
While Poppe said she wasn’t ready to take a position on specific reforms, she agreed with a Jan. 30 report by the California Public Utilities Commission that the current structure of the fund is “regressive” and unfairly burdens ratepayers.
“It is hard for people to believe and see that you can raise profits and lower rates all at the same time. That is why our performance is so important and why our mantra that performance is power really holds true at this time as we work to educate all of the legislators…that we can, in fact, invest in long‑term infrastructure, make the system safe, make the system resilient and lower costs,” Poppe said.
If the legislative process does not yield effective reforms, Poppe said all aspects of the company’s current plans would be subject to re‑evaluation to ensure progress toward investment‑grade credit ratings.
“The current valuation is absolutely not sustainable,” she said. “And we are ringing that bell in every corner of California that we can find and in every conversation to make sure that people understand the value of the investor‑owned utility model and how important attracting low‑cost, high‑quality investment is.”
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