PG&E filed a decade of burying wires the day Sacramento voted to cut the profit on burying wires
PG&E filed a 10-year plan to bury 5,000 miles of wire and claims $117 billion of benefits, more than 10 times an investment figure it never gives. Sacramento signed a law the day before that targets the profit on exactly this work, and three underground vaults exploded in San Francisco the day it was filed.
Vincent Jiang · 2 min read
The timing is almost comic. On 1 October, PG&E filed its 10-Year Electrical Undergrounding Plan with the state: about 5,000 miles of distribution line buried from 2028 to 2037 across more than 30 counties, promising a 98% cut in ignition risk and 90% fewer outages on the lines it moves 1. That same afternoon, three of its already-underground vaults exploded in San Francisco's Financial District, sending flames into the air, closing six blocks and triggering a five-hour shelter-in-place 5.
The unnumbered bill
The release claims $117 billion in long-term benefits, "more than 10 times the value of the proposed investment" 1. It never states the investment. Run the arithmetic on what the record does carry: PG&E's quarterly capital spending has climbed from $2.6 billion in Q3 2024 to about $3 billion a quarter, and the company still plans roughly $11.4 billion of California capex in 2027 even after deferring $2 billion of it to cut borrowing costs 37. A decade of undergrounding at that run rate is a per-mile question the press release answers with adjectives. Even at $3 million a mile, 5,000 miles approaches $15 billion; the plan's 10x framing implies a denominator far larger, and no source gives it.
PG&E's capex run rate has climbed to about $3 billion a quarter
Data
| Capital expenditure | |
|---|---|
| Q3 '24 | $2.61B |
| Q4 '24 | $2.83B |
| Q1 '25 | $2.64B |
| Q2 '25 | $3.07B |
| Q3 '25 | $2.93B |
| Q4 '25 | $3.16B |
| Q1 '26 | $3.36B |
| Q2 '26 | $2.97B |
Sacramento just cut the return
The day before the filing, Governor Newsom signed SB 905 in the session's final hours, directing the CPUC to consider lowering utility profit on lower-risk investments, "such as undergrounding power lines," where utilities often earn 9% or 10% on new transmission projects 2. PG&E opposed the bill, warning it would discourage investment 2. Its Sep 2 strategic review, which re-evaluates the 2028-2030 capital and rate-base outlooks, already reads like a company bracing for exactly that 3.
Who is watching the ledger
The math for shareholders is simple: PG&E needs high-single-digit returns on a decade of buried wire to earn its way back to investment grade, and the legislature just named that asset class for a haircut. The stock closed at $12.17, down 24% year to date, against a $19.22 analyst average target after UBS's 23 September cut to $14 6. Director John Larsen bought 7,500 shares at $12.20 on 30 September, two days before the filing, a $92,000 vote of confidence 4. Ratepayers get a different bill and no denominator at all. Energy Safety reviews the plan next; the CPUC rules on the costs; Q3 earnings land 22 October 3.
The stock trades 37% below the average analyst target
Data
| Value | |
|---|---|
| Close, 1 Oct | $12.17 |
| UBS target, 23 Sep | $14 |
| Average analyst target | $19.22 |
No source states what the 5,000-mile plan will cost; that number, and whether $117 billion survives the SB 905 regime, is what October 22 and the regulatory record will have to show.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
