Pacific Gas and Electric Co. is proposing to revise its rate of return on equity to 12% as a result of its participation in California's wildfire fund and its expected effect on its wildfire-related risk profile.
The PG&E Corp. utility previously requested that the California Public Utilities Commission approve a rate of return on equity for its electric generation, electric and natural gas distribution, and natural gas transmission and storage rate base of 16% starting Jan. 1, 2020. This request reflected the wildfire-related challenges facing the utility.
The wildfire bill, which established the fund, does not directly impact Pacific Gas and Electric's test-year 2020 cost of debt. However, the utility said in an Aug. 2 filing that the estimated cost of debt will be impacted by its exit financing as part of its future Chapter 11 reorganization plan.
The utility plans to file a new cost of capital application on or about the time it emerges from its Chapter 11 bankruptcy proceeding. Pacific Gas and Electric said it is unable to predict the timing and outcome of the proceeding.