The California Public Utilities Commission voted 5-0 on Sept. 3 to approve an alternate decision giving PG&E a limited capital-structure exemption tied to an interest-free Department of Water Resources loan for Diablo Canyon-related costs, while rejecting the utility’s bid to exclude wildfire-related costs from its regulatory capital structure.
According to the commission’s meeting summary, the decision in Item 2A grants PG&E a narrow adjustment because the DWR loan is a unique, forgivable financing mechanism that could distort the utility’s debt-to-equity ratio if treated like ordinary capital. The same decision denied PG&E’s request to strip wildfire-related costs from the capital structure and requires additional reporting in PG&E’s next cost-of-capital application, including a true-up on surplus equity tied to the Dixie and Kincaid wildfires and an update on loan forgiveness.
The commission withdrew Item 2 after adopting the alternate decision, according to the meeting summary and transcript of the Sept. 3 voting meeting. The meeting record identifies the proceeding as Application 24-08-004, which concerns PG&E’s request to deviate from its authorized capital rate structure.
The summary also says commissioners directed PG&E to provide the new reporting in its next cost-of-capital filing. The record available here does not include the final decision text itself, so the draft below relies on the meeting summary for the boundaries of the exemption and the reporting requirement.
The commission also unanimously approved Item 50, opening a rulemaking to revise the General Rate Case Plan, but that action is separate from the PG&E item.
