PG&E CEO Says AI Data Centers Are Boosting California’s Power Demand But Wildfire Liability Reform Remains A ‘Real Challenge’

• Poppe said higher borrowing costs have added $600 million to customer costs over the past two years.
• The utility recently reported a 12.7-gigawatt data-center pipeline.
• PG&E reduced its planned full-year 2027 investment by about $2 billion.

PG&E (PCG) CEO Patti Poppe said California’s AI and data-center boom is bringing fresh demand to the state’s power grid, but warned that unresolved wildfire liability rules could complicate the utility’s ability to fund the infrastructure needed to support that growth.

“We’ve got growth, and we haven’t had growth on the grid in decades,” Poppe told CNBC on Wednesday, adding that PG&E is preparing to power AI, manufacturing and other growing industries in California.

PCG shares were up 0.7% at the time of writing, but are on track to post their second straight monthly losses.

Data Center Demand Surges

PG&E has seen a sharp increase in electricity requests from data centers as technology companies expand AI infrastructure. The utility recently reported a 12.7-gigawatt data-center pipeline.

However, Poppe said the failure of California lawmakers to agree on changes to the state’s wildfire liability framework remains a major concern.

“We’ve got a real challenge right now with a wildfire liability reform that was supposed to happen,” she said. “It was two years of work through the legislature, and it didn’t happen.”

California lawmakers spent weeks negotiating Senate Bill 492 (SB 492) as part of a broader effort to reform how wildfire victims are compensated and how wildfire-related financial risks are managed. However, the final version of SB 492 was narrower and did not substantially reduce utilities’ liabilities.

PG&E subsequently reduced its planned 2027 investment by about $2 billion to $11.4 billion.

Credit Rating Challenges Lead To Higher Costs For Consumers

Poppe said the Los Angeles wildfires, which did not involve PG&E equipment, nevertheless heightened credit-rating agencies’ concerns about California utilities’ wildfire exposure, adding to the company’s borrowing costs.

“Our customers paid an incremental $600 million in the last two years of borrowing that we do, because we have to borrow billions of dollars every year to build the infrastructure,” she added.

Fitch reportedly maintained PG&E’s BBB- investment-grade rating but lowered its outlook to ‘Negative’ from ‘Stable,’ citing wildfire liability risks and the lack of legislative reform.

The concerns extend beyond PG&E. Edison International (EIX) CEO Pedro Pizarro recently warned that the failure to reform California’s wildfire framework could leave utility customers facing hundreds of millions of dollars in additional costs as companies pay more to access capital.

Retail Says PCG Worth A Punt At Current Levels

Retail sentiment surrounding PCG on Stocktwits remained ‘bearish’ over the past 24 hours.

One user said the stock is “worth the wager at these levels.” The stock fell to its lowest level in over four years in the previous session.

PCG shares are down 25% so far this year.

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