stockrowWhat it does
Pacific Gas & Electric Co. is the primary operating subsidiary of PG&E Corporation, a California holding company. It is a public utility that sells and delivers electricity and natural gas in Northern and Central California. In plain terms, it operates the networks and facilities that move power and gas to homes, businesses and other users, and it also has generation, transmission, distribution, gas-storage and related utility operations.
The company’s electric system includes transmission assets, distribution facilities and a power-generation portfolio. Its electric transmission system spans 18,000 circuit miles, and its generation portfolio has 7.8 gigawatts of capacity, including hydroelectric assets and the Diablo Canyon Nuclear Power Plant. Its gas operations include distribution, transmission and storage facilities.
The company is adapting its system for climate-driven hazards through measures including powerline protection settings, public-safety power shutoffs, vegetation management, asset inspections, system hardening and undergrounding. It also uses real-time monitoring in its gas system, pipeline replacements and strength testing.
The company is incorporated in California. Patricia K. Poppe has been PG&E Corporation’s Chief Executive Officer since January 2021.
How it makes money
The company operates under cost-of-service ratemaking. The California Public Utilities Commission, or CPUC, and the Federal Energy Regulatory Commission, or FERC, set the revenue requirements it may collect for regulated services. Those requirements are intended to let the company recover reasonable operating costs and capital costs and provide an opportunity to earn a return on invested capital.
Its regulated revenue requirement includes operating expenses, depreciation, taxes and a return on rate base. Rate base is the value of eligible utility investment in generation, distribution and general-plant assets. The company can also collect authorized pass-through amounts, including the costs of procuring electricity and natural gas and administering customer programs. Revenue therefore varies with regulatory decisions and the level of pass-through costs.
Electricity was the larger reported revenue category in FY2025, with electric revenue of $18.3 billion and a 73.5% revenue share. Natural Gas, US Regulated revenue was $6.6 billion and represented 26.5%. FY2025 electric revenue was $18.3 billion; Q3 2026 core earnings per share were $0.41.
Capital investment affects earnings when projects enter rate base, subject to regulatory treatment. The company’s 2027 capital guidance is $11.4 billion, and it expects cash from operations plus $4 to $5 billion of utility debt financing to fund those capital investments. It also plans to reduce non-fuel operations and maintenance expense by 2% to 4% annually.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Electric | $18.3 billion | 73.5% | 2.85% |
| Natural Gas, US Regulated | $6.6 billion | 26.5% | 0.14% |
Customers and how it sells
The company serves customers in Northern and Central California. It provides essential electric and gas service to over 16 million people in a service area that includes the heart of the world’s innovation economy. Its natural-gas business serves 4 million gas customers.
Its customers include residential users, businesses, low-income customers and large-load customers. The company has customer-assistance programs, including the CARE program, under which income-qualified customers can receive a monthly discount of 20% or more on their electric and natural-gas bill. The cost of specified discounted-rate programs is collected from other customers when authorized by the CPUC.
The company connects new electric customers, renewable-energy projects, electric-vehicle charging and other load to its grid. Since 2024, it has brought approximately 174 megawatts of data-center projects online. During Q3 2026, it connected 3,000 EV charging ports to the grid. The company has said it is focused on connecting large-load projects with appropriate pricing and meaningful financial commitments.
Its physical network operates through rights to use public property and franchise agreements with approximately 300 cities and counties, generally allowing it to install, operate and maintain electric and gas facilities in public streets and highways.
Suppliers and costs
The company’s cost base includes purchased power and fuel; natural-gas procurement, storage and transportation; labor; maintenance; administration; financing; depreciation; taxes; and capital construction. Its costs can also be affected by weather, wildfire-related charges, regulatory outcomes and interest expense on additional debt.
The company had approximately 29,000 regular utility employees at December 31, 2025, while its contractors and subcontractors included approximately 39,000 individuals from approximately 1,200 contractor companies. About 17,500 regular employees were covered by collective bargaining agreements with IBEW Local 1245, ESC International Federation of Professional and Technical Engineers 20, and SEIU Local 24/7. Those agreements were automatically extended for at least one year while successor agreements are negotiated.
The company must secure labor, equipment and materials for its capital program. Project timing and cost recovery can be affected by permitting, construction schedules, labor, equipment and material availability, financing, legal and regulatory approvals, community requests, weather and other conditions. It expects to finance 2027 capital investments with operating cash flow and utility debt financing.
- Revenue$24.9B
- Cost of revenue−$3.7B
- Selling, general and administrative−$11.3B
- Other operating costs−$5.1B
- Operating income$4.7B
Competitive position
No competing companies are identified in the available company material. The company’s electric and gas operations are regulated utility operations rather than businesses described as competing for retail customers. The CPUC has jurisdiction over rates and terms of service for its electric distribution, gas distribution, electric generation, gas transmission and storage services. FERC regulates aspects of transmission, hydroelectric generation and interstate gas activity.
The company operates in a service area supported by franchise agreements with approximately 300 cities and counties. CAISO operates the transmission system in most of California, including the company’s service area, provides open-access transmission service and operates the wholesale power market. California policy also supports distributed generation, self-generation, energy storage, renewable resources and electric-vehicle infrastructure.
Our reading: The regulated service territory, long-lived network assets and rights to use public streets are a strong barrier to duplicating local electric and gas delivery infrastructure. [item1]
Our reading: Cost-of-service regulation supports recovery of authorized costs and returns on approved investment, but the strength of this protection depends on the outcomes and timing of CPUC and FERC proceedings. [item1; item7]
Our reading: The company’s existing generation, transmission and gas assets support its role in serving load, while open-access transmission and California’s distributed-energy policies limit exclusivity beyond its regulated network. [item1; call_prepared]
Growth opportunities
The company’s investment program is directed at safety, reliability, electrification, transmission, renewable-power integration, energy storage, transportation electrification, information technology and automation. It expects data centers, electric-vehicle adoption and building electrification to drive electric-load growth. The company has identified additional investment opportunities in transmission for data centers and system investments, transportation-electrification capacity, hydroelectric facilities, energy storage, information technology and automation.
The company forecasts total capital expenditures, including accruals, of $12.4 billion for 2026, $13.4 billion for 2027, $15.4 billion for 2028, $16.3 billion for 2029 and $16.0 billion for 2030. It had implemented contracts for more than 4.9 GW of battery energy-storage capacity and reported more than 820,000 electric vehicles and more than 950,000 interconnected private-solar customers in its service area.
The company has filed a 10-year Electric Undergrounding Plan proposing 5,000 additional miles of undergrounding between 2028 and 2037. It says the plan contemplates $16.6 billion of investment. It also has a multi-year data-center pipeline and has brought approximately 174 megawatts of data-center projects online since 2024. Its previously signaled 1.8 gigawatts of projects expected online by 2030 remain in its plan, while its 2027 capital plan was reduced by $2 billion.
- $20.6BFY2021
- $21.7BFY2022
- $24.4BFY2023
- $24.4BFY2024
- $24.9BFY2025
Structural risks
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Wildfire liabilities and recovery risk: Wildfire mitigation measures reduce but do not eliminate ignition risk. Future liabilities could exceed insurance, self-insurance, the Wildfire Fund, the Continuation Account or regulatory recoveries.
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Regulatory risk: CPUC and FERC proceedings may not authorize sufficient revenue, may disallow costs or may take longer than expected. Political and legislative action on wildfire, affordability and utility policy can affect capital plans and financial results.
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Operating-safety risk: Electric and gas operations involve risks including equipment failure, fires, explosions, gas incidents, blackouts, dam failures, third-party damage to infrastructure and failures in emergency response.
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Climate and weather risk: Severe weather, drought and climate change can affect facilities, wildfire exposure, operating conditions and customer service.
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Financing and cost risk: Capital spending, debt maturities and dividends are expected to exceed operating cash flow, requiring access to debt, equity and credit markets. Higher interest rates and substantial variable-rate debt can raise financing costs.
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Undergrounding and project-execution risk: The company’s undergrounding plan requires OEIS and CPUC review and approval. Permitting, labor, equipment, materials, financing, legal and regulatory developments, weather and community requests can delay projects or affect cost recovery.
Bottom line
Our reading
Our reading: Pacific Gas & Electric is a capital-intensive, regulated electric and gas network business whose revenue model is based on authorized cost recovery and returns on approved investment. [item1]
Our reading: Its investment program is tied to wildfire mitigation, system reliability, electrification and rising large-load demand, but its ability to fund and recover that investment depends on regulatory outcomes and access to capital. [item1; item7; call_prepared]
Our reading: Wildfire exposure and the associated liability and policy framework remain central to the company’s operating and financing model despite its mitigation work. [item7; call_prepared]