PG&E (PCG) 2026년 3분기 실적 발표 콜: 가이던스 재확인, 전략적 검토 진전

핵심 요약

• PG&E는 2026년 3분기 코어 EPS $0.41를 기록했다. 올해 첫 9개월간 코어 EPS는 전년 동기의 $1.14에서 $1.24로 증가했다.
• 경영진은 2026년 코어 EPS 가이던스로 $1.64~$1.66, 2027년 가이던스로 $1.78~$1.82를 재확인했다. 각 가이던스 중간값은 각각 10%와 9%의 성장을 나타낸다.
• 회사 측은 높은 조달 비용으로 인해 2027년 자본 지출 계획을 $20억 감축한 $114억으로 조정하면서도, 2027년 요금 기반(rate base) 가이던스는 기존대로 유지했다.
• PG&E는 자본 재배치 및 기업 링펜싱(자산 분리·보호)부터 자산 매각 또는 분할에 이르는 다양한 방안을 검토 중이다. 경영진은 늦어도 2027년 여름까지는 향후 추진 계획을 발표할 수 있을 것으로 예상하고 있다.
• 산불 배상 책임 정책은 투자적격 신용등급 획득의 주요 장애물로 남아 있다. PG&E는 2017년 이후 투자적격 미달 금리로 발행된 채권으로 인해 만기까지 고객이 부담해야 할 추가 이자 비용이 $40억에 달할 것이라고 밝혔다.
• 운영 지표는 지속적인 개선세를 보였다. 기상 조건 보정 발화율은 2017년 이후 74% 감소했으며, 2024년 이후 약 174MW 규모의 데이터센터 프로젝트가 전력망에 연계되었다.

핵심 재무 데이터

사업 및 운영 성과

PG&E는 고객 대상 자본 투자가 실적 성장의 주요 동력으로 유지되었다고 밝혔다. 또한 회사는 운영 개선과 낭비 요소 제거를 통해 연료비를 제외한 연간 O&M 비용을 2%~4% 절감하는 목표를 지속 추진하고 있다.

이 유틸리티 기업은 현재 700개 이상의 AI 기반 카메라와 1,600개의 기상 관측소를 활용해 실시간 시스템 모니터링을 실시하고 있다. 경영진은 자사 설비로 인한 대형 산불이 발생하지 않은 지 4년째 접어들었으며, 기상 조건 보정 발화율은 2017년 대비 74% 감소했다고 설명했다.

가스 사업 부문에서는 항공 및 드론 점검을 통해 누출 감지 효율을 제고했다. PG&E는 캘리포니아 공공유틸리티위원회(CPUC)가 승인한 2015년 기준선 대비 연간 메탄 배출량을 62% 감축하여 2030년 목표를 상회 달성할 것으로 전망하고 있다. 비상 대응 인력의 현장 평균 도착 시간은 20분이었다.

PG&E의 송전망은 총 연장 18,000 회선 마일에 달하며, 연방에너지규제위원회(FERC) 기준 요금 기반은 $130억 규모다. 발전 포트폴리오는 수력 발전 자산과 디아블로 캐니언 원자력 발전소를 포함해 총 7.8GW 규모다.

회사는 2024년 이후 약 174MW 규모의 데이터센터 프로젝트를 연계했다. 경영진은 2027년 자본 지출 감축에도 불구하고, 2030년까지 상업 운전을 시작할 예정이었던 기존 1.8GW 규모 프로젝트 계획에는 변동이 없다고 밝혔다.

PG&E는 또한 2028년부터 2037년 사이에 5,000마일의 배전선을 추가로 지중화하기 위해 $166억을 투자하는 방안을 제안했다. 회사는 이 계획을 통해 약 $1,170억의 장기적 고객 편익이 창출되고 미래 수목 관리 및 O&M 비용 $60억을 절감할 수 있을 것으로 추정하고 있다. 당국의 승인 절차는 2028년 2분기까지 소요될 전망이다.

경영진 가이던스

경영진은 2026년 코어 EPS 가이던스 $1.64~$1.66, 2027년 가이던스 $1.78~$1.82를 재확인했다. PG&E는 전략적 검토를 진행하는 동안 2027년 이후의 가이던스는 제공하지 않는다.

회사 측은 자금 조달 계획과 잠재적 전략적 대안이 2030년까지 신주 발행을 피하도록 설계되어 있다고 밝혔다. 경영진은 또한 현재 밸류에이션에서의 유상증자는 고려 대상이 아니라고 언급했다.

2027년 배당금 인상과 관련해 경영진은 2028년까지 배당성향 20%를 달성하겠다는 기존 경로를 유지할 것으로 예상하고 있다. 이사회는 2026년 12월에 연간 배당금을 결정할 예정이나, 광범위한 배당 정책은 여전히 전략적 검토 대상에 포함되어 있다.

PG&E는 투자적격 신용등급 획득을 위한 방안을 검토하면서 부채 대비 영업활동 현금흐름(FFO) 비율 목표를 10%대 중반으로 계속 유지하고 있다.

리스크 및 주요 점검 사항

캘리포니아주는 아직 포괄적인 산불 배상 책임 개혁안을 입법화하지 않았다. 경영진은 정책 개혁이 투자적격 등급 회복과 고객 조달 비용 절감을 위한 가장 빠르고 효과적인 길이라고 설명하면서도, 규제 및 기업 차원의 대안 역시 함께 검토하고 있다.

피치는 해당 분기 중 PG&E의 신용등급 전망을 '부정적'으로 하향 조정했으며, S&P는 캘리포니아 민간 유틸리티 기업들의 리스크가 높아졌음을 지적했다. 경영진은 재무 지표보다 정책적 리스크가 신용등급 개선의 주요 제약 요인으로 작용하고 있다고 설명했다.

2027년 자본 지출의 $20억 감축으로 인해 청정에너지 연계, 시스템 확장, 주택 관련 프로젝트 및 기타 고객 대상 업그레이드가 지연될 수 있다. PG&E는 산불 완화, 안전 인증, 핵심 시스템 운영 등은 예산이 완전히 반영된 최우선 과제로 유지된다고 밝혔다.

회사는 또한 CPUC가 제안한 편익-비용 산정 방법론으로 인해 고위험 지역 프로젝트를 포함해 승인되는 지중화 구간 마일 수가 대폭 줄어들 수 있다는 점을 우려하고 있다.

애널리스트 Q&A 주요 내용

• 전략적 검토: PG&E는 자본 재배치, 링펜싱, 매각, 기업분할 및 자산 분리 등을 검토 중이다. 경영진은 규제 당국에 제출되는 모든 거래가 조달 비용 절감을 포함해 측정 가능한 고객 편익을 제공해야 한다고 밝혔다.
• 검토 일정: 회사는 2027년 여름까지 확정된 추진 방향을 발표할 것으로 예상하지만, 규제 당국 신청이나 기타 경과를 더 일찍 발표할 수도 있다. 경영진은 전략적 검토가 공개 발표되기 약 1년 전부터 잠재적 대안에 대한 내부 작업이 시작되었다고 밝혔다.
• 산불 개혁: 경영진은 입법자들의 조치 시행에 대한 기대를 유지하고 있지만 병행 가능한 대안도 함께 추진하고 있다. 주지사가 요청한 CPUC 보고서는 11월 1일에 제출될 예정이었으며 현행 체계의 비용에 대한 추가 근거를 제공할 수 있다.
• 자본 배분: 안전, 규제 준수 및 고객 요금을 인하할 수 있는 프로젝트가 최우선 순위로 유지된다. 경영진은 지중화 작업이 특히 최고 위험 구간에 있어 중요한 리스크 절감 투자로 남아 있다고 밝혔다.
• 데이터센터: 2027년 자본 감축이 2030년까지 1.8GW 규모의 데이터센터 프로젝트를 상업 운전하겠다는 PG&E의 기존 발표 계획을 바꾸지는 않는다. 회사는 대용량 전력 사용 고객에 대한 재무적 이행 약속과 적정 요금 책정을 강조했다.
• 주식 자금 조달: PG&E는 이전에 조달된 자본 프로그램이 기존 $730억 자본 계획을 지원했으며, 현재 검토 중인 전략적 대안은 2030년까지 신규 주식 발행을 필요로 하지 않을 것이라고 밝혔다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. I'd like to welcome everyone to the PG&E Third Quarter 2026 Earnings Release. [Operator Instructions]

At this time, I would like to turn the conference over to Jonathan Arnold, Vice President of Investor Relations. Jonathan, please go ahead.

Jonathan Arnold

Good morning, everyone, and thank you for joining us for PG&E's Third Quarter 2026 Earnings Call. With us today are Patti Poppe, Chief Executive Officer; and Carolyn Burke, Executive Vice President and Chief Financial Officer. We also have other members of the leadership team here with us in our Oakland headquarters.

First, I should remind you that today's discussion will include forward-looking statements about our outlook for future financial results and other matters. These statements based on management's current expectations, assumptions and estimates. Some of the important factors which could cause our actual results to differ materially are described on the second page of today's earnings presentation.

Today's discussion will also contain non-GAAP financial measures. The slides provide important information regarding these measures, including reconciliations between non-GAAP and GAAP. They can be found online at investor.pgecorp.com along with other relevant information. We also encourage you to review our quarterly report on Form 10-Q for the quarter ended September 30, 2026.

With that, it's my pleasure to hand the call over to our CEO, Patti Poppe.

Patricia Poppe

Thank you, Jonathan. Good morning, everyone. Our core earnings per share were $0.41 for the third quarter and $1.24 for the first 9 months. Today, we're reaffirming our 2026 EPS guidance of $1.64 to $1.66, up 10% from 2025 at the midpoint. We're also reaffirming our 2027 core EPS guidance of $1.78 to $1.82, up 9% at the midpoint. While we're no longer providing guidance beyond 2027 during our strategic review, we already addressed our anticipated equity financing needs through 2030. On the common dividend, we typically set our annual rate for the upcoming year in December. And for 2027, you should expect our recommended increase to be consistent with our prior stated trajectory.

Turning to Slide 4. We know there are 2 topics that are top of mind today, wildfire policy reform and our previously announced strategic review. First, on wildfire policy, comprehensive reform has not yet been enacted, an action is needed to address the tail risk that exists under the current framework. At the same time, it's important to recognize that California's utility wildfire framework has evolved significantly from SB 901 in 2018 through AB 1054 in 2019 and most recently with SB 254 last year. Along that journey, our state policymakers have established important and substantive features, including self-insurance up to $1 billion. Liquidity from the Wildfire Fund and Continuation Account, a revised prudency standard, a presumption of prudency for utilities meeting rigorous safety certification.

Limits on Wildfire Fund reimbursements is found in prudent and precedent for securitization of claims exceeding on capacity. Collectively, these protections have strengthened California's ability to compensate wildfire survivors while supporting safe, reliable and affordable service. Yet, key voices have plainly acknowledged that there is more work to do, including Governor Newsom, the CPUC, the Wildfire Fund administrator and the credit rating agencies. We remain committed to working constructively with policymakers and stakeholders to build on the progress California has made to date. We look forward to the Governor's requested CPUC report due November 1, and which should further quantify the unsustainable impacts of the current framework on California and utility customers.

While legislative action has not materialized yet this year, we're moving forward to unlock value for customers and investors. As you know, since 2020, we've been reinvesting nearly all of our earnings into the system to benefit customers. However, sustaining this level of investment requires a wildfire liability framework that supports affordable access to capital, reflecting current high financing costs, we previously announced a $2 billion reduction to our 2027 capital plan, and we recently began notifying customers whose projects may be delayed. These changes will affect the connection of new clean energy resources, system expansion to meet growing demand and new or upgraded customer projects, including those supporting much-needed housing in California.

We do not take those impacts on our customers lightly. But our current financing cost is too expensive for them. With our strategic review, we've also taken the initiative to start exploring solutions which could add protections and unlock value for customers and investors. As we announced on September 2, we are assessing the full range of options for how PG&E is organized and financed. A key foundational objective is to achieve investment-grade credit ratings which we view as critical to maximizing the value we can deliver for our customers. While policy reform through legislation remains the fastest and most effective solution, we're also evaluating other options, including possible regulatory reforms, further reassessing our capital allocation priorities and revisiting our corporate structure.

On structure, options range from corporate ring fencing to sales and separations. Today, a discount for wildfire risk burdens all of our assets, including businesses with little or no exposure to that risk. Our review is evaluating whether alternative structures could better reflect the value and risk profile of those businesses in order to lower financing costs for customers. We expect to share the outcome of our review and our planned path forward with you no later than next summer.

In the meantime, we plan to keep you updated on our progress through future earnings calls or sooner if there are material developments to share. The important point is this, PG&E has more than one way to move forward and create value. We have several attractive businesses with unique and hard-to-replicate assets providing essential electric and gas service to over 16 million people in the service area that includes the heart of the world's innovation economy.

Turning to Slide 5. The story here is simple. Our investments are producing measurable results. Today, our hazard awareness and warning center has real-time visibility across our system through more than 700 AI-enabled cameras and 1,600 weather stations. The results are clear. We're now in our fourth year without a major wildfire associated with our equipment and our weather-normalized ignition rate has declined 74% since 2017 to its lowest level since we began tracking the metric. We're also seeing tremendous progress in our gas business, where aerial and drone inspections have significantly improved leak detection efficiency and safety performance.

Additionally, we remain first quartile in both dig in performance and emergency response with first responder arriving on site at an average of 20 minutes. We're also on track to achieve a 62% reduction in annual methane emissions compared to the 2015 CPUC-approved baseline, continuing to outperform our 2030 target. We've made similar improvements across our large and growing transmission and power generation businesses. Our electric transmission system spans 18,000 circuit miles with $13 billion of FERC rate base along with significant opportunities to increase investment in the future, while our power generation portfolio includes 7.8 gigawatts of capacity including our hydro system and top-performing Diablo Canyon nuclear power plant.

Turning to Slide 6. We're continuing to build a high-quality data center pipeline and providing visibility into how projects advance from application to energization. This quarter, we're showing a new category for megawatts that are now successfully connected to our system and receiving service. Since 2024, we brought approximately 174 megawatts of data center projects online. As we look to bring more of our pipeline into service, our focus will continue to be on doing so in a way that will improve affordability for existing customers. We're focused on connecting the right projects, pricing them right and ensuring large load customers make meaningful financial commitments as they advance through the process.

Turning to Slide 7. There's a common thread across the themes I've discussed this morning. Whether it's continuing our transformation and strengthening our layers of protection, advocating for durable wildfire policy reform, advancing rate reducing load growth or progressing our strategic review. We're guided by a simple principle. What's good for our customers is ultimately good for our investors and good for California. We'll continue to stay grounded in our customer-first approach and pursue opportunities to deliver a safer, more reliable and more affordable system so that our customers and shareholders can prosper. We're proud of the progress we've made, and we're ready to tackle the work ahead.

With that, I'll hand it over to Carolyn to cover our financials in more detail.

Carolyn Burke

Thank you, Patti, and good morning, everyone. Turning to Slide 8. We're showing you our earnings walk for the first 9 months of 2026. Our core EPS year-to-date has reached $1.24, up from $1.14 in the same period last year, keeping us on track to deliver on our full year core EPS guidance. In prior quarters, customer capital investment continues to be the primary driver of our earnings growth. contributing $0.12 over the first 9 months.

We also continue to make steady progress on our O&M savings goal with $0.04 year-to-date. This puts us on pace to deliver our savings guidance once again, while redeploying $0.02. Timing and other items reduced earnings by $0.04 year-to-date. This mainly reflects the benefit we realized in the third quarter of last year, from implementing a tax method change. While we benefited from the method change in the third quarter of both years, last year's third quarter also included a catch-up for the first and second quarters.

Turning to Slide 9. Our updated 2027 capital guidance of $11.4 billion reflects the $2 billion reduction we announced on September 2. You might have noticed that our 2027 rate base guidance remains unchanged. Many of the projects impacted by capital deferral has longer development and construction time lines and were not expected to enter service until after 2027, limiting the impact on next year's rate base.

We also continue to see strong operational execution across the company, including efficiently converting construction work in progress into rate base. We expect to finance our 2027 capital investments with cash from operations and $4 billion to $5 billion of utility debt financing, which includes around $1 billion of maturities. Importantly, with our updated capital plan, we remain fully committed to executing our Wildfire Mitigation Plan, maintaining our annual safety certificate and continuing the critical work required to operate our systems safely every day.

On Slide 10, we've made significant progress over the past several years improving our credit profile. The rating agencies have recognized for some time that our financial metrics are consistent with investment-grade performance. At the same time, they've also been clear that policy risk remains the primary constraint on further ratings improvement. That dynamic was reinforced during the quarter when Fitch revised its outlook on PG&E to negative and S&P highlighted the heightened risk faced by California investor-owned utilities. Together, these assessments reinforce the importance of a durable wildfire liability framework, which would support investment-grade ratings and more affordable access to capital for the benefit of our customers.

On Slide 11, we continue to execute our plan to reduce nonfuel O&M by 2% to 4% annually. Our results reflect the ongoing transformation underway at PG&E as we continue executing our performance playbook and eliminating waste. Turning to Slide 12. We're highlighting several important regulatory and legislative milestones. In our 2027 general rate case, we received a favorable proposed decision that would authorize interim rate recovery of $456 million to be collected over 12 months starting in January. If approved, this would promote more stable customer bills better align cash flow with costs and reduce financing expense. The commission may take up the PD as soon as next Thursday's voting meeting.

At the end of September, we filed our 10-year Electric Undergrounding Plan, or EUP, proposing 5,000 additional miles of undergrounding between 2028 and 2037. And building on the approximately 1,900 miles we expect to have completed by the end of next year. The plan contemplates an investment of $16.6 billion. That investment is expected to deliver approximately $117 billion of long-term customer benefits while also avoiding $6 billion of future vegetation management, operations and maintenance costs. Our safety regulator, OEIS, has 9 months to review the filing. And if approved, we would then submit the plan and an application to the CPUC for approval of the cost, which is also a 9-month review.

As a result, we expect to complete the approval process in the second quarter of 2028. Separately, last week, the CPUC issued a proposed decision on the benefit/cost ratio methodology for utility EUP. We're evaluating the PD and expect to submit comments by November 5, ahead of a potential commission vote as early as November 19. We are concerned that the proposed methodology will prevent undergrounding from reaching thousands of customers in high-risk communities. Even where it offers the most effective means of reducing wildfire risk and improving reliability at the lowest cost. Next month, we anticipate a proposed decision in our Kincade and Dixie cost recovery proceeding. As a reminder, this is the first wildfire recovery case for a utility operating under the AB 1054 safety certificate and benefiting from the associated presumption of prudency.

Finally, turning to Slide 13. The consistent execution, operational improvement and financial discipline we've highlighted this morning demonstrate PG&E's differentiated story. Our continued transformation benefits customers and investors today while strengthening the foundation for the future.

With that, I'll turn it to Patti.

Patricia Poppe

Thank you, Carolyn. The facts don't lie. The foundational operations of PG&E are strong and improving every day. Our performance playbook is doing what we designed it to do, deliver for our customers. In the absence of wildfire liability reform, we'll keep advancing our strategic review with the ambition of becoming a sustainable investment-grade business that unlocks the full value of our company for our customers, our state and our owners.

With that, operator, please open the lines for questions.

Operator

[Operator Instructions] And your first question comes from Steve Fleishman with Wolfe Research.

질의응답

Steven Fleishman

So I guess just curious what signals, if any, you're getting on desire, interest of the legislature to address the wildfire liability this year? I know there's assembly hearings and maybe some more. Maybe you could talk about what you've heard on those so far. Just any sense that the Senate may want to look to do any hearings?

Patricia Poppe

Yes. Well, thanks, Steve. Obviously, top of mind for everyone. And look, we continue to see progress. The hearing this week, I think, was effective at continuing to make the case that the status quo is unacceptable. And as long as nothing happens, no legislation is passed, our customers continue to pay. And it's a status quo that needs to be resolved. The job is not done yet. So we found the hearings that are scheduled next week, another one just got scheduled. So there's 2 next week that I think are addressing the right questions and the right issues. And we're encouraged by that.

In the meantime, obviously, we continue to lean forward and move forward on other alternatives to unlock the value. Obviously, policy reform would be our #1 desired next step. But we have a lot of value that is -- I would suggest trapped in the company right now. And so we're working hard to create parallel paths and move forward. But we're hopeful that the legislature does continue to act -- the Senate, we're looking to see if they would schedule any hearings that hasn't happened yet. But obviously, these hearings are very public, and the information is clear and many people and many key leaders in the state continue to speak that action is absolutely required.

Steven Fleishman

And then I guess just related, just I think we're still -- are we still supposed to get the CPUC report on this topic, November 1. And just any sense of what may come out of that?

Patricia Poppe

Yes. I think it will be another good case in why the status quo is unacceptable. I don't know how many different ways that people are going to be able to publish and say, but I expect the CPUC report to be substantive. They've asked really meaningful questions in their discovery. So we were providing very important information to them. It will be good for them to be able to share that November 1 with the -- at the request of the governor. We expect that, that is just another signal that the status quo is just unacceptable.

Operator

Your next question comes from the line of Shar Pourreza with Wells Fargo.

Marcella Petiprin

Marcella on for Shar. Thinking about the strategic review and without asking you to prejudge any specific outcome, can you just frame kind of the criteria that you're using to evaluate potential pathways? Specifically around weighing options ability to unlock value with their potential regulatory risk or reliance on processes outside of your control?

Patricia Poppe

Yes. Great question, Marcella. Look, first and foremost, we unlock value. We want to target investment-grade business or businesses to unlock that value for customers and owners. Obviously, feasibility and ability to execute a transaction is a priority. A lot of people ask us about PacGen and what was different about PacGen when the regulator didn't approve minority interest. That was a totally different time and a different set of facts.

During that time, we were looking to raise cash and we're unable to share benefits with customers. We think in this scenario, we've got a much more compelling case to make with our regulator that, for example, our gas business. Our 4 million gas customers are paying sub investment-grade borrowing costs because it's part of the holdco related to wildfire risk, and that seems like an issue that should be resolved one way or another, whether it's resolved through policy reform, which would be great. And if not there, then would we unlock that value and lower borrowing costs for our gas customers through a regulatory approved spin or sale or separation of some kind.

Marcella Petiprin

Got it. Appreciate that. And then you spoke a little bit about conversations around the current legislator and state leaders. But any sense of conversations with [indiscernible] candidates or lawmakers who are running to be part of the next legislative body and how they're thinking about wildfire liability as potentially a day 1 priority?

Patricia Poppe

Yes. It's -- the governor's race is not over yet. We do know that Xavier Becerra, who's the leading in the polls by a pretty wide margin today has stated publicly support for action. I think he's hopeful like we are that it doesn't -- we don't kick the can down the road into next year. That is certainly a possibility. But -- so he's spoken publicly that he's supportive of reform. We're hopeful that, that reform doesn't wait for that.

Operator

Your next question comes from the line of Nicholas Campanella with Barclays.

Nicholas Campanella

I guess in the last legislative session, there was obviously heavy input from the insurance industry right at the end. And I'm just curious if you could kind of elaborate on how conversations with that stakeholder has trended since then? Is there a possibility to kind of come to some type of agreement with them just to help increase the odds of any kind of special session?

Patricia Poppe

Yes, you bet. So look, the reality is nothing was passed. No law was passed at the end of the session, and I'm stating the obvious, but in the nuance of what does that mean to insurance then that means insurance still needs to join in, in discussions about what is going to occur to make sure that claims are limited and our customers are not the infinite backstop for insured properties. And so I would suggest that conversations have been productive. They've continued next week's hearing on the 29th is intended to discuss subrogation, my understanding is. And so given that, I think we'll hear continued discussions with insurance as well as all of the stakeholders.

There's a wide coalition of interested parties, our builders, our real estate agents, our plaintiffs' attorneys, our environmental groups. There are large groups of stakeholders who are interested obviously, in making sure that this is an affordable framework and that is sustainable framework. And so those -- I would suggest those discussions continue and are constructive, and we'll hear more publicly next week through the hearing process.

Nicholas Campanella

And then I guess just you're telling folks that no later than summer, I guess you'd have an answer on the strategic review. Is this really that you guys are going to take time to do the work and finalize the plan by then? Or could you be actively kind of pursuing things today that could result in things happening to the corporate structure or maybe regulatory filings being made ahead of that summer date?

Patricia Poppe

Yes. We'll definitely be updating to our normal quarterly process. And what we've said is we'll have more definitive determination by next summer. But as things occur, we'll obviously be communicating. And if there's something to be discussed between quarterly calls, we'll certainly do that. We are moving with a sense of urgency. We see real opportunity here. These assets are extraordinarily valuable, and they're operated by the best in the world. I would argue we have incredible people who operate the assets. They become very valuable. And I think our ability to unlock that value could take a lot of different forms.

And as we've said, policy reform is our first preference. And so hopefully, we could have some update on that sooner than next summer. But otherwise, these other alternatives as they materialize and as concepts and opportunities and potential filings become possible. We'll do -- we're not going to stick to the time line of -- we have to wait until next summer. We're going to work aggressively between now and next summer. We just wanted to be clear that there was a finish line in mind.

Operator

Your next question comes from the line of [ Ross Fowler ] with Bank of America.

Unknown Analyst

So a couple of questions. Obviously, it seems like investment grade is sort of the foundational objective of the strategic review. So a couple of things on that. what's kind of the realistic time to get there? Can you do it on your own? Does it depend on legislative and regulatory outcomes? And is 14% kind of what we should mark to for an FFO to debt level?

Patricia Poppe

So I would say a couple of things. We do think it's realistic. It's very realistic that this business be investment grade. The question is what's the best framework and organization of these -- our lines of business that we have today to maximize the value for our customers as well as our owners. And so some things we can do on our own, like capital allocation strategy, that would be a strategy to unlock value. We've -- as you know, we've held back on an aggressive dividend because we've been reinvesting in the business for the benefit of customers and for stabilizing the financials of the company and making our investment-grade credit rating.

We would look at capital allocation as a strategy. That's more -- that's probably the most independent. We would look at ring-fencing, we would look at, as we've said, other corporate structures that would enable would enable unlocking that growth. In those cases, the regulator obviously has an important decision-making role to play in that. But we would only bring it to the regulator if it was truly in the best interest of customers and actually created real value for them that we can pass along to customers. And I think given our valuation today and the valuation of these assets, and their actual physical value, there's some real arbitrage in that distance between the current valuation and what we think the true value of these assets are to provide benefits for customers.

And so we would think that we would have a compelling case for our regulator. So all that to say, I'll just reiterate that the fastest way to unlock the value is policy reform, which, of course, we are not giving up on. Yes. I'll just add that as we look at all of the alternatives through a lens of investment grade. We want to continue to target that mid-teens FFO to debt. So that's how we model things. That's how we look at things. And so that's the goal.

Unknown Analyst

Yes, that makes sense. Cool. And then one more for me. I'm just trying to square these 2 things. I mean, clearly, I understand why there's no sort of guidance beyond '27 at this point as you go through the strategic review and you look over everything as you get to next summer. You look at all the alternatives in front of you, depending where policy goes and all the other things we're dealing with right now. But you have made -- declared a financing statement through 2030. So what gives you the level of certainty that there is no equity need in this business through 2030 when there's all the uncertainty related to CapEx rate base growth, earnings growth guidance, et cetera past '27?

Carolyn Burke

So we funded our equity under our plan -- our original plan of a $73 billion capital program. And so we know that our equity program supports that. And so any alternative -- and we love that plan, by the way. We absolutely love that plan and want to execute for our customers under that $73 billion plan. Any other alternative would need to -- would support that -- any other alternative that we're looking at is equal or is equal -- would be equal to trying to support the $73 billion plan as well. And so that's where we feel comfortable that under any other option that we're considering that we would not need new equity through 2030.

Patricia Poppe

Yes. And I'll just reiterate, we would not issue equity at these current stock price, our valuation, that's not an option for us.

Unknown Analyst

That's certainly cost of capital I would say.

Carolyn Burke

Yes. I'll just say, as we continue to look forward on our financing plans, the principles that we've talked about before still hold under this strategic review. We plan conservatively. We plan with customers at heart. We're always mindful of market conditions and particularly our current value discount, and our primary focus continues to be IG supportive metrics.

Unknown Analyst

All right. That makes sense, Carolyn. And then you do talk about this amortization or the faster amortization of the Wildfire Fund. You're calling that out this quarter. That -- I mean, I don't think that accelerated amortization would -- it seems like an accounting consequence, I should say, rather than an economic and credit consequence because I think it's pretty well known that, that might -- that Wildfire Fund asset might change given other things going on in California, but kind of I'm just trying to check in and make sure that really has no bearing on your financing plan objectives, strategic review analysis.

Carolyn Burke

That's right. It has no bearing. You're right. It's an accounting charge. We're just waiting for the right trigger.

Operator

Your next question comes from the line of Carly Davenport with Goldman Sachs.

Carly Davenport

Appreciate the time. Maybe just one on the data center pipeline. Any guidance on how we should just think about the pace and the opportunity to connect data center load the reduction to the capital plan? Any guidance that you can share sort of on where the data centers may fall in the queue of projects that could be impacted by potential CapEx reductions?

Patricia Poppe

Yes. So first of all, keeping in mind that our pipeline is a multiyear pipeline and our capital reduction is today, specifically for 2027. We have -- we see that our 1.8 gigawatts of projects that we have previously signaled would online by 2030 remain in that plan. When we talk about our capital reset, we reduced $2 billion of capital, but we're still spending $11.4 billion of capital next year. So there's still obviously capital to deploy to our critical safety issues, our critical compliance issues and projects that are well on their way to reducing rates for customers, those are obviously very important to us.

As we think further on down the line during the strategic review, obviously, as we've said, capital allocation will be an area of focus, and we'll look at how we can continue to help power California's prosperity and our growth. But certainly, under this liability framework, we're limited in that way. That's why when Carolyn says, we love our $73 billion plan, it can help fuel that growth and prosperity for customers and lower bills. And bring jobs and new tax revenue to the state.

I would just advocate strongly that a healthy PG&E, a wildfire reform, wildfire liability policy that enables us to grow enables California to grow and prosper. And so we're fans of our -- what we've referred to as our Goldilocks data center pipeline and our ability to serve the tech industry of California as an honor and a privilege, but we need a liability reform that enables that to happen sustainably and for the long haul.

Carly Davenport

Great. Very clear. And then just a housekeeping item. On the dividend, is the shift in presentation there in the slides, just a function of the strategic review? Or is there anything more explicit that you're messaging there with the consistent growth versus the prior 20% payout guidance?

Carolyn Burke

No, I don't think it's any new signaling there. As we've said before, with our strategic review, everything is on the table, including the dividend policy. But we've also been very consistent that for 2027 in particular, where we get a lot of questions is that you should expect 2027 to be in line with our prior trajectory, which is in line with the 20% by 2028, we've noted that it would be ratable ultimately, our Board will set the dividend in December of this year, but that's what we were signaling, but everything is on the table under the strategic review.

Operator

Your next question comes from the line of Anthony Crowdell with Mizuho.

Anthony Crowdell

Quick question, quick follow-up. I guess one on the strategic review. Is there a point -- you're very clear you hope to have it no later than next summer. Is there a point where that review becomes more urgent, whether it's credit rating action or another wildfire season? I guess, how flexible is that date on external factors? And then I have a follow-up.

Patricia Poppe

Yes, it's a great question, Anthony. Obviously, as we go through the reform, we're we'll be watching current conditions and whatever conditions within which we're operating will have an influence on our trajectory. But what we're really looking for is a long-term sustainable business organization and financing model that deliver value. And we know that it can, and we know that this model works.

We know that the investor-owned utility model works for customers as well as shareholders and investors and owners and financing entities. And so we'll just -- we'll obviously respond to current conditions, but more importantly, have an eye on the horizon for what is our long-term value proposition and actually unlock that value.

Anthony Crowdell

Great. And a follow-up, maybe more focus for the legislature. But I'm just wondering, it seems like the cycle of decisions or when I think about the success of AB 1054 and SB 254 or both after catastrophic events and the legislature acted this year. Again, all of the physical enhancements that companies have made across the state, we really didn't -- unfortunately didn't have an event this year, but also weren't as successful in legislature. I mean, what decouples that of in order to get supportive legislative action, we don't want to have to have a catastrophic event.

Patricia Poppe

Well, I will remind us, we did have a catastrophic event. Obviously significant one back in 2025, which is when this legislative package started. So this has been a 2-year package in response to the issues in 2025. And I would just suggest that the PG&E remaining subinvestment grade is a major issue that must be solved. And when Fitch put us on negative outlook, I think that really reiterated that inaction will continue to get increasingly expensive for our customers.

In fact, for all of the debt that we've issued as our -- in sub-investment-grade since 2017 will cost our customers an incremental $4 billion in interest expense over the life of that financing. That is a cost that can be immediately remediated with good long-term policy. So I'd like to think, Anthony, that we've got a real sense of urgency because customers are paying today. And our customers are waiting on our legislature to take the necessary actions to put us back in a position to be investment grade given we meet all of the criteria for investment grade, but for California liability policy.

Operator

Your next question comes from the line of David Arcaro with Morgan Stanley.

David Arcaro

Sorry if this is a little duplicative, but I was just wondering if there is no special session if there weren't legislation passed this year? Would you consider that to be a potential catalyst for accelerating and taking additional actions within the strategic review?

Patricia Poppe

Well, it definitely is a driver for the fact that the strategic review has been initiated. And so we will continue to do the work of that strategic review. I will reiterate that we didn't just start thinking about the strategic review. We started our internal process a year ago thinking about what would be our response or what would be our actions that we could take in the event of inaction. And so we've been working on this for some time. So we're not starting from a standing start. We've got a lot of momentum. We've been doing a lot of work. And so we want to make sure that we continue to operate with a sense of urgency.

David Arcaro

Yes. Good. Understood. And then as you've had to make tough decisions around capital prioritization and deferring some of your CapEx? I guess I was wondering with the undergrounding plan, a very big amount of capital that you've proposed here. I guess how do you think about that in the prioritization of -- within the strategic review, how you prioritize capital? Is that something that would be kind of an anchor in your overall longer-term CapEx intentions? And how important is that in your overall thinking?

Patricia Poppe

Yes. We think undergrounding is incredibly important, not for every mile but for the most risky miles. And so our 5,000-mile plan, which we've spread out over 10 years, takes in mind spreading that cost out over a longer period of time. It's just over $1 billion a year throughout the life of that 10-year plan. We think it's a very important part of risk reduction and cost reduction. The annual cost for inspections and vegetation management for those miles and the reliability impact and the cost of the reliability impact for our customers is real.

And so on those 5,000 miles, we think it's the most and best prudent deployment of capital. Obviously, that has to be approved by the commission. And as Carolyn mentioned in our prepared remarks, we're concerned with the current PD on the benefit/cost ratio that would dramatically reduce the number of miles we would do. We've got a lot of talking to do here in the state about that because we know that customers should not have to choose between being safe and being reliable and affordable. We think that undergrounding is the best answer in certain miles.

And so we would say, even in a capital -- recapital allocation world, that undergrounding is an important part of the plan. Now I will also say when we think of our $73 billion plan that we had previously declared, it was -- it's a small percentage of the total plan. So the plan doesn't hinge on underground. And I guess I just want to say out loud for the world to hear we're not doing undergrounding to make our earnings numbers and to grow CapEx. We're doing undergrounding to keep people safe. So as we think about the role that undergrounding plays, it's a key part of our safety investments on behalf of customers.

Operator

Your next question comes from the line of Richard Sunderland with Truist Securities.

Richard Sunderland

I'll follow up on that last point around undergrounding and the methodology concerns. Could you speak a little bit more to how many miles of your filing would be impacted by that? I think you said significant potentially. But I guess, more importantly, how that would impact the quantified benefits you laid out in your filing?

Patricia Poppe

Yes. We're still working through that on the exact number of miles that would result we use this benefit cost ratio. I think the thing that we're concerned about is it doesn't match the standard that we use for all other investment benefit cost ratios that we make. And so we're definitely concerned about the impact on our customers to that. So we're working through what those miles would be. And obviously, it's a proposed decision. And hopefully, we'll see some movement.

Richard Sunderland

Got it. That's helpful. And then switching gears back to that November 1 CPUC report, I know you addressed this earlier, but thinking about the strategic review context alongside that, I'm curious if you have any sense of if this could have potential signals from the commission that could inform your strategic review? Or I guess, maybe putting this another way, do you see review opportunities that appeal logical to pursue and put in front of your regulators even if there is legislative action later this year?

Patricia Poppe

That's a good question, Rich. We are thinking about that as we do all of this analysis and we see the value of our assets and the incredible people who operate them and the benefits to customers. If there's a customer beneficial outcome that even with legislative action would still be considered, we obviously will keep that on the table.

We do know that the fastest way to unlock value is policy reform. And so if that were to occur here in the near term, we'd be thinking hard about the scope and scale of the strategic review. But obviously, we're learning a lot about where we think the full potential of our businesses are, and like any good management team and Board of Directors, we're looking at the best way to unlock that value for customers and investors.

Operator

Your next question comes from the line of Aidan Kelly with JPM.

Aidan Kelly

Maybe just going on the -- like the debt front of the strategic review. Carolyn, I know you mentioned kind of mid-teens FFO to debt as maybe a North Star to think about long term. I think like previously, you also mentioned like holdco debt below the 10% of total debt. Is that also kind of intact as well? Or is there kind of flexibility to revisit that threshold?

Carolyn Burke

Yes. As we said, everything is on the table. And so we are considering both our debt profile, our capital growth and our capital return. And so I would say that we're not necessarily indicating any target for parent debt at this point in time.

Aidan Kelly

Got it. And then just one kind of lingering question on the timing of the strategic review. I believe in the past in September, you kind of mentioned like maybe a default 12- to 18-month time line and now we're kind of seeing summer 2027 as the target. Is there any kind of rationale behind like the acceleration in that time line over the past 1.5 months, I know you kind of mentioned the urgencies, is it just as simple as taking that as the reason or is there anything kind of deeper to read into that?

Patricia Poppe

Yes. When we have previously mentioned 12 to 18 months, Aidan, we were talking about that's typically what you would see from companies. We weren't intending to signal our time line. So that's what we wanted to clarify today. We want to be -- we want to really push to have a definitive direction forward that we can communicate by summer of next year.

Operator

Ladies and gentlemen, that does conclude our question-and-answer session. I would now like to turn the conference back over to Patti Poppe for closing comments.

Patricia Poppe

Thank you, Krista. Thank you, everyone, for dialing in today. Look, our electric, gas and generation businesses are strong and they're operated well and they're getting stronger every day. Now while legislative action is still possible this year, we're moving forward, and we're advancing our strategic review. We're evaluating all our available paths to unlock value for customers and owners. And you can imagine that we're doing that with a sense of urgency. We look forward to seeing you at EEI. Please stay safe out there.

Operator

And ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.