# PG&E to scale back spending following failure of wildfire liability bill > Source: > Published: 2026-09-02 20:25:55+00:00 **Getting your** [Trinity Audio](//trinityaudio.ai)player ready...OAKLAND — PG&E plans to scale back its capital spending by billions of dollars — including reduced power connections for new residences — after efforts to reform California’s wildfire liability rules collapsed in the state Legislature on Tuesday. The investor-owned utility announced it will slash capital spending by $2 billion in 2027 to $11.4 billion – a 14.9% reduction from the $13.4 billion PG&E had been planning to spend on an array of projects. At issue was [Senate Bill 492](https://www.mercurynews.com/2026/09/01/wildfire-reform-proposal-dies-at-the-last-minute-amid-pushback-from-edison-pge-sempra/), which would have shifted some costs related to wildfires. After Gov. Gavin Newsom and legislative leaders reached a deal last week that would have put no limits on survivor compensation or lawyer fees for individual lawsuits, stock prices for utilities, including PG&E, nosedived. The agreement also would have allowed insurance companies to still sue utilities to recover costs for claims and prevent private equity firm investments in insurance claims. PG&E and other state utilities, such as Southern California Edison and San Diego Gas & Electric, said without reforms from state lawmakers, power companies are forced to bear too great a burden for wildfire risks. “The current wildfire liability framework is unsustainable,” PG&E CEO Patricia Poppe said in an interview with this news organization. “It is too expensive for our customers. With this liability construct in California, our customers pay for claims any time our equipment is involved, even when we do nothing wrong.” Oakland-based PG&E has launched a wide-ranging strategic review of its businesses due to the bill’s failure. According to PG&E, the current wildfire liability system in California imperils its credit rating, shoves borrowing costs higher and blunts its ability to attract the capital needed for future expenditures. “California utilities act as uncompensated insurers of last resort, which is proving unsustainable,” PG&E stated. Survivors of catastrophic blazes and consumer advocates viewed the death of SB 492 as a victory. “Wildfire survivors fought the utility bailout and won,” Every Fire Survivors Network and Consumer Watchdog said in a joint statement. “Legislators heard us, stood up to enormous pressure from the governor and the utilities, and rejected the biggest bailout protections they demanded.” State legislative and executive leaders have yet to craft a plan to determine how much California’s major utilities should pay when their equipment triggers a wildfire disaster. As a result, PG&E intends to delay or defer several categories of work: connections for new housing projects of all kinds, interconnections to new renewable energy projects, company technology upgrades, and “large loads beyond 1.8 gigawatts,” a company presentation states. By spending less, PG&E also reduces its borrowing costs, which could help the company keep its credit rating at a reasonable benchmark. “Aapartments, affordable homes, single-family homes, they all could be affected,” Poppe said. “There is not a bigger problem in California than housing, and this bill failure will worsen that problem.” Data centers, advanced manufacturing projects, factories, tech hubs, and office buildings are among the types of major projects that also could be affected. “These projects aren’t safety related,” Poppe said. “But these are projects that are needed for California’s growth and prosperity.” Poppe said if state lawmakers produce the needed wildfire liability reforms, the economy in California could boom as more projects that require electricity, including housing sites, are connected to the power grid. Poppe said PG&E has taken steps to transform itself into a more efficient and productive company while reducing customer monthly bills at the same time. “PG&E is like a great racehorse trapped in a barn,” Poppe said. “Wildfire reform would unlock massive value, job creation, housing development and tech investment.”