California’s largest utility is putting billions of dollars in planned investments on ice as its CEO lashes out at Sacramento over the state’s wildfire liability rules — warning that the company can no longer afford to move forward at its current pace.

PG&E announced Wednesday it plans to defer approximately $2 billion in planned investments for 2027, reducing the amount it expects to borrow while continuing to spend billions on its California operations.

The CEO Patti Poppe said the utility is being squeezed by California’s system for assigning wildfire costs, making it increasingly difficult and expensive to raise the money needed to maintain and upgrade the state’s power grid.

“We are unable to fund PG&E’s continued transformation at our current pace,” Poppe said. “Financing our work has become increasingly difficult and expensive due to the way California law assigns the cost of wildfire to utility customers and investors.”

This comes as just last week lawmakers rejected a sweeping deal pushed by Gov. Gavin Newsom to overhaul utility wildfire liability.

The proposal, which would have limited insurers’ ability to recover wildfire losses from utilities, faced fierce opposition before Democrats ultimately backed a narrower compromise focused on survivor payments and utility accountability.

The reversal sent PG&E and Edison International shares plunging as investors braced for continued wildfire liability risks.

PG&E’s board has established a four-member committee to conduct a sweeping strategic review of the company, examining potential changes to how the utility is organized and financed.

The company said it is looking for a structure that would strengthen its finances, improve affordability for customers and allow it to attract cheaper, long-term investment.

At the heart of Poppe’s frustration is California’s wildfire liability system.

The state’s utilities face enormous costs when their equipment is determined to have caused a wildfire — even when the companies complied with required safety and wildfire-prevention measures.

Insurers can also seek reimbursement from utilities after paying claims to customers whose property was destroyed.

Poppe said that system makes banks and investors view California utilities as riskier investments, driving up the cost of borrowing money.

“The people who fund building that equipment, banks and investors, face more risk here,” Poppe said. “Because of the way California law assigns the cost of wildfire to utility customers and investors, risk goes up for both of them.”

The CEO also pushed back against the idea that PG&E’s announcement was designed to pressure lawmakers into acting.

“Our customers need the Legislature to finish the job,” Poppe said. “Our customers will pay the price of their inaction.”

The company said it still expects to invest about $11.4 billion in the state next year.

PG&E stressed that the cuts will not hit critical safety programs or its obligations under its wildfire mitigation and safety plans.

Instead, the company said it is delaying or slowing certain projects that can be pushed back while it confronts its mounting financing challenges.

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