Pacific Gas &Electric Corp.’s latest quarterly earnings slid to $356 million, or $0.17 per common share, compared to $397 million, or $0.18 per share, during the second quarter of 2021. Its revenue dropped to $5.12 billion in this second quarter from $5.22 billion in the same quarter last year.

Several financial analysts during a July 28 earnings call zeroed in on the company’s plans for the Diablo Canyon Nuclear Power Plant and whether the utility will pursue relicensing.

PG&E is pleased that the state recognizes the “value” of Diablo Canyon to contribute to a greenhouse gas-free economy, Patti Poppe, PG&E Corp. CEO and President, replied. “There is a real sense of urgency” on deciding whether “to transition from being in a decommissioning posture to a life extension posture.” She added, “A lot of hurdles need to be overcome,” including getting state legislation passed next year to allow an extension of operations of the nuclear plant on the Central Coast beyond 2025.

A big advantage for PG&E of extending the life of the plant is that it will be fully depreciated by 2025.

Analysts also wanted to know the company’s position on a pending state bill calling for a long-term plan to bury thousands of miles of power lines in high fire threat regions.

Poppe said the company supports SB 884, a bill to require state utility regulators to expedite big undergrounding projects following PG&E’s announcement last year that it planned to bury 10,000 miles of lines in high-fire threat areas over a decade, estimated to cost between $20 billion and $40 billion. If passed as is, the bill would approve long-term plans outside the standard cost recovery in general rate cases, according to PG&E.

“Underground and affordability go hand in hand,” Poppe said. In a recent GRC filing, PG&E is seeking $7 billion over two years for burying lines while providing $1 billion in vegetation management savings.

Factors shaving profits

PG&E Corp.’s second quarter dip in profits was reported to be linked to the cost of the company’s bankruptcy reorganization enabling it to get a handle on its huge wildfire liability, its contributions to the state Wildfire Fund created by AB 1054, and other expenses that are “partially offset” by billions of dollars in fully backed ratepayer bonds under SB 901. The law allows the securitization of some wildfire liability costs.

“We are reducing risk and making the right investments for the future,” Poppe said on Thursday.

She pointed to the just issued $3.9 billion in 30-year ratepayer-backed bonds, which represents the remainder of PG&E’s $7.5 billion securitization approved by the California Public Utilities Commission in May 2021. The bonds replace the company’s $5 billion in temporary debt associated with its reorganization plan.

After the issuance, S&P gave the company a “stable outlook” and Fitch boosted the company from “stable” to “positive,” Chris Foster, company CFO, told financial investors.

PG&E also plans to issue a $1.4 billion securitization to cover its capital expenditures related to wildfire mitigation, if approved by the CPUC on Aug. 4.

The securitizations, which take the debt off the company’s balance sheet, “are important aspects of our financial plan,” Foster said.

The company issued dividends recently after being halted for three-and-a-half years. Holders of common stock received a total $425 million in mid-June, and owners of preferred shares received $3.5 million in May.

Costs related to wildfires, however, increased by $150 million in the three months ending June 30, compared to the same period in 2021.

In addition, the utility faces 11 felony and 20 misdemeanor charges filed by the Shasta County District Attorney’s Office for the 2020 Zogg Fire and three other blazes in Shasta. If convicted, the cost is expected to “materially exceed the $375 million of aggregate liability” for the parent and utility, according to PG&E’s July 29 10K Securities & Exchange Commission filing.

Edison International’s second quarter earnings were released later on Thursday showing the company’s net income also fell. It was $241 million, or $0.63 per share, compared to net income of $318 million, or $0.84 per share, in the second quarter of 2021.

Current will report more fully on the earnings next week.