Pacific Gas & Electric Corp. executives painted a rosy outlook, predicting financial and operational growth through 2011, during a May 22 meeting in Sonoma County. The corporation\u2019s economic growth over the next four years will be fueled by its regulated utility PG&E\u2019s $13 billion infrastructure investment program, said Peter Darbee, PG&E Corp. chair and chief executive officer. The California Public Utilities Commission already approved 85 percent of PG&E\u2019s capital projects in its rate base, insulating the utility\u2019s investments from regulatory risk and uncertainty, Darbee stressed. The CPUC authorized the utility to earn an 11.4 percent return on equity on its capital investments, with a 52 percent equity ratio. The capital projects include upgrading aging equipment to improve reliability and alleviate congestion in the transmission system; building distribution lines to serve new customers; extending transmission service to renewable energy suppliers in Southern California; and installing 1.3 million smart meters by the end of this year. PG&E is seeking further approval from the CPUC to recover $60 million for the utility\u2019s SmartMeter upgrade, and $30 million to improve its electric system reliability and operational efficiencies. On the natural gas side, the Federal Energy Regulatory Commission approved PG&E\u2019s cost recovery plan for the BC Transmission project. PG&E is seeking partners to invest half of the estimated $5 billion capital expenditures. FERC has approved a 12 percent return for PG&E\u2019s gas and electric transmission projects. PG&E trimmed $500 million from its estimated capital expenditures for the next four years since the company\u2019s investor report last December, said Christopher Johns, PG&E\u2019s chief financial officer and senior vice president. The most significant delay is expected to be postponement of PG&E\u2019s Central California Clean Energy Electric Transmission line from Fresno to alleviate congestion and provide service to the fast-growing Fresno area because of permitting issues, Johns said. At the same time, PG&E is moving forward through the FERC process on the Pacific Connector LNG Pipeline. It is a $1 billion project of which PG&E has budgeted $50 million for the 2008 to 2011 timeframe. Meanwhile, PG&E remains largely insulated from the economic recession because of the CPUC\u2019s decoupling of the utility\u2019s revenues from its sales. \u201cEven if our sales go down our revenues will be stable and not impacted by the recession,\u201d Darbee said. \u201cOur challenge is to manage our costs.\u201d PG&E is also well positioned for what the utility views as the inevitable launch of a federal cap and trade carbon market within two years after a new administration takes office in Washington, Darbee said. \u201cPG&E will benefit from the fact that we have one of lowest carbon emissions of U.S. utilities.\u201d PG&E is assessing whether to acquire renewable projects and has advocated for Congress to renew the renewable investment tax credit. The House approved May 21 the Energy and Job Creation Act of 2008, the vehicle to extend solar and wind production tax credits. At the same time, PG&E has narrowed spending on its energy efficiency programs to $90 to $130 million for 2008 to 2011 because of uncertainty over the CPUC process and the impact of the recession on energy conservation, Johns said. Nonetheless, PG&E projects that energy efficiency programs will meet 53 percent of the utility\u2019s expected load growth, said William Morrow, PG&E ehief executive officer and president.