PG&E Corporation (PCG) Rate Increase is Dependent on Unrecoverable Spend - BofA

BofA Securities analyst Julien Dumoulin-Smith noted that the possibility for a rate increase for PG&E Corporation (NYSE: PCG) is dependent on allocation of the total $3.2 Bn of unrecoverable spend committed as part of Ab1054. He believes that this is the biggest piece to reconcile rate base (seemingly $0.6Bn in ’20, $1 Bn in ’21 and then ~$1.15Bn in ’22) as the spend does not earn an ROE but does earn a recovery for debt & recovery of capital.

The analyst stated "This is likely key to make the overall rate increase more palatable to customers in the near years. This should not be confused with this lost return on capital with many already reflecting some placeholder on unrecoverable capital for now (~$150Mn/yr appears the norm)".

For an analyst ratings summary and ratings history on PG&E Corporation click here. For more ratings news on PG&E Corporation click here.

Shares of PG&E Corporation closed at $10.73 yesterday.

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