PCG - PG&E scraps tree-trimming program once seen as key to fire prevention - WSJ

2023-08-02 07:22:11 ET

PG&E ( NYSE: PCG ) spent ~$2.5B on a multi-year effort to reduce wildfire risk by cutting or clearing more than 1M trees growing alongside power lines, but it now says the work was largely ineffective and is eliminating the program, The Wall Street Journal reported Wednesday.

The California utility believes the program, which involved creating wide spaces between live wires and potentially hazardous trees, resulted in a 13% reduction in ignitions during periods when fire risk is highest, typically in autumn, according to the report, which cites an internal analysis by the company.

PG&E ( PCG ) reportedly expects to cut tree-related spending by ~$1B during 2023-26 as a result of discontinuing the program and other cost cuts, while it plans to increase its overall wildfire mitigation spending in the coming years as it buries more lines and takes other risk-reduction measures.

The strategy shift would mark a calculated risk by PG&E ( PCG ) that new power-line settings will be more effective than the tree-trimming program that was put in place after a series of devastating wildfires.

More on PG&E:

• Financial and valuation comparison to sector peers
• Analysis: PG&E Investor Day: Potential Dividend Reinstatement And Reduced Wildfire Risk
• Stock price return: Up 10.5% YTD, up 59% in the past 12 months

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