PG&E file 2026 Cost of Capital applications, possible rise in bills

(FOX40.COM) — It was a busy day today for PG&E, Southern California Gas Company, and San Diego Gas & Electric as they submitted their Cost of Capital applications for 2026.
•Video above: California approves monthly fixed charges on utility bills

According to PG&E’s statement, these applications are submitted every three years. It helps set the utilities’ financial return expected by people who provide money to utilities for upfront funding for essential energy systems improvements. These improvements include wildfire mitigation, gas and electric safety, and reliability projects.

California’s policy of inverse condemnation makes utilities strictly liable for damages caused by their equipment.

PG&E stated that they are seeking to adequately compensate investors for these risks consistent with other companies that are in the same risk levels across the country.

PG&E said, “The application includes testimony from a third-party expert showing that based on PG&E’s risks, its proposed 11.3% return on equity investment is reasonable.  By setting the return at this level, the company is not guaranteed to recover it.  This application just provides the opportunity to do so.”

Officials said that PG&E pays the lowest dividend in the utility industry. As a result, they reinvest 97 percent of what they earn back into the company — which also includes programs that make the system safer for customers.

If the proposal gets approved, PG&E said that it would increase residential customer bills by about $5.50 per month. It reflects a higher interest rate environment but this change would not go in effect until January 2026 at the earliest.

PG&E said they expect the average annual bill increases will still be limited between two percent to four percent throughout 2026 — without any problems in safety.