Report published September 28, 2026

Goldman Sachs: Pulse Check on California — Wildfire Reform Remains Uncertain, Potential Higher Borrowing Costs Presents Affordability Risk

Goldman Sachs · September 28, 2026

Following the California legislature's failure to enact comprehensive wildfire reform, Goldman Sachs analyzes credit rating pressures and calculates that a 25–100 bps increase in utility borrowing costs would raise monthly residential customer bills by 0.5%–3.3%. Goldman Sachs maintains Buy ratings on PCG (trading at a 55% discount) and SRE, while remaining Neutral on EIX.

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Finvaulta summarizes Goldman Sachs's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.California's legislative session ended without comprehensive wildfire liability reform, leaving the potential for a pre-election special session uncertain.
2.Higher utility borrowing costs (25–100 bps) resulting from credit rating pressure could increase monthly residential customer bills across California IOUs by 0.5%–3.3% ($0.72–$3.89/month).
3.PG&E (PCG) exhibits the highest bill sensitivity and faces significant debt maturities (~$29bn in 2026–2030), but remains Buy-rated given solid fundamentals and a 55% valuation discount.

Pulse check on California: Wildfire reform remains uncertain, potential higher borrowing costs presents affordability risk
How did we get here?
Where do we stand on credit ratings/outlooks?
Potential Impact on Customer Bills and Affordability from Higher Borrowing Costs
Our View
Valuation and Key Risks

Report data

Exhibit 2: Higher financing costs could translate into incremental customer bill pressure

Metric	Estimate	Context
CA IOU Monthly Residential Bill Sensitivity to Borrowing Cost Increase (+25bp to +100bp)	0.5 - 3.3%	Customer bill sensitivity to 25–100bp increase in borrowing costs across PCG, SCE, and SDG&E.
CA IOU Monthly Residential Customer Dollar Bill Impact (+25bp to +100bp)	0.72 - 3.89 USD/month	Monthly dollar bill impact across California IOUs under 25bp to 100bp higher borrowing costs.
PG&E Utility Debt	55 USD billions	Estimated utility debt carried by PG&E in 2026.
PG&E Debt Maturities (2026-2030)	29 USD billions	Total debt retiring within the next 5 years for PCG.
PG&E Debt Maturities Beyond 2030	40 USD billions	Total debt retiring beyond 2030 for PCG.

Source: EIA, Goldman Sachs Global Investment Research; Goldman Sachs Global Investment Research; Company 10-K filings, Goldman Sachs Global Investment Research. This is a dated model snapshot, not a live forecast.