North American Utilities Weekly See You in AZ!; D Debate; Winners Keep Winning; AGA Qbank; SB 254 Phase II Senate Committee Hearings; Earnings Summary; News Flow; Comps

Research evidence excerpt

North American Utilities Weekly See You in AZ!; D Debate; Winners Keep Winning; AGA Qbank; SB 254 Phase II Senate Committee Hearings; Earnings Summary; News Flow; Comps

tting legislation done in the current session.

Among key topics, discussions covered 1) exploring non-ratepayer funding sources such

as general fund revenues (CPUC Chief Deputy), 2) building a more unified program for

IOU employees to report safety issues (OEIS), 3) risk-adjusted tools beyond non by-

passable surcharges for wildfire cost allocation (Senator Stern), 4) aligning cost sharing

with wildfire risk by geography and home-hardening responsibility (Senator Caballero),

5) opposing inverse condemnation rollback and risk standards that lower IOU liabilities

(League of California Cities), 6) tightening accountability around IOU wildfire

mitigation spend (Every Survivor’s Network), and 7) advancing SB254’s “fast-pay”

facility to accelerate survivor compensation (Senator Perez). Overall, inverse

condemnation carveouts, negligence standard transition, fund recapitalization,

subrogation waivers, state administered wildfire liability insurance and a backstop

solution all remain in the realm of possibilities, though we note a few senators held a firm

line against removing inverse condemnation, which we did not view as a surprise given

previous key stakeholder views. We do not expect a bill to hit the docket until August near

session end.

• US Tactical Derivatives Strategy: Only You Can Prevent Wildfires: Buy PCG Call

Spreads. Our Global Equity Derivatives Strategy team recommends “buying September

call spreads on PG&E (PCG) ahead of the August summer legislative session, as

incremental progress on wildfire reform could drive a multiple re-rating. Shares have