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PG&E (PCG) owed $65.5 billion at the end of September 2026, up from $59.8 billion a year earlier. For a holder, that debt matters because borrowing has become expensive for the California utility. Management has already cut $2 billion from its 2027 capital plan, citing high financing costs, but the company still plans $11.4 billion of capital spending in 2027. So how much of that will PG&E have to borrow?
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PG&E Borrows To Fund New Investment
On the October 22, 2026 call, management said it expects to pay for its 2027 investment with cash from operations and $4 billion to $5 billion of new utility debt. About $1 billion of that new debt replaces debt coming due, so roughly $3 billion to $4 billion is new borrowing.
PG&E already spends more on its system than its operations bring in. Free cash flow, the cash the company has left after paying for its investment, was negative $4.98 billion over the twelve months to September 2026, against negative $2.77 billion a year earlier.
Management has a reason to keep investing at that pace. On the same call, it called customer capital investment the primary driver of its earnings growth, adding that PG&E has reinvested nearly all of its earnings into the system since 2020.
How Does PG&E’s Debt Compare With The S&P 500?
PG&E carries far more debt for its size than the broader market. At the October 27, 2026 close, the utility’s total debt equaled 229.4% of its stock market value. For the S&P 500 taken as one company, a measure that spans every industry rather than utilities alone, the figure was 19.4%. That is a wide gap.
The cost of that debt already shows up in what PG&E builds. Management said the company has begun notifying customers whose projects may be delayed, and the changes affect the connection of new clean energy resources and customer projects, including those supporting housing in California.
Customers also pay for the debt directly. Management said the debt PG&E has issued since 2017, while rated below investment grade, will cost its customers an extra $4 billion in interest over the life of that financing.
Is PG&E Stock Already Priced For Its Debt?
PG&E stock trades at 9.2 times earnings, against 22.6 for the S&P 500, a discount that may partly reflect its debt. The price likely assumes PG&E stays heavily indebted for some time, though a multiple that low can reflect other worries too. The stock also lost 19.9% in the year to October 27, 2026, while the S&P 500 returned 15.0%.
Management’s own outlook is more upbeat than that price. On the October 22 call, it reaffirmed its 2026 core earnings per share guidance of $1.64 to $1.66, up 10% from 2025 at the midpoint. Management also said it had already addressed its expected need to sell new shares through 2030, and that it would not issue shares at the current stock price.
So the debt deserves a holder’s attention rather than alarm: it is large against the stock’s value and still rising, while management still expects earnings to grow. PG&E has stopped giving guidance beyond 2027 while it runs a strategic review, and management expects to share the outcome no later than summer 2027. That outcome could change the picture. PG&E’s total debt is the figure to watch in its next report, expected in February 2027.
How To Act On PCG?
Not necessarily on PG&E alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here are two companies from PG&E’s own industry that have beaten it. Over the five years to October 2026, Consolidated Edison stock rose 80% and NiSource stock rose 107%, while PG&E stock rose 14.3%.
Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.
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