PG&E is heavily dependent on the regulatory decisions made by the California Public Utilities Commission. The utility must seek approval for most significant decisions and its rates are subject to regulatory directives.
Increasingly strict environmental restrictions could cut electricity supply and cripple the company’s operations. Overly-restrictive environmental standards could trigger another energy crisis.
Because of the nature of its bankruptcy deal, PG&E is in a rare position where if its credit improves too much, it could hurt the utility. Because many of the regulatory protections it enjoys are subject to the terms of the bankruptcy settlement, any change in those conditions could have a significant impact on the company.