- PG&E (NYSE:PCG +2.5%), Edison International (EIX +2.5%) and Sempra Energy (SRE +1.3%) move higher after disclosing a memorandum of understanding to reduce return on equity in 2018 and extend the next cost of capital application filing deadline by two years.
- The MOU calls for PCG to reduce its return on equity to 10.25 % from 10.4%, EIX to cut its ROE to 10.3% from 10.45%, SRE's San Diego Gas & Electric utility to lower its ROE to 10.2% from 10.3%, and SRE's SoCalGas to reduce its ROE to 10.05% from 10.1%, all beginning in 2018.
- The settlement is “shaking out better than many investors had been expecting," Guggenheim analysts say.