Patti Poppe: Yes, you bet. Yes, it’s a great question, Steve. And I also think it’s something that’s been hard to understand in all of the public comments and advocacy. Look, there’s some catch-up that needs to be done here. And in California, we have this construct where we need to do necessary work and the utility bears the risk of doing all the wildfire preventive work. And so there are some onetime short-term costs that are embedded in the early years of this rate proceeding. But as the years progress, then those things come out of the bill. So for example, as we do the recovery of the 2023 revenues that obviously needs to be captured then. And our proposal is a 12-month capture in 2024. So if you can imagine a customer would be collecting bills in 2024, that we are paying bills in 2024 that reflect 2024 and 2023s revenue.
And then that comes off. And then the bills come down significantly. And so what we’re — the point we’re trying to make is that there is some catch-up in this, but bills can definitely improve, that’s just math. But what I think is really important and the part that people don’t necessarily yet appreciate about the new PG&E model is our simple affordable model. This is not just a slogan, it’s not just a thing we say, this is something that we do every day. And that is funding capital investment through cost savings, cost reduction we have had dramatic cost improvements already on our undergrounding, on our vegetation management. Our next big hurdle is our system inspections. We’ve got major improvements that we can make there. Then we add in the efficient financing.
Look, getting our credit ratings in the right place will save customers money, not spreading out the collection of the 2023 revenues over 3 and 4 years will save customers money. We have the ability to reduce costs in the bills, and that’s what we’re focused on every day. I think that’s a new habit, a new pattern for PG&E to be recognized for. And so I can appreciate that regulators and others have questions and wonder if that’s actually what we’re going to do. All I can say, Steve, I think you know my track record, we can do real cost savings that benefit customers while we’re making these very necessary investments in the infrastructure.
Steven Fleishman: Okay. Great. And then just — could you just go through the steps here. So the GRCs on the agenda for the meeting next week. Is that mean they likely will rule or could they delay it? And could we still get another alternate? Or are we likely just going to kind of get a final order.
Patti Poppe: Well we’re hopeful, Steve, that November 2 reflects a final decision. But what’s on our mind is we want to make sure that it’s the right final decision. And so — if — I think there’s still two meetings, November 16 and November 30. If in fact, they wanted to take more time to get it right. But we’re hopeful that November 2 represents a final decision.
Steven Fleishman: Okay, great. Thank you.
Patti Poppe: Thanks, Steve.
Operator: The next question is from Nicholas Campanella with Barclays. Your line is open.
Nicholas Campanella: Hey thanks for taking the question. I guess just very clear on the FFO to debt disclosures here, but just can you elaborate on just the agency conversations on the path to IG right here right now? And how we should think about if this PD is adopted your path to get there? Thanks.
Carolyn Burke: Yes. Thanks for the question. We have been in continuous conversation with the rating agencies about our rating. And we’ve actually already spoken to them about the GRC and the PDs and the impact on FFO to debt. But we’ve also talked to them about our commitment to achieving mid-teens in 2024 and other ways that we can get there if we need to. But it is challenged, and it’s going to slow — it will slow our progress on our balance sheet. So the path to get there really is about FFO to debt and getting to at least the 13% to the 14%, and that’s what we’re committed to doing over the course of the next 2 years for sure, and we’re committed to getting to mid-teens by the end of 2024.
Nicholas Campanella: That’s helpful. And I think you also said in regards to the wildfire fund, you booked like a $400 million and change receivable. Is this the first time the fund has been tapped? And correct me if I’m wrong there, but just what’s the process around actually receiving that?
Carolyn Burke: So we haven’t actually tapped the wildfire fund. So on the Dixie accrual, we did increase the accrual by $425 million. We have an accrual of $1.6 billion in total at this point in time. But what’s important is that you can’t tap the fund until you actually — until we have actually paid out $1 billion in settlement. So to date, we have a 730 — we’ve settled around $730 million, and we’ve paid out $575 million. So we have a ways to go to fully paying out $1 billion. But the statute limitations on Dixie actually runs out in October of 2024. So we are in preparing for that filing as we speak and working with the fund on how to ensure a smooth of a process as possible.
Patti Poppe: And this is Patti. I’ll just add in. So no, it hasn’t been done before, Nicolas. And so we’re working through what that process will be. And so that’s not perfectly clear, but I do want to remind everyone that the benefits of AB 1054, there’s — it’s a fundamental change in California that really helps create the certainty required to number one, prevent a liquidity issue in the event of a significant incident. It allows us if, in fact, we had did have to, in a hurry, get access to that fund, we could access it to pay third-party damages. But as Carolyn said, it’s actually — it takes time to settle and to pay out those settlements, but the enhanced prudency standard that comes with AB 1054 is another enhancement that will be good to see as we move forward here.
And so I think there’s a lot to appreciate about AB 1054 and the protections it provides and the certainty it allows for here in California as we do this necessary safety work to make the system safer faster.
