Californian utility companies like $PCG $EIX etc. are operating in a state where policymakers want the utility companies to both to invest aggressively in renewable energy while also upgrading their infrastructure.

While having monopoly control of the markets they serve, these utility companies are stretched thin trying to please policymakers. And with a severe heat wave stretching power grids thin, utility companies have never faced a bigger dilemma on whether to allocate resources to growing their electricity production or to upgrade their infrastructure.

The growth in electric vehicles in California has helped reduce emissions on Californian roads and made the state less dependent on fossil fuels. At the same time, they create a bigger strain on the power grid. Many see electric vehicles as secondary batteries, whereas in the case of a blackout, EV owners can use their vehicles as a battery to power their houses. The same thing goes for solar systems and the battery that comes with it.

Investors shouldn't see the surging demand for electricity in California as a bullish thing for PG&E and other utility stocks that operate in the state. Because the surging demand comes with blackouts. There's no point in betting that these utility companies will benefit more when people use more energy when they can't even fully capitalize on the opportunity.

At the same time, the cash flows for these utility companies will continue to remain negative as these companies spend more to meet the high demands of regulators (which can be both a good and a bad thing for California residents).