California regulators on Thursday extended for two years the period during which utilities owned by PG&E Corp. (PCG) and Edison International (EIX) can collect funds from customers in the form of authorized rates of return on equity.

The California Public Utilities Commission agreed to postpone the date for Pacific Gas & Electric Co. and Southern California Edison to reapply for authorized costs of capital to April 2012, from April 2010. The commission agreed with the utilities and customer group the Division of Ratepayer Advocates that the financial crisis and continuing volatility in the debt and equity markets could lead to an initial increase in utility rates to cover higher near-term capital costs, followed by a drop in rates when markets settle down and capital costs drop, and would be disruptive to customers.

PG&E will retain its 11.35% rate of return on equity through 2010 and maintain its capital structure, including a 52% equity component, through 2012, the utility said in a filing with the Securities & Exchange Commission.

Edison's authorized rate of return on equity is 11.5%, according to documents filed with the CPUC.

One or both utilities' cost of capital, including ROE, could be readjusted prior to 2012 if there is a significant change in the selected interest-rate index and/or the company's credit rating, according to the CPUC. An adjustment could be triggered if the 12-month, October through September, average yield for Moody's Investors Services' utility bond index rises or falls by more than 1%, or if a ratings agency changes a utility's credit rating.

Shares of PG&E were recently trading 1% higher around $42.23, while shares of Edison International were 0.7% higher around $33.30.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com