Risk

PG&E Books Loss on Wildfire Liability

The company said there was ‘substantial doubt’ about its future.
Lauren MuskettFebruary 28, 2019
PG&E Books Loss on Wildfire Liability

Pacific Gas & Electric, the California utility company, said it has booked total charges of $14 billion from California wildfires last year and there is “substantial doubt” over its prospects as a going concern.

California State officials have suggested PG&E sell some of its operations, including its natural gas division, to pay wildfire claims. They have floated a possible state takeover.

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The company said Thursday in its fourth-quarter earnings report that its power equipment was probably the cause of the deadly Camp Fire.

PG&E said a “broken C-hook” near the remote town of Pulga was the probable cause of the fire that killed 85 people. On Wednesday, The Wall Street Journal reported PG&E delayed safety work on the transmission line after telling regulators it intended to replace towers and wires.

“We recognize that more must be done to adapt to and address the increasing threat of wildfires and extreme weather in order to keep our customers and communities safe,” interim CEO John Simon said. “We are taking action now on important safety and maintenance measures identified through our accelerated and enhanced safety inspections and will continue to keep our regulators, customers, and investors informed of our efforts.”

PG&E filed for Chapter 11 bankruptcy protection in January amid an estimated $30 billion in liabilities from wildfires in 2017 and 2018. In December, the California Public Utilities Commission said it was investigating PG&E over falsified data related to the safety of its natural gas pipelines.

“The company is facing extraordinary challenges relating to the 2018 Camp Fire and 2017 Northern California wildfires. Management has concluded that these circumstances raise substantial doubt about PG&E Corporation’s and the Utility’s ability to continue as going concerns,” the company said.

The Camp Fire killed at least 86 people and destroyed 14,000 homes.