A new bill could help relieve PG&E from financial wildfire trouble
Reason.com & Reason TV Editor-At-Large Nick Gillespie on how private firefighters are helping to protect the homes of wealthy people in California.
PG&E shares were climbing back up Tuesday after a tumultuous few weeks linking the utility giant to the worst California wildfire in history, which killed more than 80 people, on reports that a new bill is coming to help absorb some of the company’s costs.
PG&E shares were up more than 3 percent after Kellie Smith, an adviser to a California lawmaker Chris Holden, told Bloomberg she is drafting a bill to help provide relief to PG&E as it could face more than $15 billion in potential liabilities for its possible link to the deadliest wildfire in the state’s history.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PCG | PG&E CORP. | 17.26 | +0.23 | +1.35% |
Smith told the outlet that Holden is concerned about “instability of the utility and the adverse effect it could have on ratepayers and the ability to deliver services at a reasonable cost.” The new legislation could be introduced as early as Dec. 3, Smith added.
In the past, Holden has been an activist for California utility companies coping with wildfire costs.
The share price pop also follows another Bloomberg report that a regulatory official told investors that the agency does not want the utility giant to go into bankruptcy should it be found responsible for the wildfire.
Last week, PG&E disclosed in an SEC filing that while it had renewed its liability insurance coverage for wildfire events in its most recent quarter to $1.4 billion, but that number is a far cry from the early fire damage estimates from Citigroup, which put the damages at more than $15 billion, so far.
“While the cause of the Camp Fire is still under investigation, if the Utility’s equipment is determined to be the cause, the Utility could be subject to significant liability in excess of insurance coverage that would be expected to have a material impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows," the company said in the filing last week.
What’s more, PG&E is already facing liabilities from wildfires in California from 2017 that destroyed more than 240,000 acres. According to a regulatory filing from earlier this month, state investigators have linked PG&E’s equipment to about 17 fires.