Pacific Gas and Electric Company took a $2.5 billion charge for damage claims related to wildfires in northern California, sending shares lower.
The San Francisco-based utility now predicts $6.2 billion to $6.3 billion of costs this year related to the blazes, and its third-quarter financial results didn't include the impact of last month's blackouts for millions of customers that were designed to prevent fires during dry windy conditions.
PG&E, which sought Chapter 11 bankruptcy protection in January, lost $1.6 billion, or $3.06 a share, during the three months through September. On an adjusted basis, which excludes costs related to the fires, the utility earned $1.11 a share, trailing the $1.13 estimate from Wall Street analysts surveyed by Refinitiv. Sales rose 1.1 percent to $4.43 billion, missing projections of $4.75 billion.
"We continue to make progress in our efforts to move expeditiously through the Chapter 11 process, and remain focused on a fair and prompt resolution of wildfire victims' claims," PG&E CEO and President Bill Johnson said in a statement.
"We also remain dedicated to the safe operation of our gas and electric systems, and in particular, to reducing the risk of wildfire in our communities. This work has involved in recent weeks shutting off power for safety in anticipation of dangerous weather conditions -- a decision that we know causes hardship but is done solely in the interest of public safety."
PG&E shares have lost more than 83 percent of their value since Nov. 8, 2018, when the Camp Fire, the deadliest and most destructive wildfire in California history broke out. The California Department of Forestry and Fire Protection has determined that PG&E was responsible for that blaze and others. In September, the utility reached an $11 billion settlement for claims tied to the 2017 and 2018 wildfires.
Stockholders in the utility are contending with growing risk that their holdings will be completely wiped out. A federal bankruptcy judge ruled in October that PG&E doesn’t have the right to sole control of its reorganization and that a plan put forth by bondholders, led by the hedge fund Elliott Management and supported by California citizens with wildfire-damage claims against the utility, must be considered.