Pacific Gas and Electric Company (PG&E), California’s largest electric utility, faces a range of consequences as a result of deadly wildfires that have ravaged the state.
In the last two years, California has been hit with a number of destructive wildfires — resulting in a high number of deaths. One of these fires — the Camp Fire — burned around 150,000 acres north of Sacramento in November, destroying nearly 19,000 structures and killing at least 86 people. While the cause of this disaster is still being investigated, evidence suggests that a downed transmission line owned by PG&E sparked the fire.
News of the company’s possible culpability has sent its stock tumbling. PG&E’s stock price on Monday dipped more than 20 percent on Monday — much of the fall is due to its likelihood of filing for bankruptcy. While the California Utilities Commission does not want the PG&E to fall into bankruptcy, the utility’s unpopularity with voters could make it difficult for lawmakers to do anything that appears to be a bailout.
“PG&E could go bankrupt within the next 60 days,” Michael Wara, a lawyer and research fellow at Stanford’s Woods Institute for the Environment, said to Utility Dive in a Monday report. “They are basically cut off from capital markets, and the gas system is worth significantly more on its own than its current market capitalization.”
However, bankruptcy could be the least of the utility’s worries.
In the final days of 2018, California Attorney General Xavier Becerra filed documents with the Northern California’s federal district court warning PG&E that it could face murder or manslaughter charges if it’s found to be responsible for the deadly wildfires. While many energy lawyers agree a murder charge would be very difficult to prove in court, Becerra’s ambitions for higher office could prompt him to go on the offensive.
There is also talk of PG&E selling off its natural gas assets.
Dubbed “Project Falcon,” the utility is considering whether or not to sell off its natural gas division this spring, with net proceeds of the sale being used to establish a fund to pay billions in potential liability costs stemming from the wildfires.
PG&E has been mostly mum on what its future holds. As for now, the company says it’s heavily focused on increasing the safety of its infrastructure.
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