PG&E reports another power-line failure in Camp Fire, shares drop

REUTERS/Gene Blevins

• California’s deadliest and most destructive wildfire in its history broke out on November 8.
• The Pacific Gas and Electric Company (PG&E) previously said it could be responsible for the fire as it experienced problems with transmission lines when the blaze erupted.
• The utility on Friday reported that it experienced another power-line outage when the so-called Camp Fire broke out.
• A regulator Thursday said he couldn’t imagine letting the California utility declare bankruptcy even as it faces huge liabilities from the wildfire.
• Watch PG&E trade live.

Shares of the Pacific Gas and Electric Company (PG&E) dropped as much as 7% on Monday after the utility disclosed that it experienced another power-line outage on the morning of November 8 when the deadly wildfire broke out.

A circuit in Concow, Butte County, failed at about 6:45 a.m. on that morning, the San Francisco-based utility said Friday in a filing.

The California Department of Forestry and Fire Protection, known as Cal Fire, has collected equipment on that circuit and “secured a location near PG&E facilities,” the company said.

The cause of the blaze is still under investigation. It was 65% contained as of Sunday and had killed at least 76 people, according to Bloomberg.

In a previous filing, PG&E said it experienced problems with transmission lines in the area of the fire around the time the blaze erupted. It added that if the company’s equipment is determined to be the cause, it will suffer a “material impact.” 

The company had aggregated $3 billion from its credit line in anticipation of a fire-related liability, according to the filing. PG&E later said that it had exhausted its revolving line of credit.

Now all eyes are on how California’s government will step in to save PG&E should it eventually be found responsible for California’s most destructive wildfire and should any potential liability exceed the utility’s resources.

California Public Utilities Commission President Michael Picker last Thursday said he couldn’t imagine letting the California utility declare bankruptcy.

“It’s not good policy to have utilities unable to finance the services and infrastructure the state of California needs,” Picker told Bloomberg News. “They have to have stability and economic support to get the dollars they need right now.”

Shares have been under pressure and more than half of the company’s market cap has been wiped out in a week amid speculation the utility could be responsible for the wildfire. They rallied as much as 45% on Friday following Picker’s comments but are now down 48% since the start of this year.

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