Utility Company PG&E Blamed for California Wildfires and Explores Bankruptcy


 
 
12:22 01/07/2019

PG&E Corp. saw its shares nosedive on Friday after Wall Street learned that the company is exploring bankruptcy.

According to a Reuters report, the utility company had been hit with major liabilities from fatal wildfires that occurred in California as its equipment was blamed for the fires. Reuters cited anonymous sources that are familiar with the company's plans.

The San Francisco-based company fell in after-hours trading, and by the late afternoon dropped about 20% to $19.70.

The NPR has also reported that PG&E is considering to sell its natural gas unit. The net proceeds from the sale of the gas division would be used to set up a fund to pay billions of dollars in potential claims from wildfires, according to sources.

PGE stated, "The Board is actively assessing PG&E's operations, finances, management, structure, and governance -- and remains focused on improving safety and operational effectiveness."

California's fire agency, Cal Fire, determined that PG&E power equipment was responsible for starting at least a dozen major fires across Northern California in 2017.

Regulators are also investigating whether PG&E equipment sparked November's Camp Fire, California's deadliest and most destructive in the state's history.

Michael Wara, a lawyer has said, "They need to be thinking very hard about how to create safety for Californians rather than how to make money for shareholders when they're not being totally transparent, especially in the current context where there's a lack of trust and so many people that have been harmed by PG&E's infrastructure."

He also said, "What California urgently needs and wants from its utilities right now is hard thinking about how to better protect communities from fire. And it's hard to see that going on."


This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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