PG&E stock price plunges as California wildfires burn
Shares in California electric utility PG&E plummeted Wednesday to their lowest level in more than a decade with some Californians who have lost homes saying the power company is at fault for sparking the state's deadliest and most destructive wildfire.
In a lawsuit filed this week, homeowners said a high voltage transmission line failed, producing the sparks that caused the fire. They accuse Pacific Gas & Electric Co. of failing to maintain infrastructure.
Shares in the San Francisco company plunged another 31 percent Wednesday, to $25.99. The have lost about 45 percent of their value since the Camp Fire broke out northeast of San Francisco, destroying thousands of homes and killing dozens of people as it leveled the town of Paradise. Investors fear the company does not have enough insurance to cover the losses and potential punitive damages it may face.
PG&E told state regulators last week that it experienced a problem on a transmission line just before the blaze erupted in the vicinity. Investigators have not determined the cause of the blaze.
The pressure on PG&E comes even though Gov. Jerry Brown signed legislation in September giving utilities some relief beginning next year. The law made it easier for utilities to pass along costs from fire-related damages to consumers and also avoid possible bankruptcy from a series of major fires that occurred during the 2017 fire season that produced more than $10 billion in losses.
But the law has a gap: No damages specific to 2018 were included, so utilities face a higher bar to bill customers to cover those costs. And this year has already supplanted 2017 as the most destructive in California's recorded history.
Authorities have not determined a cause for either of two major blazes burning now, but Pacific Gas & Electric and Southern California Edison, a unit of Edison International, have reported irregularities with their equipment near the time and place where both ignited.
Betsy Ann Cowley, a property owner near the site where a deadly wildfire started in Northern California, said Monday that PG&E sought access to her property just before the blaze started because the utility's power lines were causing sparks.
Moody's Investors Service said Monday that the "shortcomings" in the legislation reflect negatively on PG&E's credit rating, which is barely investment grade.
"Moody's negative outlook incorporates the view that additional financial stress for PG&E is likely," Moody's spokesman Joe Mielenhausen said in an email. "Going forward, we will look for signs of additional legislative and regulatory support for the utility as it works through various legal processes."
A PG&E spokesman noted to CBS News that "the cause of the Camp Fire has not yet been determined" and then added: "Nothing is more important than the safety of our customers, employees, contractors and the communities we serve. Our hearts are with the communities impacted by the Camp Fire. The loss of life and property is staggering. Right now, our entire company is focused on supporting first responders and assisting our customers and communities impacted by the Camp Fire. We encourage the public to follow their directions and warnings as fire conditions continue to change."
Last week PG&E told state regulators that it detected a problem on an electrical transmission line near the site of the blaze minutes before the fire broke out. The utility later said it observed damage to a transmission tower on the line, and a PG&E spokeswoman said the company will cooperate with any investigations.
Southern California Edison told regulators there was an outage on an electrical circuit near the site where the Woolsey Fire started in Ventura County. It quickly spread into Malibu and destroyed hundreds of homes.
SoCal Edison said the report was submitted out of an abundance of caution, and there was no indication from fire officials that its equipment may have been involved. The report said the fire was reported around 2:24 p.m. Thursday, two minutes after the outage.
Shares of parent company Edison International have tumbled more than 20 percent since the fire started.