- California’s deadliest and most destructive wildfire broke out last Thursday.
- The Pacific Gas and Electric Company (PG&E) said it could be responsible for the fire and had exhausted its revolving line of credit to pay for a fire-related liability.
- California Public Utilities Commission President Michael Picker said he couldn’t imagine letting the California utility declare bankruptcy.
- Shares were under pressure recently but rallied on Friday following Picker’s comments.
- Watch PG&E trade live here.
The Pacific Gas and Electric Company (PG&E) soared as much as 45% early Friday after a regulator said he couldn’t imagine letting the California utility declare bankruptcy, even as it faces huge liabilities from California’s deadliest and most destructive wildfire.
“It’s not good policy to have utilities unable to finance the services and infrastructure the state of California needs,” state Public Utilities Commission President Michael Picker told Bloomberg News. “They have to have stability and economic support to get the dollars they need right now.”
Picker also told The San Francisco Chronicle the commission would soon implement a state-level provision through which utilities can pass wildfire costs to consumers.
The San Francisco-based PG&E was under pressure recently, seeing more than half of its market cap wiped out in a week, amid speculation the utility could be responsible for the wildfire, which started its devastating path through the Northern California town of Paradise last Thursday and has killed at least 63 people.
In a Tuesday filing, PG&E said it told state regulators last week that it experienced problems with transmission lines in the area of the fire around the time the blaze erupted. It added that while the cause of the fire is still under investigation, if the company’s equipment is determined to be the cause, it will suffer a “material impact.”
The company had aggregated $US3 billion from its credit line in anticipation of a fire-related liability, according to the filing. Then, on Wednesday, PG&E announced that it had exhausted its revolving line of credit.
Even with the spike on Friday, PG&E is down 45% this year.