PG&E Corp (NYSE: PCG)
PG&E shares dipped once again Tuesday after S&P Global Ratings slashed the credit rating of the California-based utility to junk status. To add salt to injury, reports surfaced that Patrick Hogan, a top executive overseeing the Pacific Gas and Electric Co., unit will retire from the company. His retirement wasn’t expected and came amid growing concerns that PG&E is likely to go bankrupt.
Hogan began working at PG&E in 2013 and is expected to leave by January 28. He is going to be replaced by Michael Lewis, who has served as Vice President of electric distribution operations at the company since August last year.
Geisha Williams, Chief Executive Officer and President of PG&E later confirmed hailed the appointment of Lewis saying, “We are fortunate to have an industry leader like Michael to help direct our electric work as our energy landscape continues to experience unprecedented change.”
PG&E stock lost more than 14% during the regular trading session on Tuesday. The stock fell as much as 22% on Monday, and 25% in postmarket trade on Friday.
Investors fear that the utility could soon file for bankruptcy due to billions of dollars it may be forced to pay in liabilities arising from the wildfires that swept across California in 2017 and 2018. However, a bankruptcy filing may not happen if lawmakers in California approve a bill that will allow the company to pass on costs to its customers with higher monthly power bills.
S&P Global Ratings lowered their rating on PG&E from “BBB-” to “B” saying that the utility faces political and regulatory pressure for the role its equipment is believed to have played in the deadly blazes.
“We expect that negative public sentiment and the increased political pressure will challenge the regulators’ willingness and ability to implement measures to protect credit quality over the near term,” S&P said. “We could also lower the ratings by one or more notches if management does not clearly articulate specific steps it will take to preserve credit quality over the long term.”
PG&E Corporation, through its subsidiary, Pacific Gas and Electric Company, engages in the sale and delivery of electricity and natural gas to residential, commercial, industrial, and agricultural customers in northern and central California, the United States.
The company’s electricity distribution network consists of approximately 107,200 circuit miles of distribution lines, 59 transmission switching substations, and 605 distribution substations; and electricity transmission network comprises approximately 19,200 circuit miles of interconnected transmission lines and 92 electric transmission substations.
Its natural gas system consists of approximately 42,800 miles of distribution pipelines, approximately 6,400 miles of backbone and local transmission pipelines, and various storage facilities. The company operates various electricity generation facilities, such as nuclear, hydroelectric, fossil fuel-fired, and solar. PG&E Corporation was founded in 1905 and is based in San Francisco, California. – Yahoo Finance