PG&E Corp (NYSE: PCG)
The financial outlook of the Pacific Gas & Electric Corp. received a boost on Thursday after the California Department of Forestry and Fire Protection cleared the utility of responsibility for one massive wildfire that torched the Northern part of the state in 2017.
According to a statement released by the fire investigators, PG&E equipment was not blame for blaze that took the lives of 22 people. The fire destroyed entire neighborhoods and burned 36,807 acres in Santa Rosa, forcing the city and hundreds of residents to sue the company in connection with the wildfire. PG&E stock lost nearly 90% of its value in the wake of the destruction.
Some legal experts say the news isn’t likely to prevent the utility from proceeding with its planned bankruptcy, but others believe it can still ditch the plan. BlueMountain Capital issued a statement saying, “The news from Cal Fire that PG&E did not cause the devastating 2017 Tubbs fire is yet another example of why the company shouldn’t be rushing to file for bankruptcy, which would be totally unnecessary and bad for all stakeholders,”
For its part PG&E warned it still faces untold liability costs, though it did not say whether it would go ahead with its bankruptcy plans. “Cal Fire has completed its investigation of the 2017 Tubbs Fire and concluded that PG&E facilities did not cause the fire,” the utility said in a statement.
“Regardless of today’s announcement, PG&E still faces extensive litigation, significant potential liabilities and a deteriorating financial situation, which was further impaired by the recent credit agency downgrades to below investment grade.”
PG&E shares rallied 75% to $13.95 in the final hour of regular trading on Thursday following Cal Fire’s press release. The stock, which has been in a free fall in recent months, fell 8.4% to $12.78 in post-market hours. As of 9:47 a.m. on Friday, the shares were down 10.47% to $12.49.
PG&E Corp. Profile
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