PG & E stock falls 21% on rumors of bankruptcy

PG & E (PCG) may have to pay tens of billions of dollars for its potential role in the devastating fire of Camp Fire in California last year – the deadliest and most destructive forest fire from the history of the state. The company said it did not have the money or assets to pay anything of that amount.

The utility, which supplies electricity to about 16 million Californians, is considering filing for bankruptcy protection, reports Reuters. The stock fell 21% Monday at noon.

According to state fire officials, the cause of the campfire is still under investigation. But PG & E suggested that it could be responsible. In a report released last month by PG & E, the company explained how its employees discovered damaged power towers a few minutes before the camp fire. An employee called 911 the day the fire broke out after spotting the flames near a high-voltage tower in Butte County – 15 minutes after commissioning a line near this place.

Neglect and poor maintenance of its electrical infrastructure. Another lawsuit describes camp fire as an "unavoidable by-product of deliberate and conscious disregard for public safety by PG & E."

PG & E did not immediately respond to a request for comment

Last week, the state's insurance commissioner reported insured losses of $ 9 billion resulting from fires from Forest of 2018.

PG & E's total liability could be more than $ 26.5 billion, according to Hugh Wynne, Co-Director of Utilities, Energy Equipment and Renewable Energy at SSR. Wall Street analysts expect the company to be responsible for up to $ 30 billion. The total market value of the utility is now less than $ 15 billion and PG & E has only $ 3.5 billion in cash after borrowing from an existing revolving line of credit.

A new law signed by California Governor Jerry Brown last year, requires the commission to consider the finances of a public service when assessing the damage caused by fires. forest, to determine the maximum amount that it can pay without harming customers. PG & E will be able to issue bonds backed by surcharges from its customers. These bonds will help repair the damage associated with deadly California forest fires from October 2017 caused by defective PG & E equipment.

The bill allows utilities to issue similar bonds for future fires, but this is not guaranteed.