California Utilities Plummet on Wildfire Fears
November 12 2018 - 1:49PM
Dow Jones News
By Katherine Blunt
Shares of two of California's largest utilities plunged Monday
as concerns escalated that the companies could face billions of
dollars in potential liabilities as a result of the state's latest
devastating wildfires.
PG&E Corp.'s stock price was down about 16% in midday
trading after falling as much as 37% earlier in the day. Shares in
Edison International, which owns Southern California Edison, were
down about 10% after falling more than 20% earlier Monday.
Both utilities' share prices began plunging late last week as
wildfires in northern and southern California left thousands of
customers without electricity and gas. The fires have killed more
than 30 people and burned more than 6,000 homes.
Analysts said the selloff reflected investor concerns about the
companies' exposure to fire-related damages, which were already a
major source of risk for the companies after deadly blazes last
year, some sparked by utility equipment, led to lawsuits. The
causes of the current fires, now spreading in Northern California
about 100 miles north of Sacramento, and in Southern California in
Ventura County northwest of Los Angeles, haven't been
determined.
State lawmakers earlier this year passed a measure that would
allow utilities to raise rates to cover liability costs after
analysts, lawmakers and others raised concerns that the costs could
force PG&E, the state's largest utility, to seek bankruptcy
protection.
The legislation, however, doesn't allow for the recovery of
costs related to wildfires occurring this year.
California investigators earlier this year determined that
equipment from PG&E's Pacific Gas & Electric Co. unit
caused 16 of last year's fires. The company in the second quarter
booked a $2.5 billion charge related to wildfire claims, and
analysts project the company could face billions more in
liabilities.
PG&E supplies energy to about 16 million people in northern
and central California. The company said in a statement Friday that
about 25,000 of its customers were without power and 12,000 were
without gas as a result of the Camp Fire near Chico.
PG&E last week warned that it might proactively shut off
power in nine Northern California counties, though it decided those
measures weren't warranted.
Southern California Edison said on its website that the Woolsey
fire near Los Angeles had damaged some of its infrastructure and
left about 9,500 customers without power as of Sunday night.
(END) Dow Jones Newswires
November 12, 2018 13:34 ET (18:34 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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