PG&E Stocks Drop Amid Suspisions That It Started California’s Deadliest Fire
The Pacific Gas and Electric Company, abbreviated as PG&E, is currently in the crosshairs after reports of the company’s continued delays in safety and maintenance work on a one-hundred-year-old high-voltage transmission line being the cause of California’s deadliest wildfire to date surfaced.
The reputable but now infamous company has been northern and southern California’s supplier of electricity and natural gas, with as many as 16 million customers and an employee workforce of about 24,000 workers.
As early as 2013, the company, upon the inquisition of regulators concerning the Caribou-Palermo line, stated its intention of replacing much of the line’s infrastructure, paying extra attention to its towers and wires. However, according to the WSJ (Wall Street Journal), the electric and gas company postponed the commencement of this project consecutively to 2014, 2015, and 2016.
In 2017, the company set aside $30.3 million intended for the elimination of identified clearance issues along the Caribou-Palermo. This was to be done the following year, even though the problems had been brought to their attention several years ago.
However, recent reports show that work on the line had been scheduled for June 2018 with its completion date set by the end of the year. Unsurprisingly and given the company’s trend in missing deadlines, the safety work is yet to begin, a couple of months into 2019.
As is most often the case when a company faces a crisis, PG&E’s shares which were up before the reports came to light traded down 3.8%. This is terrible news for the utility giant, seeing as its stock registered a 52% crash following the filing-for-bankruptcy announcement to shield itself from the wildfire liability.
State officials are understandably concerned about the company’s electric distribution system, seeing as the 2017 and its faulty equipment allegedly started 2018 California wildfires.
$30 billion liability
The utility company faces potential liability costs to the billions, with sources estimating that the figure may be as high as $30 billion. As at now, investigators have directly linked the company’s faulty equipment to 17 catastrophic wildfires in 2017. Concerning the 2018 November Camp Fire, they are yet to conclude their investigations.
The fire led to the loss of at least 86 lives, in addition to turning 14,000 homes into ashes, making it California’s deadliest wildfire. It broke out on the fateful November 8 morning near Paradise, Northern California’s mountain community. The company has reportedly admitted to having equipment problems on the line in question at around the time the fire broke out.
Despite the turmoil it is currently in, PG&E has maintained its position on the intention to continue working as it has always done, providing energy to the people of California, even as it figures out the appropriate steps to take to save face.
The utility is also in court, seeking approval for debtor-in-possession financing to the tune of $5.5 billion. The target financial institutions are Bank of America, J.P Morgan, Citi, Barclays, and others.
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