PG&E Suspends Dividends, “Uncertainty Related to Causes” of Bay Area Wildfires. Shares Plunge Further

California utility goes for “cash conservation.” Investors, not just rate payers, to foot the bill. 

Wednesday evening, two sleepy trading days before the long Christmas weekend, when no one was supposed to pay attention, Pacific Gas and Electric, the Northern California utility that is being investigated and sued for allegedly having triggered the wildfires in the Bay Area, “the most destructive and deadliest in our state’s history,” as the Department of Insurance had put it, announced that it would suspend its dividend.

PG&E shares [PCG] plunged 10% in after-hours trading. Thursday morning, shares plummeted 16.5% to $42.75. They’re now down 38% in total since the beginning of the wildfires that killed 43 people and caused still untold property and environmental damage, including $9 billion in insurance claims so far, with the tally likely to rise further. About three dozen lawsuits have been filed against PG&E.

PG&E’s announcement was terse:

On December 20, 2017, the Boards of Directors of PG&E Corporation (the “Corporation”) and its subsidiary, Pacific Gas and Electric Company (the “Utility”), determined to suspend quarterly cash dividends on both the Corporation’s common stock, beginning with the fourth quarter of 2017, and the Utility’s preferred stock, beginning with the three-month period ending January 31, 2018, due to uncertainty related to causes and potential liabilities associated with the extraordinary October 2017 Northern California wildfires.

In the accompanying press release, PG&E said:

No causes have yet been identified for any of the unprecedented wildfires, which continue to be the subject of ongoing investigations.

However, California is one of the only states in the country in which courts have applied inverse condemnation to events caused by utility equipment. This means that if a utility’s equipment is found to have been a substantial cause of the damage in an event such as a wildfire – even if the utility has followed established inspection and safety rules – the utility may still be liable for property damages and attorneys’ fees associated with that event.

The primary suspect is PG&E’s infrastructure and its maintenance. On October 8, when the wildfires started, heavy winds toppled power poles, transformers, and power lines. And there it gets complicated. On October 23, The Mercury News reported:

For the better part of a decade, California’s utilities have helped to stall the state’s effort to map where their power lines present the highest risk for wildfires, an initiative that critics say could have forced PG&E to strengthen power poles and bolster maintenance efforts before this month’s deadly North Bay fires.

A review of the mapping project by the Bay Area News Group shows that utilities have repeatedly asked to slow down the effort and argued as recently as July that, as PG&E put it, certain proposed regulations would “add unnecessary costs to construction and maintenance projects in rural areas.”

Cutting costs and maximizing shareholder value, at its called, for better or worse.

On October 31, as the plot thickened, KQED reported:

Pacific Gas and Electric has informed state regulators of at least eight instances in which trees or tree limbs brought down power lines in the hours when a series of devastating wildfires started in the North Bay earlier this month.

PG&E’s incident reports to the California Public Utilities Commission provide brief accounts of trees toppling in high winds in an area stretching from Potter Valley, in Mendocino County, to the outskirts of Napa late the night of Oct. 8 and early Oct. 9.

The exact location of the incidents is redacted from the documents, released Tuesday by the CPUC. But many of the incidents were located inside or near the perimeters of the wildfires. In most of the reports, PG&E said Cal Fire had taken possession of tree limbs and damaged electrical equipment as part of its investigation into how the wildfires started.

So Wednesday evening, PG&E added in its press release that suspending the dividends “is prudent with respect to cash conservation and is in the best long-term interests of the companies, our customers and our shareholders.”

On November 2, to soothe the frayed nerves of Wall Street after PG&E shares had plunged 25% already, CEO Geisha Williams told analysts that PG&E only carried $800 million in liability insurance for that blaze and that “our costs over and above insurance coverage should be shared by all customers.”

PG&E would seek a rate hike to transfer the costs to ratepayers rather than investors — which state Senator Jerry Hill, echoing the broader sentiment around the Bay Area, called “outrageous” at the time. “Where I draw the line is if it was shown that it was due to their negligence, as was the case in previous tragedies, then ratepayers should not be held liable for PG&E’s negligence.”

PG&E is already trying to get approval to stick ratepayers with the tab for the liabilities in excess of its insurance coverage associated with the Butte fire in September 2015 that ravaged parts of the counties of Amador and Calaveras.

But with the dividend suspension, PG&E has conceded that investors – the beneficiaries of PG&E’s now controversial cost cutting efforts – will pay at least part of PG&E’s liabilities arising from the wildfires.

The report by the California insurance commissioner is based on claims data as of December 1, supplied by over 260 insurance companies. Read… How Much Did the Fires in California Cost? Answers Emerge. 
 

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  77 comments for “PG&E Suspends Dividends, “Uncertainty Related to Causes” of Bay Area Wildfires. Shares Plunge Further

  1. JungleJim
    Dec 21, 2017 at 10:09 am

    I don’t want to sound like a supporter of PG &E, but this strikes me as scapegoating. The damage was the result of a lot of factors beside the wind resistant strength of a few power poles. Among other things the drought turned much of the state into tinder. Add in the high winds and over building and you have a formula for disaster. Under those conditions, even a stray cigarette could lead to disaster.

    • willem
      Dec 21, 2017 at 1:02 pm

      A good point. Recall that there has been a lot of controversy surrounding the forest management practices of the last 10 – 20 years with respect to fires. In nature, frequent wildfires generally burn off the dried out underbrush before it accumulates to levels that can support fires hazardous to larger, older growth.

    • FDR Liberal
      Dec 21, 2017 at 1:31 pm

      JungleJim,

      So wouldn’t it have been prudent to review one’s risks due to the excessive rainfall in California last year, which only contributed to the tinderbox scenario this year? PG&E has historically been a terrible energy vendor for its customers.

      Across the nation there are several states that have three strikes and you go away for life. Per below, PG&E is a serial offender of obfuscation. Since corporations are people too shouldn’t this apply to them IF they are found culpable?

      https://www.justice.gov/usao-ndca/pr/pge-ordered-develop-compliance-and-ethics-program-part-its-sentence-engaging-criminal

      http://www.sfgate.com/business/article/PG-amp-E-settles-poisoning-lawsuit-3289051.php

      • Samurai
        Dec 21, 2017 at 2:52 pm

        Have to love the logic of the 3 strikes and you’re out for corporations being people too! I will reuse this :)

        • Nick
          Dec 24, 2017 at 4:12 pm

          Invoke the corporate death penalty;
          Revoke their corporate charter, break up the company, seize their assets and municipalize their facilities.

          Barring that, send their CEOs and board of directors to prison for manslaughter upon conviction of the corporation.

      • JungleJim
        Dec 21, 2017 at 2:54 pm

        As I said, I didn’t want to end up defending PG & E, but I do feel that they are not the only guilty parties. If you lump all of the blame on them, the other parties including the Legislature and the developers won’t mend their ways. The climate swings mean that the Californians, as a group, will have to be much more proactive about fire prevention.

        • Mactiredeich
          Dec 24, 2017 at 7:37 am

          If PG&E wants its customers to bear the costs, then rate payers should own the “public” utility instead of shareholders and thus share in the benefitsl. If customers, instead of shareholders, had been and would be receiving dividends or lower rates, then sharing the costs of disasters would be much less onerous.

      • Javert Chip
        Dec 21, 2017 at 7:29 pm

        Too bad this doesn’t work for most of government government as well.

    • Patrick
      Dec 21, 2017 at 4:35 pm

      Unfortunately in such a liberal state as California, ‘who’s to blame’ takes a backseat to ‘who’s got the deepest pockets’ with bonus points going to socializing the losses to electricity customers. Sold my PCG this morning as I have a rule against voluntarily allowing any investment to go into the red, despite long-term potential.

    • d
      Dec 21, 2017 at 5:26 pm

      “I don’t want to sound like a supporter of PG &E, but this strikes me as scapegoating. The damage was the result of a lot of factors beside the wind resistant strength of a few power poles.”

      GET REAL

      These utilities have been staving off the cost of bringing their equipment up to required safety standards for Decades.

      The Bonuses to Executive have flowed as a result.

      This is the down side of profit driven Private utilities.

      The have pinched pennies on safety by knowingly contonuing to use substandard Equipment.

      No they are going to pay many pound’s in compensation, or go bankrupt.

      Bankruptcy is what they deserve, as they penny pinched on safety.

      As a result People Died.

      Profits before People, AGAIN..

      • wkevinw
        Dec 22, 2017 at 7:00 am

        Corporations have a responsibility to maximize profits- and that includes over the long term. They are not smart not to plan for issues like disasters such as these fires at PG&E.

        Most for profit utilities were more tightly regulated ~50 years ago- i.e. regulators did not trust them to plan well for these events back then. So, they did a few things- required them to stay within a band of profit margin- can’t make too much, nor too little. Also, they required certain safety activities, e.g. keeping the facilities safe and up to modern specifications.

        The airlines today are similar- though not managed for profit-margin, they are heavily regulated as to how often and what kind of maintenance they have to do.

        This is a failure of government enforcement of regulation – what is sensible regulation? is the critical political question of the day.

  2. BTilles
    Dec 21, 2017 at 10:11 am

    The financial exposures here for the company appear to be twofold. First their $800 million of liability insurance vs the $9 billion published estimate of damage represents an exposure. But their equity layer is about $19 billion. It’s not the eventual write-offs although they don’t help.

    It’s prob. that they will have to spend billions rebuilding their system. But since the utility and its maintenance practices are being blamed for these fires, the state’s Public Utility Commission will be under enormous pressure to deny the utility anything resembling a full recovery of this prospective investment.

    The div. cut is an opening gambit. Basically says “stuff” just got real.

  3. Marty
    Dec 21, 2017 at 10:23 am

    I doubt it’s only the investors. I’m sure the bonuses to employees will be non existent this year and for the foreseeable future. Between the jerk execs who care only about their outrageous compensation and the Socialist republic of CA and their money grubbing ways, the risk of running a utility in the state are too high and can’t be covered by the price of electricity.

    • Jus7me
      Dec 21, 2017 at 11:19 am

      You are 33% right and 67% wrong. Greedy jerk execs , yes. But “Socialism” had nothing to do with it. And the price of electricity in California is among the highest om the nation, at 15.4 c/kWh even with cheap natgas for the last several years.

      • Anon1970
        Dec 21, 2017 at 2:52 pm

        The current retail price for PG&E electricity is 19.979 cents per kwh (tier 1) and then it jumps to 27.612 cents for tier 2 usage. I think there is also a tier 3 level for high users. PG&E customers are still paying off California Department of Water resources bonds from the company’s prior bankruptcy. I suspect a large portion of any future fire related settlement will be borne by the utility’s customers.

        • NoEasyDay
          Dec 21, 2017 at 3:40 pm

          >The current retail price for PG&E electricity is
          >19.979 cents per kwh (tier 1) and then it jumps to
          >27.612 cents for tier 2 usage.

          Are these residential rates?

        • alex in san jose AKA digital Detroit
          Dec 21, 2017 at 5:48 pm

          I’ve paid for electricity in Arizona and California and it’s much more expensive in Arizona.

          For that matter, taxes are higher there and they tax food too.

        • mean chicken
          Dec 21, 2017 at 6:12 pm

          Germany has very high rates as well, perhaps due to regulatory circumstances?

          In my case, taxes service charges and fees compose considerably more than the electricity itself.

        • Justme
          Dec 21, 2017 at 6:30 pm

          @Anon1970, thanks for the correction, my source was

          https://www.eia.gov/electricity/state/

          which had average retail price for California for Dec 2017. But PG&E is only Norcal and average retail probably includes non-residential customers that get lower rates. The 15.4c number sounded low to me, but I thought I could not argue with the official source. My mistake.

        • Anon1970
          Dec 21, 2017 at 8:17 pm

          Are these residential rates? Yes. I read them off of my latest bill. My local government does not have a utility users’ tax but many do.

        • Ian
          Dec 22, 2017 at 9:24 am

          PG&E are ripping off their customers. Unless I’m mistaken the rates in Modoc County are only 8c/kwh. Sum Ting Wong.

    • Petunia
      Dec 21, 2017 at 11:32 am

      Musk to the rescue!

      • Rates
        Dec 21, 2017 at 5:14 pm

        A Ponzi schemer coming to the rescue of a Ponzi state certainly has a charm to it.

    • Michael Fiorillo
      Dec 21, 2017 at 1:32 pm

      Yeah, those lousy “socialists” in California, who are so busy turning the public schools over to private charter school operators…

      • Marty
        Dec 21, 2017 at 11:43 pm

        Yes, socialist. It’s the fascist form of socialism, when crony private operators team up with corrupt govt, like charter schools which are in fact still govt schools.

        • Michael Fiorillo
          Dec 22, 2017 at 6:02 am

          There’s so much you don’t know about this… but never mind.

  4. unit472
    Dec 21, 2017 at 10:30 am

    I noticed there were widespread power outages when the fires broke out in Southern California though only a few seem to have been caused by the fires. It maybe that utilities will now shut off power lines when winds are forecast to be above some threshold.

    Utilities managing their risk by shutting off power during storms or high wind events is sure to have a cumulative economic impact greater than the damage inflicted by the wildfires but, unless rate payers are willing to bear the cost of putting transmission lines underground what alternative do the utilities have?

  5. Matt P
    Dec 21, 2017 at 10:54 am

    Still don’t know why we don’t bury our power lines like they do in most developed countries. Oh yeah, profit, that’s why. Good ol’ capitalism working for us.

    • marty
      Dec 21, 2017 at 11:01 am

      i’m told it’s due to earthquakes.

      • d
        Dec 21, 2017 at 5:30 pm

        Thats BS

        • I M
          Dec 22, 2017 at 5:28 am

          Earthquakes are a major factor.

          Shifting ground + buried transmission lines = time consuming and expensive repairs

          If an earthquake severed or damaged underground trunks such that power was lost to a major metro area for a week or more while the line is excavated and replaced, the ensuing outrage would be focused upon why transmission lines in earthquake zones aren’t on steel earthquake-resistant poles.

        • d
          Dec 22, 2017 at 5:40 am

          We have more earthquakes than CA.

          We have underground main supply line’s, that have been underground that long, that they are now failing, of OLD AGE.

          We also have something else CA and America dosent have. A National Electricity Distribution grid, that is treated as a national asset and an item of national security.

          America is supposed to be so advanced. When you look deeply into it, a lot of it, is very “Third World.”

        • d
          Dec 22, 2017 at 5:42 am

          Further, there is no such thing, as an “Earthquake Resistant” Steel Pole.

        • Dec 22, 2017 at 9:13 am

          On quite a few streets in San Francisco, which is prone to earthquakes, electrical cables and transformers are underground, especially in the expensive neighborhoods.

        • d
          Dec 22, 2017 at 2:13 pm

          They worked out how to do this efficiently in WW I.

          When they needed to run underground telephone cables, and stop them being broken by Violent ground shift, due to heavy (18″ 20″ ) shelling. It was found early on, that very few lines were actually broken, as the result, of a “Direct hit”.

          Many Rapid advances are made in Big Wars. Sadly for very unpleasant reason’s. Nothing like Violent confrontation and stress, to activate the group’s mind’s, and drive “The Group” to cooperation.

        • I M
          Dec 23, 2017 at 10:49 am

          d,
          The type of earthquake fault zone, distance from the fault and whether the HV transmission lines bridge the fault or run parallel are the differences between night and day, or in this case, the difference between a valid argument and a statement such as: “well, we have more earthquakes than CA and we have underground mains… ” (to which country do you refer?) The major CA faults are largely strike-slip causing lateral shifts of inches to many feet. These maps shows how many primary power transmission paths bisect major CA fault zones to either bring power from a coastal facility inland or from inland generation to large coastal cities:
          http://www.energy.ca.gov/maps/infrastructure/transmission_lines.html
          http://www.energy.ca.gov/maps/powerplants/power_plant_statewide.html
          http://maps.conservation.ca.gov/cgs/fam/

          The argument concerns large capacity power transmission, not local distribution. I suspect you don’t understand the difference between >100KV transmission and sub-100KV post step-down distribution, metro and household lines with regard to cabling and equipment. See my other post, repeated below. This might explain your generalized statements and claims made.

          ‘d’ said: “Further, there is no such thing, as an “Earthquake Resistant” Steel Pole.”

          I made no such claim. My statement was mocking the theoretical kneejerk public/media/forum outcry following any prolonged power outage if an underground transmission line was damaged by earthquake.

          There are examples where buried power distribution has experienced significant damage and distruption during seismic events while the overhead lines suffered little damage. The 2011 Christchurch earthquake is such an example in which it was also necessary to install “temporary” overhead lines until the underground 66KV line could be replaced. However, you won’t find many examples of underground HV DC transmission lines being severed by strike-slip faults because no one is foolish enough to bridge an active SS fault with large buried cable.

          Wolf,

          Sorry, but your point is moot. Low voltage local distribution is nothing like long distance power transmission. See my other post repeated below. It’s a no-brainer that most sub 30KV distribution and all metro and household lines should be underground, even in earthquake prone areas. However, since the cost of installation and cabling is so high and underground cables are not easily uprated to meet increased demand, it is necessary to future-proof by installing the highest rated cables initially. Overdesigning for demand in a metropolitan city is actually easier than estimating demand in unincorporated/undeveloped areas where there is little justification for the massive upfront cost. Also, to my knowledge there are no faults running directly through San Francisco, so the scenario I’m posing is not applicable.

          I will reiterate my other post here since it is related:

          There are technical and economic reasons why high voltage transmission lines cannot be buried. Capacitive effects limit transmission capacity and cable length as well as introduce costs associated with thicker lines needed to overcome losses and transmit power equivalent to overhead lines. To overcome these effects long distance power transmission must be converted to HV DC. Lower voltage distribution, metro and household main AC are less impacted by these effects so these are often buried.

        • Dec 23, 2017 at 11:00 am

          I don’t think the fires were caused by high-voltage transmission lines. The allegations are that the fires were caused by local distribution lines and transformers.

        • d
          Dec 23, 2017 at 3:47 pm

          “The 2011 Christchurch earthquake is such an example in which it was also necessary to install “temporary” overhead lines until the underground 66KV line could be replaced.”

          The CH CH events were toy’s compared to the recent Kaikoura Wgnt triple which moved some sections Meter’s, Horizontally, and Vertically. In that event an entire 500Km + mountain range moved Horizontally, and Vertically, The event was noticeably felt 1400 Kms away. In that Kaikoura Wgtn Event, no Underground lines were damaged. lots of overhead were.

          The CH CH Fault was an unknown Fault, so the under ground in CH CH was not fully specked for major Events.

          I would know anything about underground power lines. As I only successfully contracted, to replace some. You dont need to know about them to do that do you????

          There are down sides to both systems, underground is safer.

          Which comes First? People’s safety, or profit??

    • marty
      Dec 21, 2017 at 11:03 am

      And capitalism does work, but we don’t have that. How can you call a regulated utility capitalism? That’s fascism.

      • TJ Martin
        Dec 21, 2017 at 11:24 am

        Actually marty … restrained responsible capitalism works … whereas the unrestrained verging on anachro capitalism we are becoming … does not .

        Because … if it were not for regulated utilities … can you say … multiply your current energy bills by a factor of ten ?

        And … how can you complain about regulated utilities when in reality every aspect of your life from the gas you use to the food you eat is both regulated and subsidized by the US tax payer and government .

        Cause if they weren’t .. can you say .. $35+ for gallon of gas and ahhh … $45+ for a gallon of milk ?

        Time to get your head out of the neo-populist abyss and come to grips with reality .. before there is no reality left to come to grips with

        And trust me marty .. you don’t have a clue what genuine fascism looks like … though if things proceed on their current trajectory … you just might .

        • I M
          Dec 22, 2017 at 5:38 am

          “Because … if it were not for regulated utilities … can you say … multiply your current energy bills by a factor of ten ?”

          Not true.
          I own properties in multiple states, including one state that regulates electricity with an iron fist and one that lets the power companies get away with murder. The difference per KWh between those two states is 0-2 cents over the last decade.

          BTW- I use this same fact to shut down the people that argue we’d be paying a penny per KWh if we just deregulated everything.

    • Alistair McLaughlin
      Dec 21, 2017 at 11:32 am

      Above-ground lines cost around $10 per foot. Below ground lines cost from $20 to $40 per foot. In urban areas, that cost can skyrocket much higher. Imagine what your electricity bill would look like then.

      • unit472
        Dec 21, 2017 at 12:42 pm

        Then again, subterranean electrical vaults are not immune to fires as witness the power outage at Hartsfield airport the other day.

      • Scott
        Dec 21, 2017 at 2:31 pm

        I used to work with someone who lived in a neighborhood that had underground electric lines, because of faulty installation, they lost power practically everytime that it rained. And he lives in a town that has municipal power plant.

    • BTilles
      Dec 21, 2017 at 12:41 pm

      The traditional industry response which I don’t doubt is that it’s more costly to install and repair.

    • Javert Chip
      Dec 21, 2017 at 7:34 pm

      Matt P

      Actually, CA Gov Brown vetoed a bill to start doing exactly what you suggested…had nothing to do with “good ‘ole capitalism”.

    • Nick Kelly
      Dec 21, 2017 at 11:38 pm

      High voltage lines buried?
      Not in Canada in the parts I’ve been (mostly west)
      The underground stuff is local in the newer subdivisions and is not high voltage.

    • I M
      Dec 22, 2017 at 5:18 am

      There are technical and economic reasons why high voltage transmission lines cannot be buried. Capacitive effects limit transmission capacity and cable length as well as introduce costs associated with thicker lines needed to overcome losses and transmit power equivalent to overhead lines. To overcome these effects long distance power transmission must be converted to HV DC. Lower voltage distribution and household mains are less impacted by these effects so these are often buried.

    • RagnarD
      Dec 22, 2017 at 12:25 pm

      Regulated utility.

      How do u think they make a profit? If a project costs $100MM they make a regulated return of X% on that amount over time. Do u think the utility would not want to make a return of X% on $1B if that’s what it costs to put the power lines under ground?

      Or Do you prefer a Simple dictatorship, where the government simply dictates what’s going to be built and then extracts the cost from the population, like in the USSR?

      Or do u have a “third way” as to how this can be done?

  6. Old Engineer
    Dec 21, 2017 at 11:05 am

    We all know, based on history, that money to pay for any liabilities (beyond what can be wrung from the insurance companies) will come from PG&E customers. A 10% to 20% “temporary” rate increase will be used to pay off any liability judgements that can be gained in court. All of this is just setting the stage for the negotiations to get the rate hikes. Any losses the investors see are likely to be only nominal.

    • BTilles
      Dec 21, 2017 at 2:17 pm

      I believe those “nominal” shareholder losses now approximate a 40% decline in stock value (granted perhaps temporary) and a loss of dividends.

  7. Hirsute
    Dec 21, 2017 at 11:47 am

    Suspend the dividend!? Even the shoe shine boys know all you got to do is a shelf registration and *poof* magic cheap money appears to announce a stock buyback and pay lawyers, the settlement AND dividends. This Christmas should not be about bah humbug – it should be our rejoicing at our financial savior – The Fed. We are all saved!

    • Dec 21, 2017 at 1:29 pm

      PG&E went bankrupt in 2001 and emerged in 2004. That wasn’t that long ago. Hopefully, there’s a little institutional memory left at the top.

      • cdr
        Dec 21, 2017 at 2:01 pm

        “Hopefully, there’s a little institutional memory left at the top.”

        You forgot the smiley face. Personally, I think they might start giving away ‘Save the Whales” stickers as a distraction in hope the loonies can be convinced no maintenance is environmentally fantastic in support of ending global warming.

        A few years ago in IL we had a wind storm that knocked out electricity for days for most of the north eastern part of the state. ComEd had neglected maintenance, causing the major outage. I, personally, bought a home generator (14k) because my electricity went out 9 times in 2 years previously. ComEd got with the program and fixed itself. It’s reliable again and I have a generator that’s a conversation piece.

        My impression of CA …. best wishes.

      • BTilles
        Dec 21, 2017 at 2:25 pm

        My guess is that this is a financial “performance” for a rather intimate audience of two: Moody’s and S&P.
        As a result the rating agencies prob. won’t bother them for awhile now that they’ve cut the stock dividends. This buys them time.

        • Dec 21, 2017 at 8:43 pm

          Agree. It does buy them time.

      • Hirsute
        Dec 21, 2017 at 2:55 pm

        Bankruptcy? What is that? They “emerged,” no? Crony capitalism. So the equity holders may or may not have been wiped out. It’s Corporate America. All sins are forgiven and poor managers are always resurrected to destroy more value again.

        • Javert Chip
          Dec 21, 2017 at 7:38 pm

          You have demonstrated a “special” grip on financial reality

      • alex in san jose AKA digital Detroit
        Dec 21, 2017 at 5:50 pm

        What needs to happen with PG&E is individual people need to be traced, who is actually responsible, and they need to get long federal prison sentences.

        • Dec 21, 2017 at 9:02 pm

          “Individual people” like the CEO and CFO?

        • d
          Dec 21, 2017 at 9:59 pm

          “What needs to happen with PG&E is individual people need to be traced, who is actually responsible, and they need to get long federal prison sentences.”

          ???

          Have you been smoking those funny cigarettes, taking or drinking something mind altering ?????

        • RagnarD
          Dec 22, 2017 at 1:12 pm

          And we need to trace all the people who have exacerbated The likelihood that this tinderbox would one day inflame. Namely everyone who lives and breathes in that area of California.

          Was it not apparent that this place was / is a tinderbox? I was there in summer 2016 and saw fires then and wasn’t surprised in the least.

          Sure PG&E was probably negligent. But they r just a slow moving (easy target) cash cow.

          One could also blame the environmental regulations / green power initiatives that have jacked the cost of power in the state and thus decreased funds available for maintenance.

          Just hypothesizing on different tangents one could take.

  8. c smith
    Dec 21, 2017 at 11:57 am

    Are CA ratepayers willing to push PCG into bankruptcy? Equity value is down $13 Billion (37%) since the fires. Macondo disaster for BP may be a good analog here. Initial declines in BP shares in May and June of 2010 overdiscounted (eventual) liabilities by 25% to 30%. Key differences were that BP is not a public utility, per se, and the environmental damages in Macondo case became a political football and therefore way harder to quantify. Fire damages will end up a much more definable, finite number.

  9. tony
    Dec 21, 2017 at 12:44 pm

    If they do find them guilty which i doubt they will just get a rate increase to pay for it. What’s right is right.I think another $1.00 tax on gas would solve the problem.

  10. Dec 21, 2017 at 1:10 pm

    SDGE lost its lawsuit over fires in the back country and now whenever the wind comes up they cut power to those in the East county.

    • NoEasyDay
      Dec 21, 2017 at 3:52 pm

      This is likely a smart move. FWIW, fleeing a wind-driven firestorm in a hurry is no laughing matter.

  11. Big Larry
    Dec 21, 2017 at 1:27 pm

    It’s a tough environment to operate a utility in. Even if they are found to have done the proper maintenance and inspections, California has a law called inverse condemnation which could potentially leave PG&E on the hook for the whole tab.

    My gut tells me this is an incorrect practice, wind and drought (global warming) are the culprits here. PG&E is the top utility for renewable energy battling the effects of global warming.

  12. Mike G
    Dec 21, 2017 at 1:57 pm

    CEO Geisha Williams told analysts that PG&E only carried $800 million in liability insurance for that blaze and that “our costs over and above insurance coverage should be shared by all customers.”

    Sorry I crashed into your car because I couldn’t be bothered maintaining my brakes, Geisha. But I only carry $800 in liability insurance, so any costs over and above that should be shared by you.

    • RagnarD
      Dec 22, 2017 at 1:16 pm

      Go crawling under all the possible liability rocks and comeback and tell us how well covered all the other potentially liable entities are for tinder box wildfire events.

  13. IdahoPotato
    Dec 21, 2017 at 2:29 pm

    Their investors will be thrilled if they rename themselves PG&B (Blockchain).

    https://www.bloomberg.com/news/articles/2017-12-21/crypto-craze-sees-long-island-iced-tea-rename-as-long-blockchain

  14. Stan
    Dec 21, 2017 at 2:35 pm

    Of course, some of these fires are caused by Pyroterrorism. The U.S. Forest Service had a conference on pyroterrorism a few years ago. Google it.

  15. Drater
    Dec 21, 2017 at 3:30 pm

    Should Mayor Garcetti be held liable for the Skirball fire since he promotes/embraces homelessness in LA?

  16. William Smith
    Dec 21, 2017 at 5:33 pm

    Each of you that has an electricity (so-called) “smartmeter” on their house wall has an incendiary device just waiting to go off. They have a well documented history of catching fire. Just google about smartmeter fires. There is plenty of stuff on youtube as well. These new electronic devices are far less rugged to the elements than the older units are. I am wondering just how many of the fires were caused by the power meter suddenly catching fire in hot conditions. The power companies are pushing these evil spying devices on innocent citizens because they can monetize the “thin stream” of data provided on exactly what devices the householder is using, and exactly when they are using them. There is an analytics company in the UK that provides AI software which can accurately determine such data, and marketers love it. The old meters were designed to be rugged, operate reliably in extremes of temperature and last well over 40 years. These new abominations are using off the shelf electronic components (which cannot handle temperature extremes) and thus need replacing every 5 to 7 years (as most of your modern electronics does): and the customer pays for this on his bill and on his home insurance premiums (due to burned down house). When the insurance companies finally wake up to this massive future liability inflicted upon them by the power companies, just watch what happens if you want to also be insured for house fires. I am very glad that the investors are getting shafted as they are also culpable for the evil of the company they have invested in.

  17. mean chicken
    Dec 21, 2017 at 5:50 pm

    ” California is one of the only states in the country in which courts have applied inverse condemnation to events caused by utility equipment.”

    I’ve also read claims that nuclear power plants are insured by the Federal Government but seriously, what are their liabilities if SHTF, I’m guessing none?

  18. sinbad
    Dec 21, 2017 at 6:16 pm

    Faulty power poles have caused numerous fires in Australia, and the power companies are now required to constantly monitor and remove vegetation from around the power lines.
    Surely removing such risks is just prudent business practice?

    • Mike G
      Dec 21, 2017 at 11:33 pm

      When regulatory capture means they can fob off resulting losses on the public, there is little risk that they have to care about: “…our costs over and above insurance coverage should be shared by all customers.”

  19. Paulo
    Dec 21, 2017 at 7:56 pm

    You could always buy our excess power produced in BC. I pay $.07 tier one at residential rate. Then resell and make huuuuge profit.

    Oh…righttt. You did this before right after privatization produced a lack of generation capacity and then sued us when you thought the bill was too high.

    California expects a billion dollar settlement. hmmm probably skip this future customer. Oh well, it’s just renewable hydro. It’ll store just fine behind the dams.

    Quote from our current Premier.
    “California deregulated their energy market, found they had no energy, and the people of British Columbia provided that energy at the cost that the market was prepared to pay at that time. It was unfortunate for them. It was fortunate for us,” he said.

    “Whether it be with softwood lumber or energy, whenever our American trading partners don’t like what we’re doing they go to court.”

    article link:
    http://www.vancouversun.com/business/judge+rules+against+Hydro+billion+dollar+California+energy+dispute+with+video/7996973/story.html

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