PG&E Sinks as Wall Street Weighs 'Posturing' Around Bankruptcy

Following the deadly and destructive Camp Fire an aerial view of the Northern California town of Paradise is seen on Nov. 15 2018

National Public Radio, citing an anonymous company official and a former employee, reported that PG&E is exploring selling off its natural gas division - a major part of the company - to set up a fund for potential wildfire claims.

In November, California Assemblyman Chris Holden said a bill would be introduced in January to help PG&E absorb potential liabilities from the latest wildfires.

State Senator Jerry Hill, an outspoken PG&E critic, said the utility previously raised the possibility of a bankruptcy filing as leverage when seeking state assistance in paying its wildfire liabilities.

The California wildfires that scorched millions of acres across the Golden State in late 2018 caused widespread devastation, with loss of human life and property damage just some of the ways that the fires touched the lives of thousands of Californians.

Shares were down more than 18% early Monday.

The utility could be faced with billions of dollars of liabilities from fatal blazes in 2018 and 2017. The company could receive financial help through legislation that would let it pass on to customers costs associated with fire liabilities, the sources said. "We recognize the need to balance the interests of many stakeholders while maintaining safe, reliable and affordable services for our customers, which is always our top priority", the company said in a statement.

PG&E shares have plunged almost 50% since November 8, when the deadliest and most destructive wildfire in California history broke out. The sale could also take place outside a bankruptcy process, the same source said. But the insurance companies note in their lawsuits that flames ignited near the site of a transmission-line irregularity reported by the utility.

FILE - Firefighter Jose Corona sprays water as flames from the Camp Fire consume a home in Magalia, California, Nov. 9, 2018.

"The board is actively assessing PG&E's operations, finances, management, structure, and governance", the company said.

Reuters reported a year ago that the company was working with bankruptcy advisors.

Under California law, PG&E is held entirely liable if lawyers can prove the fire is linked to the utility's power lines or other equipment, a fact that sent shares of the company tumbling following the start of the fire.

The California Public Utilities Commission last month opened proceedings to consider penalties against the company for falsifying pipeline safety records. It had amassed too much debt by buying electricity, which it was then not allowed to recoup by increasing rates for its customers.



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