California clears PG&E for 2017 Tubbs Fire, shares soar
- by Rex Christensen
- in Economy
- — Jan 27, 2019
Proposals by a US judge to prevent Pacific Gas & Electric Co. equipment from causing more wildfires would endanger lives, could cost as much as $150 billion and would interfere with the work of federal and state regulators, the utility said Wednesday in a court filing urging the judge not to impose the measures.
After concluding its investigation, Cal Fire, the state's fire-prevention agency, said in a statement that the Tubbs fire "was caused by a private electrical system adjacent to a residential structure" and that investigators didn't identify any violations of law.
PG&E stock, which had plummeted since the November Camp Fire, shot up within minutes of the announcement, and closed at $13.95 a share, almost doubling Thursday.
Northern California's major electricity and natural gas provider says it's still in deep trouble despite being cleared of causing a 2017 wine country fire that killed 22 people.
The utility still faces billions of dollars in potential damages from other wildfires , including a blaze a year ago that killed at least 86 people and became the nation's deadliest in a century.
PG&E's chief executive recently resigned and Chairman Richard Kelly said the company is committed to "further change" and searching for a new leader with "extensive operational and safety expertise" while its general counsel helms operations on an interim basis.
The fire was one of more than 170 fires that torched the state in October 2017.
Today's Cal Fire finding may also play a role in next week's hearing scheduled before the federal district court judge overseeing PG&E's criminal probation for its role in causing the deadly 2010 San Bruno pipeline explosion.
PG&E is facing liabilities that could potentially exceed $30 billion because of the possibility that its equipment was involved in starting the devastating wildfires in the state in 2017 and 2018. The company still faces billions of dollars in potential damages from other wildfires.
The board's "intention to file a voluntary, costly, and unnecessary bankruptcy.in our view, violates their fiduciary duties to the company and to you", the hedge fund said in its letter.
"If it was marginally insolvent before, and there was a question about that.it's certainly clear now that they are solvent", Danko said.
No determination has been made regarding the cause of the Camp Fire. PG&E officials have told state regulators that the utility was having trouble with its lines close to where the fire began on the morning of November 8; utility workers spotted smoke before flames swept through the town of Paradise. Using a regulator's classification of Zink's residence as an "incident location", PG&E pointed to a "service riser" on her house "after the point at which PG&E had legal responsibility for operation, inspection, and maintenance" of the suspected electrical equipment. The report could also hamper lawsuits by victims of the blaze.
Tubbs accounted for about 60 percent of the total structural damage from the 2017 wildfires, according to a report by J.P. Morgan Securities.
"I don't think this removes the bankruptcy scenario", Miller said.
"The bottom line is the Cal Fire report finds "an unknown event" as the cause of the fire", Miller said. The cause remains under investigation, but speculation has centered on PG&E after the utility reported power line problems nearby around the time it began. It hasn't offered a breakdown on the potential costs from the Tubbs Fire. Because of the lingering questions raised by Cal Fire's findings, he's not sure they have that yet.
