Shares of PG&E tumbled as much as 15% Thursday after the utility revealed that it expects wildfire costs to top $6 billion for the year.
The disclosure came as PG&E reported results for their third quarter, which included last month’s outbreak of the Kincade Fire in Sonoma County. No one was killed in the Kincade Fire, the largest blaze in California this year.
PG&E previously reported that a 230-kiloVolt transmission line near the reported origin point of the Kincade Fire suffered an outage seven minutes before it ignited.
“PG&E Corporation and the Utility believe it is reasonably possible that they will incur a loss in connection with the 2019 Kincade fire,” the company told the U.S. Securities and Exchange Commission in its regulatory filing Thursday.
The company is also experiencing blowback from a series of power shutoffs aimed at reducing the risk that its equipment sparks a catastrophic wildfire like last year’s Camp Fire, which was caused by the utility’s transmission lines.
In its filing Thursday, PG&E said the shutoffs that began on October 9 were the “subject of significant criticism, including from the California Governor and the CPUC,” its state regulator.
After initially resisting Gov. Gavin Newsom’s calls for the utility to provide $100 credits to residential customers and $250 credits to small businesses impacted, the company capitulated last month.
Thursday, the company said the credits would result in a charge amounting to about $90 million in the next quarter.
A Volatile Few Years
The filing marks the latest twist in a rocky period for PG&E shares. The stock touched a multi-decade low early last week, dropping to about $3.50 a share, but had more than doubled within days.
With the company in bankruptcy since January, and rival groups of hedge funds duking it out over PG&E’s future, shareholders have become a frequent target of public officials and other critics of the utility.
But shareholders include many PG&E workers. Tom Dalzell, business manager for International Brotherhood of Electrical Workers 1245, says many members have significant holdings in the utility’s stock.
Some of those workers experienced the highs and lows of PG&E’s first stint in Chapter 11 bankruptcy protection in 2001.
“There may have been an expectation that bankruptcy is business as usual and won’t have a drastic effect on the stock,” Dalzell said. “This time it’s not that simple at all.”
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