California utility hit 15-year low earlier in wake of devastating wildfire
Shares of PG&E Corp. surged more than 40% in after-hours trading Thursday after a state regulator said he had no interest in seeing the California utility declare bankruptcy.
“It’s not good policy to have utilities unable to finance the services and infrastructure the state of California needs,” state Public Utilities Commission President Michael Picker told Bloomberg News. “They have to have stability and economic support to get the dollars they need right now.”
PG&E PCG, +35.79% tumbled 31% in regular trading Thursday, hitting a 15-year low on fears of massive liabilities if it is found responsible for the Camp Fire, the deadliest and most destructive wildfire in California history. The company, owner of Pacific Gas & Electric Co., said Tuesday that some of its equipment appeared to malfunction just before the fire started last week. An investigation is under way, and will likely last months. PG&E shares have dropped 61% in the past five days.
But after the Bloomberg report was published late Thursday, PG&E shares jumped 44% in the extended session. Edison International EIX, -12.40% , which owns Southern California Edison, rose as well, finishing after-hours trading up 12%, after dropping 12% in the regular session. It’s still down more then 30% over the past five days.
Separately Thursday, the California PUC said it was expanding its investigation into PG&E’s safety practices, and suggested it could force the company to restructure.
“I will open a new phase examining the corporate governance, structure, and operation of PG&E, including in light of the recent wildfires, to determine the best path forward for Northern Californians to receive safe electrical and gas service in the future,” Picker said in a statement.
Picker said options include breaking up the utility. “We will put all these things on the table,” he told the Wall Street Journal.
PG&E’s bonds have plummeted this week as well, and on Thursday, Morgan Stanley downgraded PG&E stock to the equivalent of neutral, and reduced its price target. Moody’s also cut PG&E’s credit rating to a near-junk level late Thursday.
As of Thursday evening, the Camp Fire’s death toll stood at 63, while the number of missing rose sharply to more than 600. The fire, which is about 40% contained, has burned more than 140,000 acres, and destroyed more than 10,000 structures, most of them homes.
