Home / U.S. / The California regulator suggests that PG & E will not go bankrupt

The California regulator suggests that PG & E will not go bankrupt

The fire, which was blamed for the death of 63 people, started early on the 8th of November. The cause of fire can not yet be determined. But at the beginning of the week, PG & E (PCG) announced in a regulatory announcement that it was "broken" only on a transmission line just 15 minutes before the camp fire broke out.
This news has reduced stock by more than 60% over the past few weeks, as investors were concerned that the utility did not have any financial resources to cover fire related legal obligations.

Lawyers representing the victims of the fire have already filed a lawsuit against PG & E against two classes.

But the stock grew by 50% on Friday morning after President of the California Public Service Commission (CPUC) suggested that the state cooperate with PG & E to ensure that the lawsuit was not permanently endangered.

"One of the key elements of securing safe electrical services is the financial means for implementing security measures," said Michael Picker CPUC president.

Picker added that as a result of a new law signed by California Governor Jerry Brown last year, CPUC should now investigate its public utilities when it determines the maximum amount it has paid without damaging customers in the assessment of the damage caused by the fire.

As part of the bill that Brown has signed an invoice, PG & E will be able to issue bonds with subsidies to its customers. These are bonds help pay for the deaths caused by fatal California fires in October 2017 caused by faulty PG & E equipment.

The bill allows the possibility of utilities releasing similar bonds for future fires, but this is not guaranteed.

In a separate interview with Bloomberg on Thursday Thursday, Picker said, "It is not a good policy that utilities can not finance the services and infrastructures provided by the California State, but they need to have stability and economic support for the necessary dollar."

Even after Friday's Freedom, PG & E is still more than 45% lower, where it traded on the day before the launch of the fire.

PG & E has previously indicated that it has renewed its liability insurance for $ 1.4 billion for fire incidents, which runs from August 1, 2018 to July 31, 2019.

Camp Fire research efforts are intensifying as more than 600 people reported the deficit

But the estimated damage is rising rapidly. Moody said at the beginning of the week that he could go up to $ 6.8 billion, while Citigroup estimates that compensation would cost up to $ 15 billion.

The utility's total market value is now under $ 10 billion, and PG & E has announced that it currently has only $ 3.46 billion in cash after borrowing from an existing revolving credit facility.

That's why it will be a critical California state to help PG & E in the case of Camp Camp.

"We agree with CPUC President Picker's statement that long-term financial stability is one of the key elements of delivering secure electronic services," said PG & E. "Affordable access to capital is key to implementing security measures and achieving bold energy efficiency targets in California."

CNN Amanda Watts has contributed to this story

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