Pacific Gas & Electric to Take $2.5 Billion Charge Over California Fires as Losses May Go Higher

2:18 PM, Jun 21, 2018 — PG&E Corp. (PCG) and its Pacific Gas & Electric utility will record a $2.5 billion pre-tax charge for possible losses it may take related to wildfires in northern California last year, which fire investigators said were caused by power distribution, lines, conductors and poles that failed.

“PG&E Corporation and the Utility have determined that it is probable they will incur a loss for claims in connection with fourteen of the northern California wildfires,” the company said in a regulatory filing to the Securities and Exchange Commission on Thursday.

That figure is in the lower end of the company’s reasonably estimated losses and could go higher, it said. “There are a number of unknown facts and legal considerations that may impact the amount of any potential liability, including the total scope and nature of claims that may be asserted against PG&E Corporation and the Utility,” it said.

CAL FIRE said the October 2017 “fire siege” burned at least 245,000 acres in the northern part of the state. Investigators said earlier this month that they are continuing to look into the causes of the other fires in both October and December.

A blaze that killed nine people in Mendocino county was caused by trees or parts of trees falling on PG&E lines, according to investigators. Another fire that left six dead in Napa country was also caused by tree or tree debris on lines, CAL FIRE said on June 8, although PG&E said the blaze known as the Atlas fire isn’t included in the amount outlined Thursday because it’s not probable that a loss will be incurred from that incident.

The charge also doesn’t include any potential fines that may be levied by government regulators, PG&E said. As of Monday, the company had received about 200 complaints on behalf of 2,700 plaintiffs related to the northern California wildfires, which have been coordinated in San Francisco’s superior court and is in the early stages of discovery.

Companies: Pacific Gas & Electric Co.
Price: 40.94 Price Change: +0.94 Percent Change: +2.35

Premium Financial News