PG&E Cash Sweep Sends Distress Sign to California Lawmakers

[CountAllVotes]

Source: Bloomberg

(Bloomberg) -- PG&E Corp.’s decision to shore up cash is a clear signal to California legislators that it may need help to stave off the fiscal threat posed by wildfires.

The state enacted a law earlier this year to help utilities cover costs of last year’s wildfires, including by selling bonds backed by customer bills. But the measure didn’t specifically address how to handle the costs of any fires in 2018. So PG&E may need to turn to lawmakers for another fix.

“We think Sacramento will likely step in to protect the utility and its customers,” Citigroup Inc. analyst Praful Mehta wrote in a research note Wednesday. PG&E, owner of California’s largest utility, has lost more than $12 billion in market value, about half, since the deadliest wildfire in state history broke out Nov. 8.

<snip>

Lawmakers, however, have yet to indicate that they will help. Governor Jerry Brown didn’t address the issue during a news conference Wednesday to discuss the state’s wildfires. Kevin Liao, a spokesman for Democrats in the state Assembly, said legislators were not currently working on any plan to help the utility.

Read more: https://finance.yahoo.com/news/pg-e-cash-sweep-sends-213417566.html

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If PG&E is responsible for this disaster, bankruptcy awaits as they are claiming they do not have enough liability insurance to pay off claims.

Noted a headline last night stating that there is now a natural gas shortage coming this winter. Natural gas was up 17% yesterday based on this statement.

SCREW YOU PG&E! for you!!!

[SWBTATTReg]

1. Just curious. If homebuilders continue to build in these areas, how does one ...

reduce the fire hazards of power lines? Bury them all underground (rather unfeasible I would think). I would think also that the federal government would share some responsibilities too, as to the forest footprints it controls and also, the home owners (which I'm sure they already have a bundle tied up into it, via their deductibles which I'm sure are sizable).

To all of our DUers affected by these fires, my heart goes out to you and stay safe.

[cstanleytech]

3. Not unfeasible to bury the majority of the lines but it would be rather pricey.

What's really needed are stronger laws on landscaping as well as where people can build and the materials themselves to build with.
After all if you deprive a fire with fuel in and around structures it will have a harder time burning them down.

[SWBTATTReg]

5. Makes sense in what you say. We have fire dangers too in the Ozarks (forests all around)...

and also the prairies, grasslands which burn pretty easily too.

[Farmer-Rick]

2. This is why utilities should not be privatized for profit.

Not every function in the entire world should be subjected to the profit motives of out of control capitalism. There are certain functions that a peaceful society needs to function smoothly. Throwing them out onto a capitalistic market place to fail and be buffeted by every whim of an unstable market is just stupid.

[CrispyQ]

6. This.

The GOP hit a home run when they convinced Americans that private industry can do everything better & cheaper than government. And another hit when they convinced Americans to resent paying taxes. The dems have never really countered either of these world views with a well thought out campaign. They just expect people to get it.

[mahatmakanejeeves]

8. You're right. We should adopt the North Korean model.

Per the advice given here: Keynesian capitalist economics is like ameliorating the slave code.

NASA images from space show North Korea shrouded in darkness

By Sophie Brown, CNN

Updated 4:01 AM ET, Wed February 26, 2014

Full disclosure: I do not own shares of PCG, at least not directly. I surely own some due to its inclusion in index funds.

[Farmer-Rick]

9. We should adopt the model the US used for the majority of municipalities in the 19th century

Most utilities were owned by the people or government but frequently a well regulated private management team would administer the utility through charters and such.

The chartered corporation would make profit from the contract or charter but NOT through price hikes, delayed repairs and service restrictions. It worked.

[Auggie]

10. Yes! Further more, for-profit companies can't face the challenges of climate change.

No way can they invest in climate change preparedness and stay beholden to shareholders.

[KWR65]

4. PG & E should get all the bills due then file bankruptcy.

With climate change these fires are going to be bad every year. We still don't have rain in the forecast in Cali.

[CountAllVotes]

7. Always referred to California as California

There is rain in the forecast next week btw.

[AndJusticeForSome]

11. I had read a PGE line was down when and where this fire started

Have they confirmed or denied that yet?

[CountAllVotes]

13. Apparently ....

A transmission line was tossing sparks out 15 mins. before the fire got going so ... THEY KNEW!

Their stock is tanking. Bankruptcy is the word.

https://finance.yahoo.com/quote/PCG?p=PCG

[Mr.Bill]

12. I've lived in California since 1961.

Two things I can tell you about PG&E:

Their employees are insanely well paid with incredible benefits and a fantastic pension.

Everyone I have ever know who works for PG&E has a parent who worked for PG&E.

[AndJusticeForSome]

14. My experience as well, and that's how all companies should be

Or at least the big ones with huge profits

[BigmanPigman]

16. Gov Brown just signed a bill passing some of the costs to taxpayers

but it still isn't enough to cover the huge costs of previous fires.

"California utilities again are facing severe financial pressures from the possibility that their equipment sparked catastrophic wildfires, including two that are now burning at either end of the state. The pressure comes even though Gov. Jerry Brown signed legislation in September giving utilities some relief beginning next year.

The law made it easier for utilities to pass along costs from fire-related damages to consumers and also avoid possible bankruptcy from a series of major fires that occurred during the 2017 fire season that produced more than $10 billion in losses.

But the law has a gap: No damages specific to 2018 were included, so utilities face a higher bar to bill customers to cover those costs. And this year has already supplanted 2017 as the most destructive in California's recorded history."

https://www.cbsnews.com/news/california-wildfires-could-cost-utilities-pg-e-and-edison-despite-new-law/