Utility expects $2.5B in costs from California wildfires

Utility expects $2.5B in costs from California wildfires
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Electric utility PG&E Corp. is warning investors that it is likely to face at least $2.5 billion in costs stemming from last year’s fires in California’s wine country, which state investigators have largely blamed on the company’s equipment.

State officials ruled last month that Pacific Gas & Electric Co., a subsidiary of PG&E, owned equipment that was responsible for 15 of the devastating fires.

Investigators said fraying and faulty power lines, caused the fires, along with breaking and falling poles.

Even if its equipment was working properly, the company can be held responsible under California law.

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“These fires were tragic and we remain focused on helping communities recover and rebuild,” PG&E CEO Geisha Williams said in a Thursday statement.

“Looking forward, the state, first responders and California’s utilities are all in agreement that we must work together to prevent and respond to wildfires and enhance infrastructure resiliency. Years of drought, extreme heat and 129 million dead trees have created a ‘new normal’ for our state that requires comprehensive new solutions.”

PG&E said in a filing with investors that the $2.5 billion estimate “corresponds to the lower end of the range of PG&E Corporation and the utility's reasonably estimated losses, and is subject to change.”

It includes the company’s expectations for the outcomes of more than 200 lawsuits and any fines or other penalties that may be imposed.

The October 2017 fires killed 44 people and destroyed thousands of homes. They were some of the worst wildfires in the state’s history.

PG&E already announced its intent to withhold a shareholder dividend this year, saving $1 billion that it could put toward the fire costs.