On Friday, October 13, four days after catastrophic fires swept through Santa Rosa and many other parts of Sonoma and Napa counties, PG&E filed an 8-K form with the Securities and Exchange Commission noting its potential liability if any of the fires were sparked by the company’s equipment.
On Wednesday, Oct. 11, two days after the fire started, PG&E stock traded at $69.52. After the company’s Friday announcement, the stock has plunged. On Monday Oct. 16, shares traded down more than 6 percent on the day, at nearly $54, a drop of nearly 22 percent in less than three market days.
“Since October 8, 2017,” the PG&E filing stated, “several catastrophic wildfires have started and remain active in Northern California. The causes of these fires are being investigated by the California Department of Forestry and Fire Protection (Cal Fire), including the possible role of power lines and other facilities” of PG&E.
“It is currently unknown whether the Utility would have any liability associated with these fires,” the statement said. “The Utility has approximately $800 million in liability insurance for potential losses that may result from these fires. If the amount of insurance is insufficient to cover the Utility’s liability or if insurance is otherwise unavailable, PG&E Corporation’s and the Utility’s financial condition or results of operations could be materially affected.”
Estimates of losses from fires in the past week in Sonoma, Napa and Mendocino counties already have reached into the billions of dollars.
In the 2010 San Bruno gas pipeline explosion that killed eight people and destroyed 38 homes, PG&E was fined $1.6 billion by the Public Utilities Commission, and paid some $565 million to settle lawsuits by victims. A settlement in April for $90 million was to PG&E shareholders, who sued the company’s managers and directors.
James Dunn covers technology, biotech, law, the food industry, and banking and finance. Reach him at: email@example.com or 707-521-4257