PG&E shares dive after utility flags impact from Camp wildfirePosted On: Nov. 14, 2018 8:34 AM CST
(Reuters) — Shares of utility PG&E Corp. fell 18% Wednesday after the company warned of liquidity concerns if its equipment was found responsible for starting the Camp wildfire currently raging in California.
The company said liabilities related to the wildfires could exceed its recently renewed insurance cover, adding to the severe financial pressure it is already facing.
The utility has already withdrawn $3 billion from its credit line in anticipation of fire-related liabilities, leaving it with no additional money available under its credit agreements, it said in a filing with the U.S. Securities and Exchange Commission.
The Camp wildfire, which has killed nearly 48 people, is being investigated, and PG&E told regulators it experienced problems with transmission lines or substations in areas around the time the blazes were reported to have started.
NBC said in a report Tuesday that a day before the fire started, PG&E emailed a local landowner about “problems with sparks” and the need for workers to enter her property and work on the high-power lines. The company, however, was unable to address the issue as the landowner was out of town, the report said.
The company said in the SEC filing it had renewed liability insurance coverage for wildfire events of about $1.4 billion for the period from Aug. 1 through July 31, 2019.
(The insurance is “comprised of $700 million for general liability (subject to an initial self-insured retention of $10 million per occurrence), and $700 million for property damages only, which property damage coverage includes an aggregate amount of approximately $200 million through the reinsurance market where a catastrophe bond was utilized,” according to PG&E’s most recent quarterly filing.
PG&E’s “cost of obtaining wildfire insurance coverage has increased to $360 million,” the filing said.)
PG&E did not immediately respond to requests for comment.
The company already faces billions of dollars in potential payouts from lawsuits after California said PG&E’s power lines were responsible for sparking last year’s wildfires.