California Wildfire Liability May Cause PG&E To Sell Off Part of Company to Avoid Bankruptcy
The California wildfires that scorched millions of acres across the Golden State in late 2018 caused widespread devastation, with loss of human life and property damage just some of the ways that the fires touched the lives of thousands of Californians.
And according to a new report by National Public Radio, Pacific Gas and Electric (PG&E), the parent company of California’s largest utility, is exploring whether to sell off a major part of the company in order to cope with the cascading costs that continue to impact the energy company. Former PG&E employees who spoke with NPR on the condition of anonymity said that the company was considering selling its natural gas division in order to avoid bankruptcy as it works to cover liability costs.
For its part, PG&E released a statement to NPR in which it said that the company “does not comment on market rumors or speculation.” In response to a request for a comment from Fortune, PG&E emailed: “[T]he PG&E Board is reviewing structural options to best position PG&E to implement necessary changes while meeting customer and operational needs. Safety is and will continue to be our top priority as we work to determine the best path forward for all of our stakeholders. PG&E remains fully committed to helping our customers and the affected communities recover and rebuild—and to doing everything we can to reduce the risk of future wildfires.” The spokesman did not address the sale rumor.
The fires that impacted communities all over the state have already hurt several utility companies in real dollars as well as public perception. Stocks for PG&E and Edison International fell dramatically back in November as the fires worsened, and 35 families from the town of Paradise have sued PG&E over the Camp Fire. Additionally, several insurance companies including Allstate, State Farm, and USAA are suing PG&E over wildfire damages, according to Marketwatch.