PG&E Stock Surges 75% After California Fire Investigators Clear the Utility in 2017’s Deadly Tubbs Fire
California fire investigators determined Thursday that the Tubbs fire that swept through Northern California in 2017 was the fault of private electrical equipment, clearing Pacific Gas & Electric of responsibility. PG&E’s stock surged 75% on the news.
In October 2017, the Tubbs fire swept through parts of Napa, Sonoma and Lake counties, becoming what was, at the time, the most destructive wildfire in California history. The fires destroyed an estimated 5,636 homes and buildings as well as 36,807 acres, many in or near Santa Rosa, leading to 22 civilian deaths and the injury of a firefighter. It also caused more than $1 billion in damages.
After concluding its investigation, Cal Fire, the state’s fire-prevention agency, said in a statement that the Tubbs fire “was caused by a private electrical system adjacent to a residential structure” and that investigators didn’t identify any violations of law.
In a statement, PGE responded to Cal Fire’’s investigation by saying it still faces “extensive litigation, significant potential liabilities and a deteriorating financial situation, which was further impaired by the recent credit agency downgrades to below investment grade…. Resolving the legal liabilities and financial challenges stemming from the 2017 and 2018 wildfires will be enormously complex.”
PG&E faced a number of lawsuits claiming that the utility’s equipment had caused the fire, which could have led to billions in damages had the company been deemed responsible. On the news, the utility’s stock surged 74.6% Thursday to close at $13.95 a share. PG&E’s stock is still down 80% from the high point it reached in August 2017.
In December, Cal Fire said that its investigators found that PG&E likely violated state public resources and health and safety laws in 12 smaller wildfires that occurred during 2017. In addition, PG&E also faces a lawsuit from 35 families who allege the company is responsible for causing the 2018 Camp Fire, which killed 88 people and burned more than 150,000 in what is now California’s most destructive wildfire.
Last week, PG&E said it would file for bankruptcy in California after the cost of wildfires left it with potential liabilities of $30 billion or more. A federal judge has also ordered the utility to trim branches and inspect thousands of miles of power lines, a task that PG&E claims would cost as much as $150 billion and would have to be funded by ratepayers.