Thursday, February 28, 2019

PG&E admits equipment ‘probably’ caused Paradise Camp Fire, says its future is in doubt

PG&E acknowledged Thursday that its power equipment is likely to blame for the Camp Fire, the deadliest fire in California history.

6 things to know about the PG&E bankruptcy filing and how it affects you
PG&E is about to go bankrupt. Will the troubled utility keep the lights on as it finds a resolution of the billions of dollars it faces in potential liabilities from the Camp Fire and the wine country wildfires. 

PG&E acknowledged Thursday that its power equipment is likely to blame for the Camp Fire, the deadliest fire in California history.

The company, which filed for bankruptcy a month ago, also said its wildfire liabilities “raise substantial doubt about PG&E Corporation and the utility’s ability to continue as going concerns.” Companies typically use “going concern” language in Securities and Exchange Commission filings when they’re in such dire financial straits that the company’s future existence is in doubt.

State officials have raised the possibility of forcing PG&E to sell some of its operations, including its natural gas division, to pay wildfire claims. The idea of a state takeover of the utility has also been discussed.

Announcing its fourth quarter financial results early Thursday, the beleaguered utility said “it is probable that its equipment will be determined to be an ignition point of the 2018 Camp Fire.”

A faulty transmission tower near the remote community of Pulga, northeast of Paradise, has long been suspected as the probable cause of the November fire, which killed 85 people and destroyed much of Paradise.

PG&E said a “broken C-hook” attached to the 115-kilovolt tower was the probable cause of the fire. That, according to PG&E, caused a malfunction of the line at about the time and place that state CalFire officials say the Camp Fire ignited. A PG&E employee observed a fire at that site minutes later. PG&E inspectors later found a “flash mark” and other damage on the pole.

California state fire investigators on Thursday declined comment on PG&E’s announcement, saying their investigation of the fire cause is still underway, with no date set for completion.

“We will not address what PG&E said until our investigation been completed,” CalFire spokesman Scott McLean said.

Facing an estimated $30 billion in liabilities from the 2017 and 2018 wildfires, Pacific Gas and Electric Co. and its parent PG&E Corp. filed for Chapter 11 bankruptcy protection in late January.

John Geesman, an energy policy consultant in Oakland, said the latest revelations will worsen the utility’s already troubled image and could influence Gov. Gavin Newsom and the Legislature as they consider what steps they should take to deal with the PG&E bankruptcy.

The quarterly financial results shed additional light on PG&E’s troubles. The company took an $11.5 billion charge against earnings, including $10.5 billion from the Camp Fire and an additional $1 billion from the 2017 fires. Previously, the company had recorded a $2.5 billion charge from the 2017 fires, which swept through Northern California’s wine country and parts of the Sacramento Valley.

“The charges represent a portion of the previously announced estimate of potential wildfire liabilities, which could exceed more than $30 billion,” the company said.

The charges plunged PG&E into the red for 2018; the company announced a loss of $6.9 billion for the year. PG&E stock fell 20 cents a share in early New York Stock Exchange trading, to $17.60.



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