PG&E decline continues over fear of role in fires
Investors dump the utility’s stock amid state regulators’ moves toward a possible investigation
PG&E’s stock continued to plunge Monday, with state regulators now conducting a preliminary review of the utility’s possible role in the Wine Country firestorms — a potential prelude to a full-scale investigation.
The San Francisco-based utility’s shares had plunged nearly 13 percent in early morning trading, but some buying activity later left the stock with a 7.4 percent loss and a closing price of $53.43.
As of Monday’s closing price, PG&E’s stock has shed 22.4 percent of its value during the trading days following the outbreak of the deadly wildfires, which have scorched a wide swath of rural and urban stretches in multiple North Bay counties.
The state Public Utilities Commission’s safety division is conducting the preliminary review of PG&E’s potential role in the fires, Christopher Chow, a PUC spokesman, said Monday.
A formal and full-scale investigation would have to be approved by a commission vote.
“We do not have a formal investigation underway,” Chow said.
Typically, the commission would only consider ordering a full investigation after seeing the findings of the Safety and Enforcement Division’s preliminary review, he said.
At present, the PUC safety unit’s efforts are primarily focused on working with Cal Fire on incident response and other issues.
“This includes examining PG&E’s response to the fires, and collecting information about maintenance history and vegetation management in the fire areas,” Chow said. “We will conduct in-depth investigations following the fires if utility involvement is suspected.”
The continued pressure Monday on PG&E’s stock price follows disclosures that state regulators directed the electricity and natural gas utility, as well as telecommunications companies, to preserve evidence possibly relating to the wildfires.
The prospect of an official PUC probe into PG&E has triggered echoes of the utility’s role in causing a fatal explosion on the Peninsula in September 2010, when a PG&E natural gas pipeline ruptured and unleashed a fireball that killed eight and destroyed a neighborhood in San Bruno.
Federal investigators determined that a lethal combination of PG&E’s shoddy maintenance and flawed record keeping were the principal causes of the San Bruno disaster. But the investigators also blamed the PUC’s cozy ties to PG&E and its lax oversight of the utility, one of a series of disclosures that have called into question the state agency’s ability to properly supervise California’s big power utilities.
That hasn’t hindered the state PUC from moving forward in reviewing potential evidence connected to the Wine Country wildfires, however.
Last week, the state PUC’s safety unit demanded that PG&E preserve all physical, electronic and other document-related evidence that might be connected to the infernos.
“All failed poles, conductors and associated equipment from each fire event” must be preserved, cataloged and tagged so the PUC can properly review the evidence, Elizaveta Malashenko, director of the PUC’s safety and enforcement division, ordered in a letter.
“PG&E must inform all employees and contractors that they must preserve all electronic (including emails) and non-electronic documents related to potential causes of the fires, vegetation, maintenance, and/or tree-trimming,” Malashenko stated in the letter.
The utility said it’s aware of the state agency’s letter. Depending on what it discovers, the PUC potentially could issue citations, fines, or penalties.
“We’ve received the commission’s request and will comply with the request,” PG&E spokesman Donald Cutler said Monday. “PG&E will support reviews by the appropriate regulatory agencies, which is standard practice for wildfire events.”
PG&E said more than 4,300 of its employees and partners were in the field attempting to restore gas and electricity service that remains off-line, and addressing other emergencies in the fire-ravaged regions.
“Right now, life, safety and the well-being of the customers and communities affected by the devastating Northern California wildfires is our singular focus,” Cutler said.
The PUC also ordered telecommunications companies to preserve evidence.
“AT&T, AT&T Wireless, Frontier, Comcast Phone, Verizon Wireless, T-Mobile and Sprint have an obligation to preserve all evidence with respect to the Northern California wildfires,” Malashenko wrote in a letter to telecommunications firms.
“PG&E will support reviews by the appropriate regulatory agencies, which is standard practice for wildfire events.” — Donald Cutler, PG&E spokesman