Pressure on power company
A utility company facing severe financial pressure amid speculation its equipment may have sparked a deadly Northern California wildfire asked US energy regulators last month for permission to raise its customers’ monthly bills to harden its system against wildfires and deliver a sizeable increase in profits to shareholders.
In an October filing with the Federal Energy Regulatory Commission, Pacific Gas & Electric Co laid out a variety of dangers confronting its transmission lines running through Northern California, saying its system faced a higher risk of wildfires than any other utility.
“The implications of PG&E’s exposure to potential liabilities associated with wildfires are dramatically magnified,” the filing said. “Overcoming the negative financial impact of any significant damages that might ultimately be attributed to PG&E will require an ongoing commitment of capital from investors.”
San Francisco-based PG&E — one of the United States’ largest electric utilities serving most of Northern and central California — made the request a month before the Camp Fire broke out November 9 and quickly ballooned into the deadliest US wildfire in a century. No cause has been determined, but speculation has centred on PG&E, which reported an outage around when and where the fire ignited.
The company has lost US$15 billion ($21.95b) in market value, its shares plummeting 60 per cent in a week.
PG&E already faced financial pressure from its suspected role in a series of deadly fires in California’s wine country last year.
Fire investigators have blamed PG&E equipment for 12 of last year’s wildfires, including two that killed 15 people combined. In eight of those fires, investigators said they found evidence of violations of state law and forwarded the findings to prosecutors.
The company is facing dozens of lawsuits from insurers and people who lost their homes last year. And a lawsuit this week blames PG&E for the latest fire, accusing the company failing to effectively maintain power lines.