PG&E Corporation (PCG), an investor-owned utility company in California, has seen its stock price plummet over 32% between November 7 and November 12. The utility company’s stock is down an additional 4% on Tuesday morning.
The company’s stock has tumbled as California’s wildfires have claimed at least 42 lives and continues to spread, destroying everything in its way.
PG&E is already facing liability claims over wildfires in California last year, and it seems that the company may be liable for the most recent fire, too. Over 7,000 structures have been destroyed in the most recent fire, and there have been over $2 billion in wildfire-related charges against the company this year.
According to the top electrical contractors, it’s not clear if PG&E is responsible for the most recent fire, dubbed “Camp Fire.” Reports suggest that the company suffered an outage 15 minutes before the fire was reported. Investors fear that the company’s equipment may again be to blame for the wildfire.
The company has yet to release their 2018 guidance over fears that wildfire-related charges may rise.
A regulatory filing by the company states that the company “observed by aerial patrol damage to a transmission tower.” The tower was around 27 miles from the town of Paradise, which is surrounded by wildfires.
The company lost $8 billion in market value on Friday and Monday.
California utility stocks as a whole fell due to the wildfires. Fires have put pressure on utilities, but Governor Jerry Brown signed legislation in September that will give utilities relief in 2018. The law will allow companies, even PG&E, who may be responsible for the fires to be able to pass the fire-related costs to consumers.
The legislation will also allow for the possibility for utility companies to avoid bankruptcy related to the 2017 fire season.
The law does have a gap, which includes the 2018 year, that will not protect utility companies.
Southern California Edison, also an electrical company, may be responsible for the other fire roaring in California. Electricians report that there were equipment irregularities near the time and place of both fires.
A woman who owns property near the origin of the Camp Fire claims that PG&E requested access to her land prior to the fire because utility power lines were causing sparks on her land. PG&E investors claim that the legislation’s “shortcomings” have caused the company to have a credit rating that is barely “investment grade.” Investors are selling off the utility’s stock in fear that the most recent fire will put additional financial stress on the company.