PG&E jolted by billions in quarterly losses amid wildfire costs, sees exit from bankruptcy
By George Avalos / Bay Area News Group
Utility suffers $3.6 billion fourth-quarter loss, $3.8 billion in wildfire expenses
PG&E posted a $3.62 billion loss for the final three months of 2019, but the embattled utility said Tuesday it’s on track to emerge from a bankruptcy quagmire linked to its liabilities for a string of lethal wildfires.
Tucked away in its multiple disclosures related to its financial results was the revelation of a new plan to spend $37 billion to $41 billion over the next five years in “infrastructure investments.”
It’s possible that this additional spending could unleash PG&E requests for state regulators to approve higher monthly gas and electricity bills.
For all of 2019, PG&E lost $7.66 billion, the company stated in its earnings report for the October-through-December quarter.
“PG&E has made significant progress in our Chapter 11 cases over the past year,” PG&E Chief Executive Officer Bill Johnson said in a prepared release. “We have resolved essentially every consequential issue within the Bankruptcy Court’s jurisdiction, most notably reaching a settlement with wildfire victims.”
Excluding one-time items that the utility declared were not indicative of the company’s ongoing financial performance, PG&E posted a profit of $360 million for the fourth quarter.
The one-time items included $3.85 billion in wildfire-related costs, PG&E said.
Separately, a group of Bay Area state lawmakers announced legislation that would make it easier for state and local prosecutors to bring enforcement actions against an electricity provider if the company fails to comply with current safety standards.
“Our state is facing dire circumstances,” Assemblymember Rebecca Bauer-Kahan, whose district includes parts of Alameda County and Contra Costa County, said in announcing her legislation. “Four of the five largest wildfires in California’s history have happened in the past seven years.”
At present, only the state Public Utilities Commission has enforcement authority. The bill is AB 2356.
The PUC has come under harsh criticism from federal investigators for the commission’s oversight of PG&E during the years before a fatal explosion in 2010 that killed eight and destroyed a San Bruno neighborhood.
A federal probe determined that PG&E’s shoddy maintenance and flawed record-keeping, along with the commission’s lazy supervision of the utility, caused the explosion. In 2016, a federal jury convicted PG&E in a criminal case for felonies PG&E committed before and after the deadly natural gas blast.
PG&E’s electricity system is under intense scrutiny after the company’s equipment caused or was linked to a string of catastrophic and deadly wildfires in recent years.
Among those: a 2015 wildfire in Calaveras County and Amador County, several infernos in 2017 in the North Bay Wine Country and nearby regions, and a 2018 wildfire that roared through Butte County and effectively destroyed the town of Paradise.
San Francisco-based PG&E said it is on track to exit its $51.7 billion bankruptcy by June 30, the deadline for PG&E to be able to tap into the state’s new $20 billion wildfire fund.
However, Gov. Gavin Newsom, who has emerged as a harsh critic of the company, has threatened to orchestrate a takeover of PG&E by the state of California if the utility’s safety and reliability efforts are deemed unsatisfactory.
PG&E shares slid 0.7 percent lower and closed at $16.09 on Tuesday.
“Our focus now is on working with all key stakeholders, including elected officials and state regulators, to position PG&E for emergence as a financially stable company with a renewed and rigorous focus on safe operations and customer service,” Johnson said.