PG&E admits it probably caused the deadly Camp Fire

February 28, 2019

PG&E stated in a government filing Thursday that it believes it is probable the company’s equipment will be found to be the source of the 2018 Camp Fire, the deadliest and most destructive blaze in California history. [CNBC]

The filing also reveals PG&E netted a loss of $6.9 billion in 2018. Likewise, PG&E management is expressing skepticism as to whether the company can continue to operate and turn a profit.

“Although the cause of the 2018 Camp Fire is still under investigation, based on the information currently known to PG&E Corporation and reported to the CPUC and other agencies, PG&E Corporation believes it is probably that the utility’s equipment will be determined to be an ignition point of the 2018 Camp Fire,” the company stated in the filing.

Previously, PG&E divulged that it experienced two outages on power lines around the location and time the Camp Fire started. The investigation into the cause of the Camp Fire now appears to center around a malfunctioning PG&E transmission tower.

The Camp Fire, which killed 85 people and destroyed nearly 19,000 structures, started on the morning of Nov. 8 near the town of Pulga in Butte County. It ended up destroying much of the town of Paradise.

In Thursday’s filing, PG&E stated, based on early findings of the California Public Utilities Commission (CPUC), it is including a $10.5 billion pre-tax charge for Camp Fire-related claims in its full-year and four-quarter 2018 financial results.

PG&E’s full-year net losses were $6.9 billion, or $13.25 per share, according to the filing. In 2017, the company had a net income of $1.6 billion, or $3.21 per share.

Net losses for the fourth quarter of 2018 were likewise $6.9 billion, or $13.24 per share. In the fourth quarter of 2017, PG&E tallied a net income of $114 million.

“The company is facing extraordinary challenges relating to the 2018 Camp Fire and 2017 Northern California wildfires,” PG&E stated in a release. “Management has concluded that these circumstances raise substantial doubt about PG&E Corporation’s and the utility’s ability to continue as going concerns.”

Last month, PG&E filed for Chapter 11 bankruptcy as it faced billions of dollars in liabilities for involvement in California wildfires. PG&E also replaced its CEO with an interim CEO and vowed to restructure its board of directors.

PG&E’s share price plummeted last November from nearly $50 to below $18. In January, PG&E stock fell as low as $6.36 but has since recovered to more than $17.