Pacific Gas & Electric Company shares plunged after the company said in a report to the California Public Utilities Commission that its power line malfunctioned around the time and location a wildfire began in California’s wine country on Wednesday.
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TickerSecurityLastChangeChange %PCGPG & E CORP.5.28-1.93-26.74%
“Those transmission lines were not deenergized because forecast weather conditions, particularly wind speeds, did not trigger the PSPS [Public Safety Power Shutoff] protocol,” PG&E said.
The San Francisco-based utility's market capitalization fell to $2.87 billion on Friday morning, near the record low of $2.67 billion reached on April 9, 2001.
The utility shut power to 27,800 customers Wednesday afternoon, hours before the Kincade Fire. However, the company’s high-voltage power lines were still operating when the broke out. As of 9 p.m. Thursday evening, power has been restored to 93 percent of customers who had lost service.
PG&E workers replace a power pole in Walnut Creek, Calif.,, Oct. 23, 2019. (Jane Tyska/MediaNews Group/The Mercury News via Getty Images)
PG&E was forced to shut off power to hundreds of thousands of customers this month. On Oct. 9, the San Francisco-based utility shut off power to more than 800,000 customers amid concerns extreme wind and dry weather could spark new wildfires caused by downed power lines.
The decision drew the ire of California Gov. Gavin Newsome, who said this is “not a climate change story as much as a story about greed and mismanagement over the course of decades.”
PG&E in January filed for Chapter 11 bankruptcy protection due to liabilities stemming from wildfires in Northern California in 2017 and 2018.
Embers fly across a roadway as the Kincade Fire burns through the Jimtown community of Sonoma County, Calif., Oct. 24, 2019. (AP Photo/Noah Berger)
The utility was delivered a blow after Bankruptcy Judge Dennis Montali ruled earlier this month that it doesn’t have the ability to solely control its reorganization, saying a plan developed by bondholders, led by the hedge fund Elliott Management and supported by California citizens with claims against the utility for damage caused by the wildfire, should be considered.
The ruling has prompted fears that PG&E shares could become worthless.
“In the worst case, the competing plan could win and completely wipe out current shareholders,” wrote Greg Gordon, an analyst at Evercore ISI. “In other words, zero is possible.”