The potential liabilities PGE faces from fires in 2017 and 2018 are estimated at more than $30 billion.First, more than a decade ago, severe weather bankrupted an electric company in New Orleans.
Then it helped take down one in Houston.
Now, in California, it has pushed PGE Corp.
to brink, in biggest warning yet about financial risks of climate change.The utility giant's critics contend it's hurtling toward bankruptcy court because of its own negligence and arrogance.
But for many months, PGE has pointed to culprit of a shifting climate that led to devastating wildfires and, now, crushing liabilities.
It's "a real wake-up call" for businesses across country, said Ian Monroe, chief executive officer of socially responsible investment firm Etho Capital.Whatever their exact cause, California fires -- and utility's response -- have turned PGE into a poster child for climate-change dangers.
A bankruptcy would make it largest company to seek protection while blaming effects of a warming planet for situation.Some experts don't see any sector as safe, as likelihood of what used to be improbable weather disasters grows."Climate is increasingly being connected to all sorts of potent natural events, and it magnifies intensity of events that companies running businesses are facing," said Dan Reicher, a fellow at Steyer-Taylor Center for Energy Policy and Finance at Stanford University.
"The question is, if your service is out because of a hurricane, to what extent can you point to climate change as a cause That's for courts and public opinion."The most directly vulnerable are utilities like PGE, long viewed as safe and steady investments.
Hurricane Katrina bankrupted an Entergy Corp.
unit in New Orleans when its customer base was decimated, and 60 inches of rain dumped by Hurricane Harvey did same to already struggling ExGen Texas Power.
But there's a long list of those at risk, including farmers, homebuilders and insurers; Merced Property and Casualty Co., a small California insurer, deteriorated due to losses from 2018 Camp Fire, leading state's regulator to take control of it.In August, Federal Reserve Bank of Richmond said in its Economic Brief that higher summer temperatures could hurt a variety of sectors.
The evidence of warming "challenges long-standing assumptions that economic damage from climate change would be confined largely to agricultural sector or to developing nations," according to a summary of report.As PGE plans for a bankruptcy filing, it's unclear what role its climate-change argument will play in court.
The company aggressively made its case in California that it was dangerously exposed to what Geisha Williams, who quit as CEO over weekend, called "climate-driven extreme weather." It used that as part of its unsuccessful bid to overturn a legal doctrine known as inverse condemnation, which holds California utilities responsible for wildfire damage caused by their equipment, whether or not they acted negligently.State officials didn't disagree that hot and dry summers were fueling ever more explosive blazes, but that didn't get company off hook.
The potential liabilities PGE faces from fires in 2017 and 2018 are estimated at more than $30 billion; state Department of Forestry and Fire Protection has blamed more than a dozen of 2017 blazes in part on company's power lines and other equipment.Gov.
Gavin Newsom and legislature have signaled that they aren't keen on using state funds to bail out company, whose stock has crashed.
Its bonds, which were trading above face value before Camp Fire erupted in November and claimed more than 86 lives, and its most liquid PGE bonds, 6.05 percent notes due in 2034, fell 3.125 points to 77.25 cents on dollar as of 11:20 a.m.
in New York, according to Trace.When extraordinary wildfires raged in California's Napa and Sonoma counties in 2017, attitude was that it was a "terrible scenario but a one-off," said Michael Wara, director of Stanford University's climate and energy policy program.
Then, "when Camp Fire happened, it was, 'Oh no, this is normal.' And now, they're insolvent."(This story has not been edited by TheIndianSubcontinent staff and is auto-generated from a syndicated feed.)