SAN FRANCISCO — Mounting fears over PG&E’s potential liability for the Wine Country inferno, the forbidding prospect of a lengthy probe into the utility’s role in the disaster, and a disclosure Friday that PG&E has $800 million in insurance to cover losses from the blazes shoved the company’s shares into a nose-dive Friday.
Separately, state regulators demanded that PG&E preserve physical and electronic evidence connected to at least seven fires in Northern California — a revelation that suggested that wide-ranging, multiple official investigations may confront PG&E. The lethal wildfires have claimed lives and destroyed homes and businesses in Sonoma and Napa counties.
And in a new regulatory filing on Friday, PG&E said it has about $800 million in liability insurance to cope with “possible losses” that might result from the blazes.
PG&E’s stock plummeted 10.5 percent, or $6.78 a share and closed at $57.72, a one-year low. So far this week, PG&E’s shares have crashed 16.2 percent. It was the company’s worst one-week performance since October 2008, according to Bloomberg News.
“You have the fear of the unknown,” said Paul Patterson, an analyst with Glenrock Equities. “It’s a question of shoot first and get answers later.”
Investors have placed PG&E on a short leash due to years of negative disclosures following a natural gas pipeline explosion in San Bruno that killed eight people in 2010.
In April 2015, the state Public Utilities Commission imposed a $1.6 billion penalty on PG&E for causing the San Bruno disaster. Then in August 2016, a federal jury convicted PG&E on six criminal charges for its illegal actions before and after the lethal blast. In January of this year, PG&E was branded a convicted felon when the federal trial judge sentenced the utility on the convictions.
“The experience of San Bruno clearly is something that weighs on people’s minds,” Patterson said.
Now, the state Public Utilities Commission has ordered PG&E to “preserve all evidence” regarding the wildfires in the North Bay, according to a letter sent to the company by Elizaveta Malashenko, director of the PUC’s safety and enforcement division.
“All failed poles, conductors and associated equipment from each fire event” must be preserved, cataloged and tagged so the PUC can properly review the evidence, Malashenko ordered in the letter.
The commission’s safety division also demanded that PG&E do more than preserve physical evidence.
“PG&E must inform all employees and contractors that they must preserve all electronic (including emails) and non-electronic documents related to potential causes of the fires, vegetation, maintenance, and/or tree-trimming,” Malashenko stated in the letter.
The PUC itself has been tainted by official federal findings that its cozy relationship with PG&E and its lax oversight of the utility were among the factors that caused the San Bruno explosion, along with PG&E’s shoddy maintenance and flawed record keeping for its aging web of natural gas pipelines.
San Francisco-based PG&E said it has received the PUC’s letter.
“Since the wildfire began Sunday night, in the cases where we have found instances of wires down, broken poles and impacted infrastructure, we have reported those to the commission and continued to share that information with CalFire,” PG&E spokesman Donald Cutler said.
In an unsettling new filing with the Securities and Exchange Commission, PG&E said it wasn’t certain about its involvement in the situation.
“It currently is unknown whether the utility would have any liability associated with these fires,” PG&E said in the SEC filing. “The utility has approximately $800 million in liability insurance for potential losses that may result from these fires.”
PG&E Corp., the holding company whose principal enterprise is the Pacific Gas and Electric Co. utility, acknowledged there were no assurances the insurance would cover any liabilities.
“If the amount of insurance is insufficient to cover the utility’s liability or if insurance is otherwise unavailable, PG&E Corp.’s and the utility’s financial condition or results of operations could be materially affected,” PG&E stated in the SEC filing.
The situation has cast a shadow over PG&E’s prospects at a time that the company has sought to burnish its image in the wake of the San Bruno disaster in September 2010.
“There could be some big problems here,” Patterson, the analyst, said. “There is going to be an investigation and it’s too early to say what caused this. People are asking questions. No one knows the answers.”