California Regulator: We May Never Know If PG&E Caused FiresBy
Fires may have destroyed evidence, top utility regulator says
Agency may take up PG&E’s structure as part of safety review
The wildfires, which have killed at least 42 people and destroyed thousands of structures across California’s iconic wine country, may have also burned the evidence necessary to find out what caused them, Michael Picker, chairman of the state’s Public Utilities Commission, said in an interview Wednesday. Utility owner PG&E has meanwhile lost more than $6 billion of its market value amid speculation that downed power lines may have contributed to igniting the fires.
“We still don’t know whether the fires caused pole or line damage or the poles caused the fires,” Picker said while attending a symposium organized by grid manager California Independent System Operator Corp. in Sacramento. “They may never sort it out.”
What is clear, he said, is that the state must consider climate change’s role in how severe wildfires have become and enhance its safety programs. His remarks echoed ones made by PG&E’s own chief executive officer, Geisha Williams, earlier this week. In an interview with the San Francisco Chronicle, she stressed the need to consider the right climate strategies as opposed to focusing on tree-trimming.
The devastating fires threaten to weigh on PG&E’s stock for months as state agencies investigate PG&E’s equipment as one potential cause. JPMorgan Chase & Co. estimated the company faces $12 billion of potential gross liability based on other state fires and updated damage. Under state law, the utility may be liable for damages even if negligence isn’t involved, according to Morgan Stanley.
PG&E rose 1.1 percent to $57.03 at 2:06 p.m. on Thursday. Picker’s comments could “generate some near term relief” for PG&E’s stock although it will be some time before anything definite is known about the cause of the fires, Jonathan Arnold, a utility analyst for Deutsche Bank AG, said in a note Thursday.
The Public Utilities Commission has asked PG&E and telecommunication companies to preserve evidence in the areas of the wildfires. The agency is also looking into PG&E’s tree-trimming and maintenance activities where the blazes started.
When asked about recent calls to dissolve or split up PG&E should it be found negligent, Picker said Wednesday that the company’s structure would probably be taken up as part of an ongoing review of its safety culture.