Two weekends ago, one the worst every wildfires to scour the California countryside started which is called California Wildfires. Since then, nearly 250,000 acres of land has been charred, more than 5,700 structures have been destroyed in the flames and the current death toll is at 42 and rising. 53 people are still unaccounted for in Sonoma County, while numbers are still being tallied in Napa, Mendocino, Lake, Butte and other California counties.
PG & E
According to the latest investigations, all fingers seem to be pointing at PG&E as the culprit. The power company’s faulty power lines are being cited as the reason for the wildfires starting in the wine country of the state. If these allegations are proved to be true, then PG&E could be dissolved.
A review of traffic recordings on emergency radio revealed that there were at least 10 spots in Sonoma County that fire crews were dispatched to on October 8. All these reports mentioned sparking electrical wires and exploding transformers due to strong winds in the area that night. It was at this time that the first fires were reported too.
PG&E, or Pacific Gas and Electric Corporation is North California’s largest public utility company. The company has been found responsible for previous fires in the state. In 1994, it was proved that the public utility company was responsible for the wildfires in the Nevada Foothills in which 12 homes and a school were burned down. The company was charged with 739 counts of criminal negligence for not trimming trees near their power lines.
In 2010, the company’s main gas pipeline exploded in San Bruno, which led to PG&E being fined $1.6 billion in fines as well as criminal convictions of those directly held responsible.
This year, the company was fined $8.3 million for causing the deadly fires in 2015 in Butte which burned down more than 500 homes. Again, the charges were due to a failure in the maintenance of a power line.
Now, the company is already seeing another spate of legal proceedings as the first lawsuit has been filed against them by a couple in Santa Rosa who lost their home to these wildfires. According to law firm Robins Cloud, they have a huge list of claimants who wish to sue PG&E for the damage their negligence has caused. JP Morgan & Chase estimate a worst case scenario of $12 billion in litigation damages for the company.
State Senator Jerry Hill has warned the company that he will do all he can to have the company broken up if it is proved that these wildfires are also caused due to negligence on the part of PG&E.
The utility company’s stocks have plunged 17% since the allegations were made on October 11. PG&E also lost more than $6 billion in market value. On Monday, the company’s shares closed trading at $53.43, which was a 22% drop from their closing price at close of trading on Friday the previous week (October 6). Friday was the last trading day before the California Wildfires began. On Tuesday, PG&E stocks regained some ground but going by 7.5% from the previous day. This was after there was a report that an arson suspect was arrested in relation to the wildfires. However, later, it was clarified that the arson was in relation to another fire that was started on Sunday, and not the far deadlier blazes that started the previous night. The stocks closed at $57.44. The stocks currently are down to $57.24.
PG&E’s rating has been downgraded to “sell” by Goldman Sachs, JP Morgan & Chase as well as Wells Fargo.