TANGENT
Edison International shares were down 23% at 11:30 a.m. EDT and Sempra were down over 2% alongside PG&E.
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KEY BACKGROUND
PG&E is California’s largest electric and natural gas utility company, and has faced major financial challenges from wildfires in the past, including filing for bankruptcy in 2019 after it was saddled with tens of billions of dollars in potential wildfire liabilities. The company has since invested heavily in reducing wildfire risk and hardening its grid, but it is still exposed to the state’s rules governing who pays when utility equipment is linked to a fire. California lawmakers advanced Senate Bill 492, which would change how wildfire and recovery claims are handled but leaves out the liability protections PG&E says it needs to support grid investment. The bill requires the company to cover almost 48% of California’s Wildfire Fund if it runs out of money.
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BIG NUMBER
$21 billion. This is the approximate claims-paying capacity of California’s , created in 2019 to help cover eligible claims from utility-caused wildfires. Senate Bill 492 does not add new money to the fund or establish a way for replenishing it, leaving PG&E investors concerned about future wildfires.
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FURTHER READING
Putting Out Fires – Is Restructuring The Only Future For PG&E? (Forbes)