PG&E Needs California’s Help to Calm Investors Post-Fire, CEO Says

PG&E Corp. wants California to promptly shore up the state’s $21 billion insurance fund for utilities that is at risk of being drained following the recent devastating fires in the Los Angeles area.

Investors are concerned that if neighboring utility Southern California Edison is found liable for the deadly Eaton fire, it would empty the state wildfire fund that currently doesn’t have a mechanism to be replenished, PG&E Chief Executive Officer Patti Poppe said in an interview. That, in turn, has resulted in PG&E’s market value dropping 20% since the Los Angles fires erupted on Jan. 7, even though the blazes weren’t in the company’s service territory.

Related: Southern California Edison Gear Ignited More Fires in 2024 Than Previous Year

“There’s a spillover impact on investors even being interested in investing in PG&E,” Poppe said in an interview after the company reported fourth-quarter results Thursday.

Financial damages from the wildfires are mounting after the blazes incinerated entire neighborhoods and destroyed thousands of homes. Some estimates have pegged insured losses from the disaster at as much as $30 billion. The state fund that’s designed to shield investor-owned utilities from losses currently has more than $12 billion in liquid assets, and has a total allowance of $21 billion.

Related: Edison Utility Faces Shareholder Lawsuit Over LA Wildfires

Poppe said working with lawmakers to address the issue will be a priority this year. There are multiple ways the California legislature could address utility liability exposure including extending the life of the fund, Poppe said. PG&E shareholders shouldn’t be required to contribute to replenishing the fund as that would make it harder to attract capital needed to invest in its infrastructure, Poppe said.

“I have confidence in our policymakers to do the right thing here,” Poppe said. “It’s a statewide problem that needs a statewide solution.”

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