Shares of utility company PG&E took quite a dip on Monday after a judge ruled that a jury can decide whether or not the company will be required to pay upwards of $18 billion in damages to victims of a recent wildfire, of which they are accused of causing. The stock was 25 percent down on the day, bringing the company’s market value to about $5.6 billion.
You may recall that the California-based supplier of electricity and gas has been embroiled in a scandal which holds them responsible for the 2017 Tubbs Fire. The inferno destroyed more than 5,600 buildings and claimed 22 lives in the process. It was the second-most destructive fire in the history of the Golden state, preceded only by the 2018 Camp Fire. Unfortunately, PG&E is also being held responsible for that one.
So, to recap: PG&E is being held liable for the two most destructive wildfires in California history. With that, PG&E said, in an emailed statement, “Regardless of the next legal steps, Cal Fire has already determined that the cause of the 2017 Tubbs Fire was not related to PG&E equipment. PG&E has made significant progress in further refining a viable, fair, and comprehensive plan of reorganization that will compensate wildfire victims, protect customer rates, and put PG&E on a path to be the energy company our customers need and deserve.”
As such, US Bankruptcy Judge Dennis Montali said, at the end of last week, that the court can hold a [jury] trial to decide the fate of PG&E. This has raised concern across Wall Street, with analysts advising this investment is particularly risky right now. Even as California authorities had clearly determined that PG&E equipment was not involved with the Tubbs fire, taking the case to a jury trial means that other dynamics could come into play. Montali reminds that PG&E does not exactly have a favorable history in regards to things like safety and operational culture.