Insurers Sue California Utility Over Wildfire Damages

Camp Fire: PG&E gets sued by insurance companies

The utility, which provides electricity to about 16 million Californians, is contemplating filing for bankruptcy protection, Reuters reports.

PG&E could be on the hook for tens of billions of dollars for its potential role in California's devastating Camp Fire a year ago - the deadliest and most destructive wildfire in the state's history.

UBS 's Daniel Ford reiterated a Neutral rating on the shares but raised his price target by $3, to $29, as he believes that recent disclosures support the company's position that it was not responsible for the 2017 Tubbs fire.

PG&E stock is falling again on Monday, as the shadow of California's wildfires continues to cloud the utility's future.

Still, a potential bankruptcy may be enough to force the hand of state legislators.

The parent company of California's largest utility said Friday it is assessing its finances and structure in its effort to confront a growing liability threat from wildfires blamed on the company. The company could be engaged in similar brinkmanship now, he said.

A new law signed by California governor Jerry Brown past year, requires the commission to consider a utility's finances when evaluating damages caused by wildfires, in order to determine the maximum amount it can pay without harming customers.

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Sources said the company could still receive financial help through legislation that would let it pass on to customers costs associated with fire liabilities, staving off a bankruptcy filing.

A federal judge overseeing a case that resulted in a criminal conviction for the company following a 2010 pipeline explosion has asked PG&E to explain any role it may have had in the Camp Fire. "We argue bankruptcy may be a substantive solution for several of PCG's woes, and should be considered a credible risk by shareholders".

PG&E announced the assessment Friday in a news release, citing "the growing wildfire threat".

The utility said on Friday it is also looking for new directors for its holding company and its unit Pacific Gas and Electric Co. "We recognize the need to balance the interests of many stakeholders while maintaining safe, reliable and affordable services for our customers, which is always our top priority", the company said in a statement.

Earlier on Friday, PG&E said in a statement that it's already weighing changes to both its board and how its businesses are structured.

But that is just a possibility, they said.

A bankruptcy filing is not PG&E's preference for addressing liabilities from the catastrophic blazes, some of the sources said.

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