Power provider PG&E Corp raises 2019 cost estimates by over 50%; shares fall
(Reuters) - Power company PG&E Corp on Thursday raised its 2019 costs estimates by more than 50% related to deadly wildfires in California and its bankruptcy, sending its shares down nearly 6%.
The company raised its cost estimates to between $6.2 billion and $6.3 billion, from a prior range of $3.8 billion to $4.1 billion, saying its bankruptcy process could extend beyond the June 30, 2020 deadline and even take years to resolve.
PG&E filed for Chapter 11 bankruptcy protection in January, citing potential liabilities in excess of $30 billion from 2017 Northern California wildfires and 2018 Camp fire linked to its equipment.
The company on Thursday reported a quarterly loss, compared with a year ago profit, primarily due to a $2.5 billion pre-tax charge from insurance settlement claims related to the wildfires that it took.
In September, PG&E Corp reached an $11 billion settlement to resolve most claims by insurance carriers related to the wildfires.
Excluding items, the company reported a profit of $1.11 per share, beating analysts’ estimates of $1.01, according to IBES data from Refinitiv.
In October a fresh set of troubles struck the company as the Kincade fire, which forced the evacuation of over 180,000 people in Sonoma County, broke out near the base of a damaged high-voltage transmission tower it owns, PG&E said.
But even as it is struggling with mounting costs, the company rejected a $2.5 billion offer from San Francisco in October to buy the bankrupt Californian company’s power lines and other infrastructure within the city, citing the offer was inadequate.
Reporting by Arundhati Sarkar in Bengaluru; Editing by Shinjini Ganguli