Report: California Utility Exploring Sale Of Gas Division, HQ To Cover Damages From Wildfire Claims
In an effort to address liability costs from recent California wildfires, Pacific Gas & Electric, the state's largest utility, could sell its gas division and sell off real estate assets, including its San Francisco headquarters, NPR reported Friday.
PG&E is under investigation related to the cause of the Camp Fire that ripped through the town of Paradise in November, growing to become the deadliest and most destructive wildfire in the state's history. The company faces possible murder charges related to the 85 confirmed deaths from that fire.
The state's fire agency has determined that the company's equipment was responsible for several Northern California wildfires in 2017.
Now, according to anonymous sources quoted by NPR, the company is having internal discussions about selling off the natural gas division and/or selling its HQ building in the spring to cover those costs and avoid bankruptcy. The proceeds from the sale would be used to create a fund that would be used to pay off potential claims from the 2017 and 2018 fires, which could reach an estimated $15B, NPR reports.
If the company sells its San Francisco headquarters, it could move operations elsewhere in the Bay Area.
PG&E has only officially stated that it would review structural options to meet customer and operational needs. The company said safety was its top priority.
The Camp Fire, which ultimately damaged or destroyed about 15,000 structures and burned more than 153,000 acres, started Nov. 8. Reports soon surfaced that PG&E had had problems with its equipment in that area.
In 2010, a gas line exploded in San Bruno, killing eight people, and the company was convicted of felony safety violations and put on criminal probation. There is some question of whether the utility violated that probation if it did not maintain power lines and that led to the wildfires.
PG&E has been sued by several insurance companies and its stock has taken a beating, dropping to 50% of what its value was before the Camp Fire.