#1 PG&E Falls on Newsom Plan for Investor Payment into Fund
发表于 ： 2025年 7月 31日 16:16
(Bloomberg) -- PG&E Corp. shares fell on a proposal by California Governor Gavin Newsom that would require the utility company’s shareholders to make a significant contribution to the replenishment of California’s wildfire insurance fund.
PG&E dropped as much as 5% Thursday morning after the Newsom’s plan was reported by Bloomberg News a day earlier. Shares were down .5% at 12:48 pm in New York.
Under Newsom’s framework, an additional $18 billion would be channeled to the wildfire fund, almost doubling the current commitments. Electricity ratepayers would contribute half the money through a monthly fee while the other half would come from three utility companies that benefit from the fund, Edison International, PG&E Corp. and Sempra.
PG&E wouldn’t be supportive of issuing stock at its current valuation to replenish the wildfire fund, Chief Executive Officer Patti Poppe said during a second-quarter investor call on Thursday. Poppe also didn’t think a large upfront payment would be required and that the utility has the option of deciding whether to participate in the fund or not, she said.
“In the near-term, we want to support the wildfire fund’s durability because that wildfire fund also provides liability exposure protections for investors,” Poppe said, adding that she believes spreading out payments into the fund over the long term makes sense.
The existing fund risks being drained from claims stemming from the deadly Los Angeles wildfires in January that have been linked to equipment owned by Edison International’s utility. The potential draining of the fund triggered a selloff of PG&E shares, even though the company isn’t connected to the Los Angeles-area blazes.
California is grappling with how to address the rising risk and costs of wildfires that have ravaged the state, created a home insurance crisis and led to rapidly rising home energy bills as utilities spend billions to try to reduce the risk of their equipment from starting more catastrophic blazes. Utilities across the US West are also facing billions of dollars of damage claims from fires linked to their power lines.
Equity analysts said the requirement that PG&E shareholders contribute to the fund will weigh on the company’s stock.
Newsom’s plan “doesn’t appears to have utility support,” and will be unpalatable to shareholders, Julien-Dumoulin Smith, an analyst at Jefferies, said in a note published Thursday. He added the plan was “negative to shares.” The utility investor contributions to the fund are “larger where the current expectations could be,” Barclays analyst Nicholas Campanella wrote in a note Thursday.
PG&E dropped as much as 5% Thursday morning after the Newsom’s plan was reported by Bloomberg News a day earlier. Shares were down .5% at 12:48 pm in New York.
Under Newsom’s framework, an additional $18 billion would be channeled to the wildfire fund, almost doubling the current commitments. Electricity ratepayers would contribute half the money through a monthly fee while the other half would come from three utility companies that benefit from the fund, Edison International, PG&E Corp. and Sempra.
PG&E wouldn’t be supportive of issuing stock at its current valuation to replenish the wildfire fund, Chief Executive Officer Patti Poppe said during a second-quarter investor call on Thursday. Poppe also didn’t think a large upfront payment would be required and that the utility has the option of deciding whether to participate in the fund or not, she said.
“In the near-term, we want to support the wildfire fund’s durability because that wildfire fund also provides liability exposure protections for investors,” Poppe said, adding that she believes spreading out payments into the fund over the long term makes sense.
The existing fund risks being drained from claims stemming from the deadly Los Angeles wildfires in January that have been linked to equipment owned by Edison International’s utility. The potential draining of the fund triggered a selloff of PG&E shares, even though the company isn’t connected to the Los Angeles-area blazes.
California is grappling with how to address the rising risk and costs of wildfires that have ravaged the state, created a home insurance crisis and led to rapidly rising home energy bills as utilities spend billions to try to reduce the risk of their equipment from starting more catastrophic blazes. Utilities across the US West are also facing billions of dollars of damage claims from fires linked to their power lines.
Equity analysts said the requirement that PG&E shareholders contribute to the fund will weigh on the company’s stock.
Newsom’s plan “doesn’t appears to have utility support,” and will be unpalatable to shareholders, Julien-Dumoulin Smith, an analyst at Jefferies, said in a note published Thursday. He added the plan was “negative to shares.” The utility investor contributions to the fund are “larger where the current expectations could be,” Barclays analyst Nicholas Campanella wrote in a note Thursday.