PG&E Corp.
The move came after PG&E released a statement on California Senate Bill 492 (SB 492) on Sunday.
PG&E Says SB 492 Falls Short Of Long-Term Wildfire Reform
The company said the amended SB 492 could help wildfire survivors and strengthen preparedness efforts, but does not go far enough to create a sustainable solution for California's wildfire challenges.
The company said the legislation fails to sufficiently address financing risks stemming from the state's existing wildfire liability framework, potentially limiting affordable investment needed to build a safer, more reliable energy system and control costs for customers.
PG&E cited an April report from the California Earthquake Authority, which found that existing funding mechanisms are insufficient, and said SB 492 does not adequately resolve these concerns.
The company called for a long-term framework that supports wildfire survivors, preserves strong safety incentives, reduces wildfire risk and enables affordable investment to safely and reliably serve customers and communities.
Sees Wildfire Liabilities Beyond 2030
BMO analyst says that the bearish stance reflects the passage of SB 492. The analyst said it failed to address or improve key shortcomings in California's wildfire framework.
The proposed legislation does not provide a long-term solution for the wildfire fund or establish a cap on related liabilities, leaving investors exposed to potentially open-ended wildfire risks. The analyst sees no current support for addressing this issue.
Thalacker writes that the price forecast now incorporates the possibility of uncapped wildfire liabilities beyond 2030.
Although management is expected to outline a revised capital allocation strategy soon, the analyst does not believe such a response alone would be enough to improve investor sentiment.
PCG Price Action: PG&E shares are trading lower by 18.64% at $13.51 at publication on Monday.
