PG&E’s Major Review of Finances, Operations, Management Rattles Wall Street Amid Bankruptcy Fears
By George Avalos
PG&E shares plummeted on Monday amid a wide-ranging internal review by the embattled utility that raised the prospect of asset sales, a management shakeup and even bankruptcy due to mounting legal, criminal and regulatory challenges unleashed by lethal wildfires that scorched Northern California in 2017 and 2018.
The gyrations in PG&E’s stock could intensify pressure on the state Legislature to bail out the utility from its wildfire-related liabilities and create a smooth path for the utility to pass along those costs to its customers.
“It’s not the Legislature’s responsibility to bail out a company that has shown negligence and disregard for public safety,” said state Sen. Jerry Hill, whose district includes parts of Santa Clara and San Mateo counties as well as San Bruno.
The utility behemoth’s shares nosedived 22.3 percent, or $5.45 a share, and closed at $18.95 on Monday. PG&E declined comment about the stock market decline or the rumors that now swirl around the company.
“The board is actively assessing PG&E’s operations, finances, management, structure, and governance,” the company said Friday.
This sort of review by a publicly held company of its own operations can include studying sales or spin-offs of operating units, as well as an assessment about whether the company should consider a bankruptcy filing if it is unable to meet its financial obligations.
“There is no set timeline, but the process is well underway,” PG&E spokeswoman Lynsey Paulo said Monday. “No decisions have been made and no options have been ruled out.”