PG&E shares rebounded nearly 40 percent in early morning trading Friday after falling more than 30 percent Thursday on worries the electricity company may not be able to cover the billions in losses from California's worst wildfire.
The pop follows a Bloomberg report that a regulatory official told investors the agency does not want the utility giant to go into bankruptcy should it be found responsible for the the deadly wildfire, citing a person familiar with the matter.
On Tuesday, the company disclosed in an SEC filing that while it had renewed its liability insurance coverage for wildfire events in its most recent quarter to $1.4 billion, it could be facing a much larger bill. Some early estimates say the amount could exceed $13 billion.
“While the cause of the Camp Fire is still under investigation, if the Utility’s equipment is determined to be the cause, the Utility could be subject to significant liability in excess of insurance coverage that would be expected to have a material impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows," the company said in the filing.
What’s more, PG&E is already facing liabilities from wildfires in California from 2017 that destroyed more than 240,000 acres. According to a regulatory filing from earlier this month, state investigators have linked PG&E’s equipment to about 17 fires.
While California regulators are still investigating the cause of the Camp Fire that has blazed across roughly 140,000 acres in Butte County in Northern California, resulting in 56 deaths and about 100 missing persons, PG&E admitted that it notified the California Public Utilities Commission of the failure of some of its equipment in an electric incident report on Nov. 8.