Deadly California Fires Send PG&E Sliding by Most in 7 Years

(Bloomberg) -- PG&E Corp., California’s biggest utility, slumped the most in seven years on speculation downed power lines were a factor in deadly wildfires that have been raging since Sunday.

State fire officials said they’re investigating whether downed power lines or other utility equipment played a part. In a statement, San Francisco-based PG&E declined to speculate about any of the possible causes.

“We don’t have a way of knowing if they did or didn’t have anything to do with it, but as a possibility power lines are always something that comes up,” said Kit Konolige, an analyst at Bloomberg Intelligence. “Investors just worry there might be costs that insurance and ratepayers won’t cover.”

California Governor Jerry Brown declared a state of emergency across eight counties as 21 large fires have burned about 191,000 acres of land as of Thursday morning, according to Cal Fire, the state’s Department of Forestry and Fire Protection. The blazes have claimed at least 21 lives. In 2015, a CalFire investigation showed a powerline conductor operated by PG&E ignited the Butte fire that burned more than 70,000 acres, destroyed hundreds of structures and killed two people.

It’s unclear if downed lines resulted from the fires or started them, said Daniel Berlant, a spokesman for Cal Fire. The agency hasn’t narrowed its investigation into one particular cause or one particular company, he said.

PG&E plunged by 6.7 percent, the steepest one-day loss since September 2010, to close at $64.50 in New York. Thursday’s drop whittled its gain for the year to 6 percent.

PG&E said its crews were assessing damage to its electric and gas system in Napa and Sonoma counties. The utility said about 49,000 customers lacked electricity service in those areas, according to a statement on its website.

“There will likely be reviews of these wildfires by the appropriate agencies, but right now we are focused on life safety and service restoration,” Jennifer Robison, a company spokeswoman, said by email. “We will support reviews of the causes by any relevant regulator or agency.”

California’s utility regulator has a history of conducting lengthy proceedings, Konolige said. “Until more details are available, investors often take a path of saying maybe I should discount the possibility that there might be some exposure here.”

To contact the reporters on this story: Mark Chediak in San Francisco at mchediak@bloomberg.net, Stephen Cunningham in New York at scunningha10@bloomberg.net.

To contact the editor responsible for this story: Lynn Doan at ldoan6@bloomberg.net.