PG&E Cash Sweep Sends Distress Sign to California Lawmakers

(Bloomberg) -- PG&E Corp.’s decision to shore up cash is a clear signal to California legislators that it may need help to stave off the fiscal threat posed by wildfires.

The state enacted a law earlier this year to help utilities cover costs of last year’s wildfires, including by selling bonds backed by customer bills. But the measure didn’t specifically address how to handle the costs of any fires in 2018. So PG&E may need to turn to lawmakers for another fix.

“We think Sacramento will likely step in to protect the utility and its customers,” Citigroup Inc. analyst Praful Mehta wrote in a research note Wednesday. PG&E, owner of California’s largest utility, has lost more than $12 billion in market value, about half, since the deadliest wildfire in state history broke out Nov. 8.

Lawmakers, however, have yet to indicate that they will help. Governor Jerry Brown didn’t address the issue during a news conference Wednesday to discuss the state’s wildfires. Kevin Liao, a spokesman for Democrats in the state Assembly, said legislators were not currently working on any plan to help the utility.

“The focus now is on putting out the fires and on recovery for victims,” he said.