PG&E Corporation saw its stock decline nearly 13 percent in trading Thursday after its board filed documents with the Securities and Exchange Commission yesterday suspending quarterly dividends to company stockholders of common and preferred shares due to potential liability from North Bay wildfires.
The company’s stock closed Thursday at $44.50 a share, down almost $7 on the day. The company will suspend dividends on PG&E stock for the quarter ending Jan. 31, 2018.
“No causes have yet been identified for any of the unprecedented wildfires, which continue to be the subject of ongoing investigations,” the company said in its filing.
“However, California is one of the only states in the country in which courts have applied inverse condemnation to events caused by utility equipment. This means that if a utility’s equipment is found to have been a substantial cause of the damage in an event such as a wildfire – even if the utility has followed established inspection and safety rules – the utility may still be liable for property damages and attorneys’ fees associated with that event.”
PG&E, with its headquarters in San Francisco, has been the target of early allegations that its power lines may have come down in the heavy winds on Oct. 8 that propelled fires in Sonoma, Napa, Solano and Mendocino counties that destroyed thousands of homes and dozens of businesses.
“After extensive consideration and in light of the uncertainty associated with the causes and potential liabilities associated with these wildfires as well as state policy uncertainties,” said Richard Kelly, chairman of the PG&E board of directors, “the PG&E boards determined that suspending the common and preferred stock dividends is prudent with respect to cash conservation and is in the best long-term interests of the companies, our customers and our shareholders.”
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