California regulator provides the basis for PG & E bailout

Capping a wild day at Wall Street, where PG & E stocks crashed and increased as investors weighed out the prospects for state aid, California's top tool regulator said Thursday that its agency could help the tool to avoid financial disaster due to the state's wild fires. [19659002] Michael Picker, president of the California Public Utilities Commission, said the agency did not want PG & E and the state's other investor-owned tools to be filed for bankruptcy. In a move he admitted was unusual, he informed investors and analysts about their views before issuing a public statement on Thursday, a decision that could have contributed to the stock's demand for the time.

The commission, Picker said, will soon begin to implement a provision in a new state act through which tools can transfer fire costs to its customers.

The provision of the SB901[ads1] Act allows tools such as PG & E to handle fire extinguishing-related costs by using bonds that customers will pay over time. But the tool must first go through a bankruptcy test that determines how much of the cost it can absorb in itself – anything beyond what can be transferred to customers.

In an interview with The Chronicle, Picker said he believes the process may apply to firefalls from this year and last year. However, because the law currently only allows the tool to issue bonds for fires indicated in 2017, Picker has admitted that "cleanup legislation" may be necessary.

State Fire Researchers have not determined the cause of the deadly Camp Fire burning in the Sierra Nevada foot east of Chico. However, PG & E told regulators last week that some of the equipment near the fire's place of origin in Butte County experienced a problem just before the fire began, which contributed to fuel tension and at least one lawsuit due to its use.

Picker's comments to The Chronicle and in a public statement came after Bloomberg reported that he spoke to a conversation organized by Wall Street analysts, where he said that he unfavorably looked at the prospects that PG and E would go bankrupt .

The report seemed to increase the shares in the utility's parent company, PG & E Corp. While the PG & E shares went down more than 30 percent when the markets ended Thursday, the company's value dropped to $ 9 billion, they made a dramatic increase in retail trade, climbed over 44 percent and cleared today's losses.

The stock traded after hours to $ 25.60, which is still almost half of the opening price last Thursday, the day Camp Fire began.

Picker said it was possible to exploit I'm going bankrupt is "just not good politics."

"They must be financially healthy to deliver the goods and services that payers need," he said in an interview. "If they can not borrow money, if they have liquidity problems and they can not do vegetation management, it's a problem. It's not a good policy, to really let them become financially unstable."

PG & E spokeswoman Lynsey Paulo said in an email that the tool agrees with Picker that "an important component of providing secure electrical service is long-term financial stability." [19659004] "Access to affordable capital is crucial for implementing security measures and fulfilling California's daring, clean energy goals "said Paulo in the email. "Recently adopted legislation recognized the importance of financially healthy tools for California electrical customers and the implementation of it quickly is important to achieve that goal."

Picker also said that the tools commission will expand the scope of a 3-year survey of PG & E's security culture, originally abandoned from the San Bruno pipeline explosion for 2010, to include recent firefighters.

"This is really about security culture, not about San Bruno," Picker said. "That's what have they done later? Have they done things they know and they monitored them and found that they did not meet the expectations of any particular actions? What did they learn from improving?" So far, I would say that not all The evidence supports the fact that they have a strong security culture. "

It is not clear what, if any other measures the legislator will consider to help PG and E, investigators will decide their equipment triggered Camp Brann.

Because of Bill Dodd, D-Napa, a statement by his own legislators this year, "sets significant new requirements" for electrical supplies and the commission.

"It is my expectation that the public supply project will move quickly to set up these increased standards, "said Dodd, as author SB901, in the statement." It is important that Safety Culture Investigation addresses the structure and internal controls of the tool. "