California is going to start trying to figure out how to keep another one of its utilities from going bankrupt, Bloomberg News reported. PG&E Corp., the state’s largest power company, has already made a chapter 11 filing to deal with an estimated $30 billion in liabilities from wildfires that its equipment may have ignited. And its peers — Edison International’s Southern California Edison and Sempra Energy’s San Diego Gas & Electric — are just one deadly blaze away from similar ruin if a commission set up by California lawmakers can’t come up with a fix. The panel is scheduled to hold the first in a series of public meetings on Monday. Ratings companies including S&P Global Ratings have already warned that SoCalEd and SDG&E are at risk of having their credit downgraded to junk before the start of the wildfire season in June unless lawmakers take concrete steps to address a legal doctrine known as inverse condemnation. It holds a utility responsible for damages if its equipment ignites a blaze. Citigroup Inc. said in a note this week that legislation may be passed in the next two to three months, citing conversations with officials in Sacramento. Read more.
In related news, PG&E Corp. yesterday extended the deadline by which investors must file paperwork if they want to install their directors on the board, Reuters reported. Investors will now have until March 1 to nominate director candidates, the utility said in a regulatory filing here early on Thursday only hours before its original deadline was set to expire on Feb. 21. Last month, PG&E shareholder BlueMountain announced plans to try and unseat all board members, criticizing the company for filing for chapter 11 protection, a move it called unnecessary and harmful to investors. The New York-based hedge fund, which owns roughly 8 million shares of PG&E, said last week that it was ready to announce its director candidates by the Feb. 21 deadline. Read more.