PG&E Corp Risk Quotient Collapsed to 10, Down 86% Before Stock Price Fell 95%
A PG&E gas pipeline exploded in San Bruno in 2010, drawing attention from the public, press, and regulators regarding maintenance and safety practices.
- RQ score dropped 64 points on 10-K filed 2015-02-10 on safety concerns, then stayed low for next two years.
- Massive wildfires in 2015, 2017, and 2018 were attributed to PG&E’s powerline maintenance practices and led $25B liabilities and the bankruptcy of the utility. 1
Risk factors from 10-K filing on 2015-02-10 highlighted by RRX™
Regulatory Enforcement: “The Utility could be subject to additional regulatory or governmental enforcement action, including … vegetation management; design, construction, operating and maintenance practices; safety and inspection practices …. ”
Reputation: “As the Utility’s ·reputation continues to suffer from the negative media coverage of the ongoing enforcement-proceedings, the risk of adverse regulatory outcomes may increase.”
Safety: “The Utility’s ability to safely and reliably operate, maintain, construct. and decommission its facilities is subject to numerous risks, many of which are beyond the Utility’s control, including those that arise from the breakdown or failure of equipment, electric transmission or distribution lines, or natural gas transmission and distribution pipelines, that can cause explosions, fires, or other catastrophic events (such as the San Bruno accident).”
Reoccurring wildfires raged across northern California, driving PG&E into bankruptcy
“In early 2019, PG&E filed for Chapter 11 bankruptcy after fires caused by its powerlines burned hundreds of thousands of acres in Northern California and led to more than 1001 deaths. It paid out $25.5 billion to resolve its fire related liabilities, and expects to spend $11.7 million on strategies to mitigate wildfire risk between 2019 and 2022 …. And now, PG&E’s equipment is once again the focus of a Northern California wildfire that the utility thinks could cause it significant liability.” 2
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Highlighted Text Color Key:
- Extremely Concerning
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- Somewhat Concerning
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